The Justice Department has thrown a monkey wrench into the TV business by saying it would appeal the court decision permitting AT&T to acquire Time Warner.
In addition to creating questions about what will happen to Time Warner, the move made last Thursday (July 12) affects the tug of war over 21st Century Fox and other possible media industry transactions.
“While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances,” AT&T said. “We are ready to defend the Court’s decision at the D.C. Circuit Court of Appeals.”
The appeal will make it more difficult for AT&T to integrate the Time Warner businesses — now part of AT&T’s WarnerMedia unit — as the appeal drags on for what could be another year, especially if the case gets appealed again to the Supreme Court.
There were many questions about why the DOJ felt it could win an appeal. “Although this creates some uncertainty, we believe that the DOJ faces an uphill battle,” Jeffries analyst John Janedis said.
On the other hand, “we’re not as sure as everyone else that Judge [Richard] Leon’s ruling will be upheld on appeal,” said Craig Moffett, MoffettNathanson principal and senior analyst. He said “Fox’s board has been looking for a justifiable reason to choose Disney over Comcast” and predicted “tonight’s appeal from the DOJ would seem the final nail in the coffin for Comcast’s Fox chase.”
The bidding war already had some analysts concerned about the debt the winner will have to take on.