Pompeo writes: "AT&T and Time Warner may have thought things would be relatively quiet between the conclusion, nearly two weeks ago, of their dramatic month-long Department of Justice showdown in a federal courtroom in Washington, and Judge Richard Leon's anticipated June 12 ruling in what has been called 'the anti-trust case of the century.' Then along came Michael Avenatti."
AT&T C.E.O. Randall Stephenson. (photo: REX/Shutterstock)
13 May 18
AT&T C.E.O. Randall Stephenson issued a mea culpa for paying Cohen $600,000 to deal with Trump. Will CNN journalists be appeased?
T&T and Time Warner may have thought things would be relatively quiet between the conclusion, nearly two weeks ago, of their dramatic month-long Department of Justice showdown in a federal courtroom in Washington, and Judge Richard Leon’s anticipated June 12 ruling in what has been called “the anti-trust case of the century.” Then along came Michael Avenatti. On Tuesday, the now-famous Stormy Daniels attorney and indefatigable Donald Trump antagonist revealed documents showing AT&T was one of several companies with business before the Trump administration that had paid good dough last year to a shell-company-consulting-firm owned by embattled Trump fixer and Mueller-probe target Michael Cohen. It came to light that the contract, totaling $600,000 and ending in December 2017, specified that Cohen would provide advice on the $85 billion mega-merger—despite the painstakingly obvious reality that Cohen is not an expert in regulatory or anti-trust matters.
It was a very bad look for AT&T, and one with an inevitable whiff of pay-to-play given Trump’s stated opposition to the merger dating back to the campaign trail in 2016, not to mention his well-established war with Time Warner’s CNN, which AT&T will own if the deal—contested based on the argument that it would limit competition and harm consumers—goes through. The revelation also caught Time Warner by surprise. Sources within the Time Warner portfolio told me the company learned about it at the same moment the rest of the world did. “We had no idea,” said one.
On Friday morning, AT&T C.E.O. Randall Stephenson began the day with a breakfast of crow. “Our company has been in the headlines for all the wrong reasons these last few days and our reputation has been damaged. There is no other way to say it—AT&T hiring Michael Cohen as a political consultant was a big mistake,” Stephenson wrote in a companywide memo, which also noted that the AT&T executive who oversaw the Cohen arrangement would be retiring. “To be clear, everything we did was done according to the law and entirely legitimate. But the fact is, our past association with Cohen was a serious misjudgment.”
Time Warner sources told me employees there gave Stephenson credit for his unequivocal mea culpa. Still, for the denizens who toil at premium content and journalism outfits like HBO, Turner Broadcasting, and CNN, AT&T’s “serious misjudgment” with the Cohen matter is likely to inflame nerves about what life will be like under the auspices of a Dallas-based telecommunications titan. “This is only gonna raise people’s concerns about AT&T taking over,” said one executive within Time Warner. CNN employees in particular, this person added, “are legitimately worried about the influence AT&T will have on their coverage, and this is one additional piece of evidence that makes them question what AT&T ownership will mean.” (During a Senate appearance in December 2016, Stephenson said that editorial independence “is what makes CNN so popular and valuable, and we will not do anything to change that.”) CNN, as one journalist there pointed out, has been covering the trial and the Cohen affair aggressively, not pulling any punches, which suggests the network will be willing to hold AT&T accountable even if that’s who’s cutting their paychecks.
Judge Leon is considering the AT&T case purely on anti-trust grounds, having rejected AT&T’s request to obtain White House communications related to the Time Warner sale, which may have supported an argument that the D.O.J. encountered political pressure to stop the merger. Nevertheless, it’s reasonable to wonder whether the Cohen faux pas could make Leon less sympathetic to AT&T as he renders his verdict. AT&T and Time Warner declined to comment, but sources at the companies and within the legal community who are familiar with the case feel confident that Leon won’t be influenced by anything outside of what he heard in the courtroom, and that he will rule based on how the merger may or may not harm consumers by giving AT&T control of both a powerful television distributor (DirectTV) and a powerful television producer (Turner Broadcasting). “We’re all expecting him to stay inside that box,” one source said.
