Oct. 21 — AT&T Inc.'s anticipated $86 billion bid to acquire Time Warner Inc. could hit a regulatory snag over a small Atlanta television station that broadcasts re-runs and old movies.
The Federal Communications Commission, which may be wary of further consolidation in the media and telecom industries, is responsible for reviewing any deal that involves the transfer of broadcast, telecom or other licenses. Time Warner's Turner Broadcasting System Inc. subsidiary holds the broadcast license for Atlanta's WPCH-TV, which is unaffiliated with any major network.
Meredith Corp. runs the day-to-day operations of the station, known as Peachtree TV, through a local marketing agreement.
An FCC merger review is triggered only when parties file an application to transfer a license. As AT&T reportedly prepares its bid for Time Warner, it will have to decide if it wants to head off an FCC review by having Time Warner sell off the station.
Companies use sales, transfers and spinoffs around larger deals in order to face friendlier regulatory review “all the time,” Bloomberg Intelligence analyst Geetha Ranganathan said in an interview.
It's too soon to say whether the FCC would look favorably on the combination of one of the nation's largest content providers with one of its largest distribution companies. If AT&T and Time Warner structure the deal to leave out Peachtree TV, they would still face an antitrust merger review, likely by the U.S. Department of Justice. Multiple telecom industry analysts told Bloomberg BNA they would expect Time Warner to dispose of the station.
Time Warner could easily spin Peachtree out into a separate, wholly independent company, Roger Entner, an analyst at Recon Analytics LLC, told Bloomberg BNA. The company could also sell the station to a third party, even if it has to do so for pennies on the dollar, he said.
“Whatever that station is worth is immaterial in relation to the volume [of the deal],” said Entner. “Their toilet paper bill is probably more than what that station is worth.”
Representatives for Time Warner and TBS didn’t immediately respond to phone and e-mail requests for comment. An AT&T spokesman declined to comment.
If AT&T goes ahead with a deal that includes Peachtree TV, the FCC could start preparing for a review before a license transfer application is filed. Frequently, the commission may begin considering how to assign a possible review project and discuss what public interest issues might be implicated in a deal, Rosemary C. Harold, a partner with Wilkinson Barker Knauer LLP in Washington, told Bloomberg BNA. However, FCC staff wouldn’t spend significant amounts of time in advance of any deal until a license transfer request “shows up on the commission’s electronic doorstep,” Harold said.
—With assistance from Tim McElgunn
To contact the editor responsible for this story: Keith Perine at firstname.lastname@example.org
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)