There's business logic and then there's political logic. There are business realities and then there are political realities. Unfortunately for AT&T, Time Warner and their $85.4 billion merger agreement, business and political logic and realities are not remotely on the same page right now. And that spells doom for this deal. The only question is how much longer it will take before the business types figure it out.
Already, some of the expected and unexpected big political names have weighed in against the merger. Senator Bernie Sanders says the Obama administration "should kill" the deal, tweeting a statement that it will mean higher prices and fewer choices for consumers. He didn't bother to explain exactly how that will happen, but the week is young.
Joining Sanders in his clear opposition to the combination was none other than Republican presidential nominee Donald Trump. During a campaign speech on Saturday, Trump said that the merger is, "a deal we will not approve in my administration because it's too much concentration of power in the hands of too few." Perhaps just as importantly, Trump used the same speech to bash media mergers that have already been sealed for years.
Democratic nominee Hillary Clinton hasn't yet weighed in on the merger plan. Confident of a victory on Nov. 8, she and her campaign are starting to play it super safe. But Clinton running mate Tim Kaine did say he has "concerns and questions" about the deal, but would not say much more than that.
You don't need all this weekend's sound bites to know the political sentiment over big merger deals in Washington right now is extremely negative, perhaps more negative than it's been since the days of President Teddy Roosevelt's "trust busting" era. Sanders and Senator Elizabeth Warren have won the hearts and minds of the Democratic side of the country and Congress.
Trump and his devoted supporters are clearly no fans of big business. And the more established Democrats and Republicans like Clinton and House Speaker Paul Ryan are certainly not rushing to defend them. In Ryan's case that's especially notable, because AT&T CEO Randall Stephenson has been a strong supporter of established Republicans and has made numerous donations to the GOP including a $30,000 gift to the RNC last year and a $1,000 donation to Ryan himself just seven months ago. And the Wall Street Journal reports that AT&T's PAC has given $70,000 to Ryan's joint fundraising committee as part of more than $4 million in overall donations to hundreds of different establishment candidates from both parties so far this year.
But the funny thing about money is that politicians can always find a new place to get it. And even if they can't right away, they're much more attracted to political capital than actual capital while they're still in office. That's why all of Pfizer's supposed political connections, including having a chief lobbyist with very close ties to the Obama administration, didn't save its merger deal with Allergan this year.
The continuing negative feelings against big business that peaked during the economic downturn of 2008-09 are still out there. And the people leading the charge against Wall Street/Corporate America, like Sanders and Senator Elizabeth Warren, are stronger than ever politically as a result of this unusual business cycle.
That begs the question of whether AT&T and Time Warner were in their right minds to announce this deal barely two weeks before Election Day. The political climate is hard enough for big mergers now, why make it worse by announcing a deal at a time when a candidate like Trump would have little to lose by publicly denouncing it? And now that Trump's made that statement, even the uber-cautious Clinton may now feel pressure to do the same.
The only conclusion that makes sense in this case is that America's corporate leaders are just too tone deaf to get it. Why? Perhaps it's because the donation windows in the Clinton campaign are still being jammed with their money. Perhaps it's because congressional Republicans still have their hands out as well. Perhaps it's because there's simply no blueprint for operating in a climate when Washington is this politically opposed to big business. But whatever the reason, America's CEOs need to wake up to new realities.
As those realities stand now, there's little chance the AT&T/Time Warner deal will survive as is. It's more likely that several political entities from the Federal Communications Commission to the Federal Trade Commission will gut a good deal of it at best and kill it completely at worst.
Maybe then corporate leaders will realize they need to find a way to improve their image with the public more than they need to keep pushing big money into Washington.