Time Warner C.E.O. Testifies That AT&T Merger Is Needed to Battle Silicon Valley

Mr. Bewkes testimony came as the trial that will decide the fate of AT&T’s bid for the company enters its fifth week. The trial is being closely watched for the implications it could have on the course of antitrust policy and for how it could shape the landscape of entertainment as legacy media and telecom companies scramble to bulk up against new competition from Silicon Valley.

AT&T’s chief executive, Randall Stephenson, is expected to testify as soon as Thursday. John Stankey, the AT&T executive who is poised to run Time Warner after the merger, also began testimony on Wednesday afternoon. Arguments are expected to close as early as April 30. Judge Richard J. Leon of the United States District Court for the District of Columbia, who is presiding over the case, is expected to take about a month before giving his opinion.

For Mr. Bewkes, 65, the courtroom appearance was a rare public pleading to salvage a career-defining deal. The media titan is a 39-year veteran of Time Warner and has been chief executive since 2008, overseeing the spinoff of Time Warner Cable a year later, the rise of HBO and the turbulent evolution of CNN and the Warner Bros. movie studio.

Confident and congenial, Mr. Bewkes engaged directly with Judge Leon, leaning forward in his chair and making eye contact as he explained how the media industry is being challenged by Apple, Amazon, Facebook, Google and Netflix. He described the Justice Department’s theory that the merged company would threaten to withhold Time Warner content from rival cable operators as “ridiculous.”


AT&T and Time Warner have argued that it is extremely unusual for the federal government to try to block what is known as a vertical merger, a union of companies that don’t compete directly.

Brandon Thibodeaux for The New York Times

Among the biggest problems for Time Warner as a stand-alone television and movie producer is that it does not have access to viewer data to target advertising and other valuable customer information the same way that Amazon and Netflix do, Mr. Bewkes said.

“We don’t have emails, contact information, billing information … any of these things,” he said.

At the center of the antitrust trial are arguments over consumer and competitive harms, with attention focused on economic analyses presented by both sides last week. The Justice Department and several consumer groups said the deal would hurt consumers, who would have to pay bigger bills as a result of higher prices for Time Warner programs.

The companies have argued that the Justice Department’s lawsuit is at least a decade behind the times. Time Warner said companies like Google and Facebook have the most valuable data on users but they are not willing to share that information.

Mr. Bewkes said he has also unsuccessfully tried to buy data on viewers from distributors like Comcast, which was only willing to sell limited sets.

These trends prompted Mr. Stephenson and Mr. Bewkes in the summer of 2016 to meet to discuss business options, Mr. Bewkes said on Wednesday. In late August 2016, over a 3-hour lunch on the 10th-floor dining room of the Time Warner building in New York, they agreed a merger made the most sense. The companies’ boards approved the plan soon after.

The companies announced their deal in October 2016. AT&T and Time Warner said they were surprised that the Justice Department blocked the merger, saying it is highly unusual for the federal government to block a so-called vertical merger of companies that don’t directly compete.

Judge Leon, who has not commented much throughout the trial, has said the action was a “rare breed of horse” but not a “unicorn.”

Mr. Bewkes and Mr. Stephenson have previously suggested that the Justice Department was influenced to block the deal by presidential politics. President Trump said during his election campaign that the deal should be denied. Mr. Trump has also repeatedly bashed CNN for its coverage of his administration.

The Justice Department has denied any political interference in its suit to block the deal.

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