AT&T: Merger Review Halt Won't Hurt Us
Despite the FCC's pause of its review of AT&T's proposed purchase of DirecTV, AT&T officials are not panicking, at least not yet.
The FCC stopped its informal "shot clock" for reviewing the $48.5 billion deal Wednesday, along with its similar review of Comcast Corp. (Nasdaq: CMCSA, CMCSK)'s proposed $45 billion buyout of Time Warner Cable Inc. (NYSE: TWC). The Commission cited strong concerns that media companies have expressed about permitting even limited public access to their closely held programming contracts with the four pay-TV providers.
Speaking on his company's third-quarter earnings call with analysts late yesterday, AT&T Inc. (NYSE: T) CFO John Stephens said AT&T remains confident that the Commission will approve its purchase of DirecTV Group Inc. (NYSE: DTV) sometime before next July, enabling them to close the deal shortly thereafter. "It doesn't change our view that we'll be able to get the deal approved and closed in the first half of 2015," he said in response to an analyst question. "We're still optimistic about the transaction."
Stephens emphasized that the FCC's move came in reaction to content providers' concerns about the confidential nature of their programming deals with the pay-TV providers, not anything concerning the details of the merger itself. The stop-clock halt "has nothing to do with the benefits or merits of the deal or any information that we provided," he said.
In addition, Stephens stressed that AT&T, unlike its content partners, has no problem sharing the programming-contract information with the Commission. "We're ready to provide what they requested from us today," he said. "We're confident in the FCC's rigorous procedures for keeping the information confidential."
Comcast executives expressed similar sentiments in an official statement late yesterday and in comments on their third-quarter earnings call Thursday morning. "We continue to believe the review will get completed as we said and will get closed in early 2015," said Comcast Chairman & CEO Brian Roberts, shrugging off any concerns about a delay.
On the AT&T call, Stephens also underscored that such clock stoppages are "not uncommon or rare" occurrences" in FCC merger reviews of this size. The Commission halted the review of the AT&T-DirecTV merger on Day 76 of the 170-day period, leaving 104 days to go. The Comcast-TWC merger review, which started a bit earlier, was stopped on Day 85 of the shot clock, leaving 95 days to go.
— Alan Breznick, Cable/Video Practice Leader, Light Reading