President Donald Trump doesn't have a lot of friends in Silicon Valley. However, as his administration delays approving the AT&T-Time Warner merger, he is unintentionally making life much easier for the biggest technology companies.
The Justice Department's decision to sue to block the $85 billion acquisition of Time Warner by AT&T has clogged up the future of the legacy media business as executives wait to see what's possible — and what isn't — in a Trump administration. Meanwhile, tech companies like Amazon, Apple, Netflix, Alphabet's YouTube, and Facebook are free to spend billions on original content, buoyed by the rising growth that traditional media companies lack.
"For the first time, I don't understand what's possible regulatorily when it comes to horizontal integration or to vertical integration, and even whether or not behavioral remedies will be meaningful again," said Leo Hindery, managing partner of InterMedia Partners and the former CEO of both TCI and AT&T Broadband, once the largest U.S. cable company. "There are now inconsistent strategies from company to company and people are stepping every day into each other's sandboxes."
The threat of tech giants moving in on traditional media businesses is one of the reasons Rupert Murdoch decided to sell $52.4 billion worth of 21st Century Fox assets to Disney in December, according to people familiar with the matter. That sale included Fox's movie studio, some cable channels and stakes in Sky, Endemol Shine Group and Hulu, as well as regional sports networks.