AT&T's proposed Time Warner merger.

AT&T’s acquisition of Time Warner has seen yet another twist. Last month, after a long court battle stemming from the Department of Justice’s lawsuit to block the deal on antitrust grounds after AT&T declined to sell either Turner Broadcasting or DirecTV, U.S. district court judge Richard Leon approved the deal without conditions. That seemingly paved the way for this move to go through, but the DOJ has now appealed, as Hadas Gold writes at CNN:

Judge Richard Leon, who presided over the lawsuit the DOJ had brought to block the deal, ruled last month that the government had failed to show that the deal violates antitrust law, and in his opinion ripped apart its case. AT&T has since closed the acquisition of Time Warner, including CNN.

AT&T has since re-named the division WarnerMedia, created as a separate unit from the rest of the company, in part in case of an appeal.

…Using unusually strong language, Leon discouraged the Justice Department from asking him to put the ruling on hold while it considers an appeal. He said such a stay would be “manifestly unjust” because it would have the effect of killing the acquisition. The Justice Department did not seek a stay, and the deal closed.

Leon, though, also warned against an appeal, writing in his decision “[A]s my 170-plus page opinion makes clear — I do not believe that the Government has a likelihood of success on the merits of an appeal.”

Now the case will go to the D.C. Circuit Court of Appeals, where a three-judge panel will hear the appeal. It’s possible the court could place the case on a fast track because the longer an appeals process takes, the more integrated the two companies will become. AT&T completed its acquisition of Time Warner on June 14 and formed WarnerMedia a day later.

AT&T has released a statement on this:

This could wind up being significant on several fronts. As discussed when the deal was initially approved last month, that decision provided even more corporate backing (and corporate integration) for Turner Sports (including Bleacher Report and B/R Live) and HBO’s sports arm, paving the way for them to pursue even more sports rights and possibly offering discounts on their content to AT&T/DirecTV customers. It also reduced regulatory hurdles to the Disney-Fox deal (which the DOJ had approved in exchange for the sale of the regional sports networks), and convinced Comcast to again try and outbid Disney for those Fox assets. This appeal alone, regardless of any success it finds, might make Fox shareholders even more nervous about the Comcast bid (which carries more antitrust concerns, even with Comcast’s vow that they would also sell the RSNs), and might boost their incentive to stick with the already-approved Disney bid.

At any rate, it will be interesting to see where this goes. As Gold noted, Judge Leon’s ruling was surprisingly strong, approving the merger without conditions and suggesting that there wouldn’t be much in the way of grounds for appeal. If the appeals court doesn’t overturn his ruling, then the merger should proceed as planned, and there may not be major consequences elsewhere. But if the appeals court (or theoretically even the Supreme Court, as this could be appealed further if they opt to hear it) does strike down this merger, that’s going to have a significant impact not just on AT&T and Turner, but on the entire sports media landscape.

[CNN]

About Andrew Bucholtz

Andrew Bucholtz is a staff writer for Awful Announcing.