How Did AT&T’s $100 Billion Time Warner Deal Go So Wrong?

A year later, in the summer of 2016, Mr. Ginsberg, Time Warner’s head of communications, had breakfast with Peter Chernin, his former boss at News Corp. and a trusted adviser to Mr. Stephenson, at a cafe in Menemsha on Martha’s Vineyard. Mr. Chernin asked Mr. Ginsberg what he thought Time Warner’s price might be. “We’d need $105 to $115 a share,” Mr. Ginsberg suggested, pretty much off the top of his head. Mr. Chernin didn’t blanch.

As soon as breakfast was over, Mr. Ginsberg called Mr. Bewkes. “Are you sitting down?” he asked. “Because I’ve got some incredible news that will stun you.”

The two companies announced their deal on Oct. 22, 2016. Neither AT&T nor Time Warner management was worried about antitrust or other regulatory issues since vertical combinations — mergers of buyers and suppliers, rather than competitors — were almost never challenged on antitrust grounds. No such case had been litigated in 40 years.

They had failed to reckon with the populist skepticism about big mergers or Donald J. Trump’s hostility to established media, especially CNN, which he repeatedly denounced as “fake news.” Mr. Trump’s ire was especially intense toward CNN’s chief executive, Jeff Zucker, ignoring (or forgetting) that it was Mr. Zucker, as head of NBC Entertainment, who put “The Apprentice” into NBC’s prime-time lineup and made Mr. Trump a TV star.

The proposed megadeal was one of the few issues — perhaps the only issue — to instantly unite the political right and left, with Mr. Trump, the Republican nominee for president, and the liberal senators Bernie Sanders and Elizabeth Warren unlikely allies in opposing it.

With the unexpected election of Mr. Trump in November, AT&T realized it had a problem. In January 2017, the company hired the president-elect’s personal lawyer, Michael Cohen, paying him $50,000 a month to advise it on, among other topics, the Time Warner merger, even though Mr. Cohen had no known antitrust expertise.

The move appeared to yield immediate results. (Mr. Cohen did not respond to a request for comment.)

Just days after Mr. Cohen was hired, Mr. Stephenson invited Mr. Bewkes to join him for a Trump Tower meeting with Mr. Trump, along with Mr. Trump’s son-in-law, Jared Kushner, and adviser Stephen K. Bannon. Mr. Bewkes declined.


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