Judge Allows AT&T’s $85 Billion Time Warner Purchase

and on Bloomberg dot com slash Podcasts. Now, turning to the A T and T Time Warner deal, Federal Judge Richard Leon rejected the Justice Department's bid to block that proposed billion dollar acquisition of Time Warner, a decision that could lead to much more consolidation in the media sector. Just after the decision was announced, A T and T

s lead lawyer Daniel Petrocelli addressed the media. I've been asked by many people, what is the significance of this transaction on many other deals that are appending in the marketplace. You know, my answer to that is that each and every one of these transactions stands on its own, as this one did. Joining us is Marianne Halford, global Media and Entertainment strategist at O C and C Strategy Consulting. Marianne, do you agree with Petrocelli or will consolidation accelerate and

big media grow bigger? Well? I agree on both fronts. Um. I think each deal will be looked at on its own. But I think this has been an awesome month. It is an awesome month now for anybody who is a telco communications operator because the world is now open for vertical integration in in a way that I think is fairly significant. UM. Needless to say, we know Comcast will be issuing its formal bid either today or tomorrow. Many say today. Um, but you know what what does Charter

wind up doing? Do they start to enter into the fray? What will other companies start doing in this space? And also they have another wind behind their backs right now, and another reason to want to buy up some of these valuable mediasets is the fact that net neutrality is is fading away. At the same time, the media companies all know that they need to go direct to consumer. Um. They do not want to be running into the arms of Google and Facebook and Amazon. They want to figure

out how they can get direct access to consumers. And given that they have been working with a number of these larger operators for years and years, I think they may feel a little bit more comfortable embracing their arms than uh, those of the fangs if you will, um out in California. Um, so yes, I think there'll be a lot more activity coming coming on board here and it will be an exciting space to watch over the coming months. Marianne, what do you think are the chances

that the Justice Department will appeal this ruling? You know, of course we're not talking about our normal presidency, so we're not necessarily always talking about a normal Justice Department either. Um. I think it's been actually quite interesting that it's been somewhat silent and quiet. Um in some respects. I don't know if this is a fight that they want to

pursue right now. Um, there's a lot of other things happening. Um. The judge really didn't give them a lot of leeway for appealing, because really the judge basically didn't listen, don't don't don't bother that requesting a stay. He says, I'm not going to grant one. But it's based on whether he did, whether there are any errors during the trial. It's not based on what the judge says, which was

don't appeal. That's true, that's true, but you know, let's see, I'm not sure I really can't make a judgment there so UM, let's taking let's say that they don't appeal. What will this decision do you think have any effect on whether the government opposes future media deals? Well, I

think this one was a unique situation. UM. You know, listen, Jeff Zucker is the guy that actually allowed Donald Trump to run for president because he's the guy that green let the Apprentice, and then Trump's expected Zucker to be very kind to him on CNN, and he was trying to be, if you will, UH, a proper journalistic institution. So it was a very interesting and unique situation. Um. You know, clearly, when UH Disney announced its intense to

buy Fox, Trump applauded that deal. Though that's a horizontal merger and not a vertical merger. UM, I don't know. I think I go back to petor Chilly here is that each decision is going to have to be evaluated on its own, and UH, given the President of the United States who he is and his varying opinions on different things, that it will depend upon each situation. All that's being said, though, I still think there's going to be a lot more consolidation going on. Um, it's clear

that does that mean higher prices? Will that mean higher prices for consumers? Got to get that question. I think ultimately you can wind up see I mean, first of all, you got have the the uh, the combining of net neutrality and this decision coming together all at the same time.

I think could wind up leading to higher prices. And also the media companies are going to be more and more resistant, if you know, if they wind up continuing to get bought up by these larger companies, they're going to become more and more resistant to providing content to the uh, the amazons and to the net is as well. In fact, with Netflix they're all uh holding back a lot of their content now, um, and that will continue. So yes, I do think you could see higher prices

for consumers, um, not right away, but over time. Yes, all right, thanks so much, Marianne. That's Marianne Halford. She is with O C and C Strategy Consulting. A reminder, you can listen to all of today's interviews, as well as past episodes of the show anytime on Bloomberg dot

com slash podcast. That's Bloomberg dot com slash podcast. Omb director and acting cfp B chief Mick mulvaney told reporters yesterday the Trump administration will adhere to a June twenty second deadline to pick a permanent director for the Consumer Protection Agency. Speaking with Bloomberg earlier this year, mulvaney said that the head of the CFPB, no matter who it is, has too much power. My objections to the bureau remain the same, which is the structure is completely Um, it's irrational.

I have way too much authority as an individual. Jesse Westbrook's Bloomberg News Financial regulation editor. He joins us now by phone for more on this story, and Jesse, some interesting names getting kicked around here on who might replace mcmilvany and become the permanent CFPB director. Who are they? Yeah, I mean some of the people are being interviewed are darryl Issa, a Republican congressman from Orange County. UM. Obviously his political career in Congress is is sort of nearing

an end, so maybe he's looking for work. We Uh, we have others such as, uh, the guy who runs the credit union regulator. UM. I mean, I think you consistently expect that all of these people will continue the work that mcmilvany is doing. Of sort of defanging this watchdog and irritating Democrats on Capitol Hill. Do you see any pattern in the people's names that have been mentioned so far. I don't know that there's a pattern. I mean,

they're there. They are all conservative Republicans, people who have a different attitude to regulation than than what we saw under the Obama administration. Um. I mean, it's it's a routine thing that once people come to the swamp and they have political careers, and those political careers start start running dry, they start looking for jobs elsewhere. I mean, you know, it's it's interesting, particularly on the Republicans side. You know a lot of the people who criticize all

these agencies, but then they often end up working at them. Well, we know that that mcmulvaney has been highly critical of the agency. He's been trying to roll back at least some of its enforcement and actions. But for any real change around the authority of the CFP director director or the structure of the CFPB, that would be up to Congress. Yeah, that's right, I mean, and and that requires sixty votes.

And and that's why in the Big Dot Frank rollback bill, we just saw that the past Congress nothing touching the CFPP was in there because there are not sixty votes to to rip up and and and overhaul the CFPB. But if if you have someone who doesn't believe in the mission of the agency running the place, you know they can not sue companies. They can take sort of a lass affair attitude to enforcing rules. Um, they can

reassign staffers to unimportant jobs. I mean, there's a lot you can do if you do not believe in the mission of an agency. So Jesse obviously Nick mulvanny didn't have to go through a Senate confirmation hearing. But for someone else who wants to take this job, who is nominated to take this job, who doesn't like the agency basically or doesn't support the agency's mission, will they have

a hard time getting Senate confirmation. I I don't think so, because remember, you don't need sixty votes to get confirmed in the Senate um. All you need is a is a simple majority. That's unlike legislation. I have a hard time believing that in most cases Republicans in the Senate are are not going to approve Trump's nominees um, particularly for this agency that is not liked by the financial services industry, which donates a lot of money to Republican lawmakers.

So I understand that the CFP director director, no matter who it is, has some flexibility in bringing enforcement cases. But there are certain enforcement cases that might be particularly egregious. Uh you know, I'm thinking here about all the problems Wells Fargo. I mean, so, so there are there are minimum things that the agency would do. Is that fair to say? Oh? Yeah, I mean a percent? And and the fine imposed on Wells Fargo under McK mulvaney was

the agency's biggest fine ever billion dollars. Wasn't well it was. It was a billion dollars shared with the Office of the Controller of the Currency. But but whether it was shared or not, it was still the biggest fine the agency has ever done. What was interesting about that is you probably remember Trump's tweet that they were gonna, you know, come down hard on Wells Fargo. So was that a one off or was mulvaney pleasing his boss? I guess that's a question for mc mulvaney. Yes, we will find

out about that one off. It seems like it is. But let's change topics here a little bit. Six Senate Democrats are asking the SEC's internal watchdog to investigate a Republican commissioner who berated City Group over its stance on companies that sell guns. Tell us more about that. Yeah,

so this is an interesting story. A few weeks ago, a bunch of executives from City Group were we're inside the SEC ostensibly to talk about derivatives regulation and esoteric topic to the rest of us, but something that is very important to banks because they are heavily engaged in

the derivatives markets. And and as the meeting was sort of running to an end, this Republican Commissioner, Michael pawar Uh started blasting City Group over their decision to stop financing UM companies that were doing business with gun gun dealers, and Uh and City Group executives were sort of taken aback. They they didn't think that they would go into the SEC and and get a tongue lashing about their gun policy.

But that's indeed what happened. And now a Democratic lawmaker, Chris van Holland and in a handful of his Democratic colleagues, want the SEC Inspector General to investigate this and and make a conclusion about whether this was proper conduct by an SEC Commissioner Jesse Westbrook, Bloomberg News Financial Regulation Editor, thank you for all of that. Thanks for listening to the Bloomberg Law Podcast. You can subscribe and listen to the show on Apple Podcasts, SoundCloud, and on bloomberg dot

com slash podcast. I'm June Grasso. This is Bloomberg