TV channel Starz criticizes AT&T plan to buy Time Warner
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[August 03, 2017]
By Diane Bartz
WASHINGTON (Reuters) - The
premium movie channel Starz criticized AT&T's plan
to buy Time Warner Inc on Wednesday, saying the megadeal
would give AT&T the clout to steer customers away from
Starz and toward its own premium channels.
The $85 billion deal, which was announced in
October, would give AT&T control of such Time Warner properties
as HBO and CNN, the film studio Warner Bros and other coveted
In a study done for Starz, a unit of Lions Gate Entertainment
Corp <LGFa.N>, economist Jeffrey Eisenach argued that AT&T, if
it wins antitrust approval to buy Time Warner, would have the
incentive to push customers to HBO rather than Starz and other
independent channels. Starz airs shows like "American Gods" and
Eisenach said AT&T could do so by removing marketing support for
Starz, making it harder for customers to sign up or by dropping
the channel altogether.
The study did not take a position on whether the Justice
Department should stop the deal or impose conditions.
AT&T took issue with the study's conclusions that it could steer
consumers away from Starz.
"This conclusion doesn't square with the facts. We fully expect
the DOJ (Justice Department) to base its analysis on the facts
and the law, as it always does, and not the work of HBO's
competitors," an AT&T spokesman said in an email statement.
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The deal was criticized last year by then-presidential candidate
Donald Trump, who accused media companies of being unfair in
covering his campaign and said his Justice Department would block
it. Eisenach was a member of Trump's transition team.
Democrats have also taken issue with the proposed merger, saying it
could harm consumers and content providers.
"We hope regulators carefully scrutinize the major consequences of
the proposed deal and act as necessary to maintain the robust
competition among premium networks that exists today," Starz said in
AT&T is the largest U.S. multichannel video programming distributor,
or MVPD, a term that describes pay TV that is either satellite,
cable or wireline. AT&T has 25.8 percent of U.S. MVPD customers,
while Comcast is second at 23.2 percent and Spectrum is third at
17.7 percent, the study said.
(Reporting by Diane Bartz; Editing by Peter Cooney)
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