DealBook Briefing: The Fallout from the AT&T-Time Warner Lawsuit

Good Tuesday morning. Topic A in the business community is the Justice Department’s lawsuit to block AT&T’s $85.4 billion bid for Time Warner. But also expect people to be buzzing about the WSJ’s report this morning that the Justice Department is conducting an investigation into Harvard’s affirmative-action policies.

Andrew worked the phones yesterday and hears:

A Justice Department official told reporters yesterday that the regulator isn’t reflexively against “vertical” mergers, despite the department’s legal complaint arguing that this particular one would concentrate too much power in one company.

There’s a question of whether the Justice Department’s lawsuit would chill a busy period for mergers. Yet if the government wins, some deal making will continue — including some involving Time Warner. The WSJ points out that the forces that compelled Time Warner to sell itself aren’t going away.

As Michael Nathanson of the research firm Moffett Nathanson told the WSJ: “I don’t think things will stay quiet.”

Extra credit: See how frequently AT&T has factored into the history of American antitrust law.


Today’s DealBook briefing was written by Andrew Ross Sorkin and Michael J. de la Merced in New York and Amie Tsang in London.


• Jennifer Saba and Gina Chon write of AT&T’s chief, Randall Stephenson, “Anything less than all-out victory this time would be fatal.” (Breakingviews)

• Ken Brown writes, “The flaw in Wall Street’s thinking was that precedent would hold in an administration that doesn’t highly value precedent.” (WSJ)

• Tara Lachapelle writes, “Both Time Warner and AT&T have plunged as the U.S. Justice Department tries to stop their merger, but AT&T needs the deal far more because it’s the linchpin of its video strategy.” (Gadfly)

The telecommunications giant and its peers have lobbied hard against the Obama administration’s efforts to prevent broadband providers from charging higher fees to access particular websites or online services like Netflix. Now the F.C.C. under Chairman Ajit Pai is poised to roll those initiatives back.

More from Cecilia Kang of the NYT:

Extra credit: Politico notes that Mr. Pai promised to take a “weed whacker” to regulations. So far he has moved to relax restrictions on ownership of local TV stations and lower the standard by which internet service can be called “broadband.”

• Charlie Rose has been suspended by CBS after several women said he made crude sexual advances toward them. PBS and Bloomberg TV said they would suspend the distribution or airing of “Charlie Rose.” Mr. Rose said he did not believe all the allegations were accurate, but apologized. (NYT, WaPo)

• A second woman has accused Al Franken of touching her inappropriately. Separately, a rape victim with whom he was working on legislation has asked that he stop sponsoring the bill. (CNN, The Hill)

• A former employee of Representative John Conyers of Michigan said she was harassed by the lawmaker, and that she had settled the case. (BuzzFeed)

• The New York Times suspended the reporter Glenn Thrush after he was accused of inappropriate sexual behavior. (NYT)

• 21st Century Fox said it would create an oversight panel to provide written reports on workplace culture, as part of a legal settlement in the wake of sexual harassment scandals at Fox News. (NYT)

Keep track of the scandals here.

And that silence has been deafening, particularly from C.E.O.s like Jamie Dimon who formed a “Fix the Debt” campaign on the issue. (Remember that the Tax Policy Center now estimates that the House’s tax overhaul proposal would add $1.3 trillion to the national debt over the next 10 years.)

Here’s how Steven Rattner, the financier who oversees Michael Bloomberg’s wealth and was on the steering committee of Fix the Debt, explained the apparent conundrum in Andrew’s latest column:

But Pete Peterson, the Blackstone co-founder and perhaps the most outspoken billionaire on the issue of the federal deficit, is having none of it. He told Andrew:

Extra credit: The NYT explains the delicate balancing act that the Senate majority leader, Mitch McConnell, must perform to woo Republican colleagues wary of the Senate’s tax bill.

Goldman Sachs employees in Europe may have to brush up on their French and German, as the firm prepares to open two new European hubs post-Brexit: Paris and Frankfurt. Employees would choose where they wanted to live, though Lloyd Blankfein has a sense of where the Americans will gravitate.

“I can imagine that many Americans would prefer to live in Paris than in Frankfurt for many reasons,” he told the French newspaper Le Figaro.

Other banks have already picked Frankfurt as their new hubs, including Citigroup, Morgan Stanley and Nomura. Many firms are expected to start moving staff out of London starting early next year, according to Bloomberg.

The European Union has already decided to move top regulatory agencies outside of London: The European Medicines Agency will leave London for Amsterdam, while the European Banking Authority will relocate to Paris.

The loser in all this is London: “There is no upside for the City of London” from Brexit, Nicolas Véron, a senior fellow at the Belgian think tank Bruegel, told the NYT. “It will lose business, not gain.”

That’s per a tweet by Dan Primack at Axios. It’s not necessarily a huge accomplishment: The Fed will be down to three governors once Janet Yellen steps down in January. The two former Carlyle partners are Jerome Powell and Randal Quarles.

A tribute to Ms. Yellen: Andrew Levin, a Dartmouth economist who worked as an adviser for her, praised her ability to lead a large group of independently minded voices. “Sometimes they call it a cacophony,” he told the NYT. “She managed to turn it into a symphony.”

Its deal to buy as many as 24,000 self-driving Volvo vehicles reflects the ride-hailing giant’s broad ambitions to make autonomous driving part of its future.

Here’s what Jeff Miller, Uber’s head of automotive alliances, told Mike Isaac of the NYT:

But Shira Ovide of Bloomberg Gadfly says that the deal shows Uber doesn’t know what its own future looks like: “Far from being ‘asset light,’ Uber’s purchase suggests the company in a few years may own a rapidly depreciating fleet of cars.”

• Ropes and Gray said that its partners have elected Julie Jones as its next chairwoman, the first time the law firm has been led by a woman. (Ropes & Gray)

• Recent deals show that the fear of Amazon and companies like Netflix, Google and Facebook has spread through multiple sectors, including the media and health care industries. (WSJ)

• Nestlé is one of the companies exploring a purchase of Hain Celestial Group, an American producer of organic and vegetarian food, according to people familiar with the matter. (Bloomberg)

• Starboard Value took a 10.7 percent stake in the Israeli networking company Mellanox Technologies and urged it to improve its margins, bolster its stock and explore a potential sale, according to people familiar with the matter. (WSJ)

• Marvell agreed to take over another chip maker, Cavium, in a $6 billion deal, continuing a wave of consolidation in the semiconductor industry. (NYT)

• Jana Partners disclosed a stake of about 8.74 percent in Bloomin’ Brands, which owns Outback Steakhouse. It plans to push for change, perhaps including a sale. (WSJ)

• Harvard University’s $ 37.1 billion endowment is in talks to have Bain Capital manage a portion of its real estate investments, according to people familiar with the matter. (Bloomberg)

• WPP agreed to a $1.35 billion tender offer from Bain Capital for Asatsu-DK of Japan, of which WPP owns 25 percent, according to a draft statement from Bain. (Reuters)

• The former labor secretary Robert Reich is the star of a new documentary film on Netflix, “Saving Capitalism,” which follows him around a tour of the United States, talking to rural voters, politicians and small business owners. (NYT)

• Venture capitalists are betting on the Midwest. They see as an undervalued area with budding entrepreneurs that could be an antidote to the scalding-hot tech market on the West Coast. (NYT)

• Amazon’s cloud storage unit has a new service called the Amazon Web Services Secret Region to handle classified information for United States spy agencies. (WaPo)

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