DealBook Briefing: Waiting for a Fight Over Time Warner Deal

Good Wednesday morning. We’re waiting to see when — or if — the Justice Department moves to block AT&T’s bid for Time Warner. And we’re watching the latest twists in the Senate’s tax overhaul efforts. A note to readers: We’re aware of an issue where the email is getting clipped in Gmail and other mail clients. We’re working to fix this problem as soon as we can, and thank you for your patience. — The DealBook team

Today could be the day that the Justice Department finally sues to block AT&T’s $85.4 billion takeover bid for the media giant, according to Rich Greenfield of BTIG. Or maybe not: DealBook’s Michael J. de la Merced has heard that’s a possibility — but also that settlement talks have been continuing.

In his blog post, Mr. Greenfield lays out what we’ve heard is a longstanding concern among regulators about the last big “vertical merger” of broadband and media companies, Comcast’s takeover of NBCUniversal. To win approval, Comcast agreed to several rules about how it would provide NBCUniversal content to rivals, in a consent decree meant to prevent anticompetitive behavior.

Mr. Greenfield writes:

Attorney General Jeff Sessions didn’t address questions at a House Judiciary Committee hearing yesterday about possible political interference in the Time Warner deal, saying only that his team always strove to act professionally. But Brian Stelter of CNN pointed out an interesting question that Mr. Sessions declined to answer.

Critics’ corner

• Michael Wolff asserts of the deal, “Even when directly told that the White House didn’t like it, and that senior Trump officials were saying it was going down, AT&T put its fingers in its collective ears.” (Hollywood Reporter)

• Matt Stoller of the Open Markets Institute writes, “Both Democrats and Republicans have to be careful not to open the door to an equally dangerous prospect — of dangerous monopolists wielding flimsy or even untrue political threats to justify their concentrations of power.” (WaPo)


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


Multiple factors have shifted after the Senate included a repeal of the individual insurance mandate in the latest version of its tax bill. (Doing so helps the Senate stay below its $1.5 trillion budget deficit limit.)

• Can the Senate majority leader, Mitch McConnell, get 50 votes now? Susan Collins, who was already urging changes to the plan, was a critical vote in defeating the last several attempts to replace the Affordable Care Act. But including the mandate could sway more conservative senators toward the “aye” column.

• Will lawmakers be happy with a proposal to make all of the tax cuts, except for the corporate one, expire in 2025, creating a fiscal cliff where many voters’ tax bills would jump in 2026?

The House is scheduled to vote on its tax bill on Thursday, and it’s expected to pass. The Senate is expected to vote after Thanksgiving. If its bill passes, there’s then the arduous work of reconciling the two. (As we noted yesterday, the economist Alec Phillips of Goldman Sachs believed that the chances of a tax package being signed were looking better — but that was before the latest version of the Senate bill came out.)

Cui bono?

• At a WSJ C.E.O. Council event where Gary Cohn was being interviewed by the newspaper’s editor in chief, Gerard Baker, only a few audience members’ hands went up when asked if they plan to increase their companies’ capital investments. Mr. Cohn asked: “Why aren’t the other hands up?” (@nataliewsj)

• In a national survey of 9,504 adults conducted for the NYT by SurveyMonkey, 78 percent of respondents said they did not believe that a tax cut for their employer would mean a raise for them. (NYT)

• Other beneficiaries of the tax plans as currently written: commercial real estate firms and companies that hold patents and other intellectual property offshore. (WSJ, Bloomberg)

How much worse can things get? Shares in the embattled conglomerate have fallen more than 12 percent in the days since the company’s C.E.O., John Flannery, unveiled his transformation plan. That was enough of a plunge to leave Boeing as the biggest American industrial company by market value.

But the bigger crisis is existential, according to John Gapper of the FT:

Analysts have either lowered their price targets or are considering it, CNBC reports.

Extra credit: Remember when Trian Partners asserted that G.E. could be valued at about $40 to $45 a share by the end of this year? The fund hopes you don’t.

Both the WSJ and CNBC now report, citing unidentified sources, that the former Pimco chief executive is a candidate to become the Federal Reserve’s vice chairman. Suffice to say, he would be an unusual pick for the Trump administration.

Mr. El-Erian has the qualifications. But he’s also what some of President Trump’s backers would consider a “globalist”: He had an international upbringing as the son of an Egyptian diplomat, and his economic views generally mesh well with those of the departing Fed chairwoman, Janet Yellen.

Then again, Jerome Powell, the White House’s nominee for Fed chairman, doesn’t represent a sharp break from Ms. Yellen’s policies, either.

The next big, messy default of a country may be near after credit ratings agencies said that the Maduro government had failed to meet some obligations. That has drawn in hedge funds which specialize in distressed sovereign bonds, while more traditional investors — who held billions of dollars’ worth — are fretting or fleeing.

The world news flyaround

• Zimbabwe’s military said that it had custody of President Robert Mugabe, but denied that it had begun a coup. (NYT)

• As many as 17 people detained in Saudi Arabia’s anti-corruption campaign have required medical treatment for abuse by their captors, putting Crown Prince Mohammed bin Salman at risk of a backlash. (NYT)

• Analysts at UBS this week: “A sharp and sustained rise in the price of oil would only follow if we were to see more serious political turmoil in Saudi Arabia, or through an escalation of proxy wars in the wider region.”

The Dallas Cowboys owner denied yesterday that he has received a “cease-and-desist” warning from the N.F.L. owners who are negotiating a contract extension for commissioner Roger Goodell, after he tried to block it. But he also pressed for a delay in the process, telling CBS Sports Radio, “We just need to slow this train down and discuss the issues at hand in the N.F.L.”

Could things go nuclear? ProFootballTalk, citing an unidentified source, reported earlier this week that some owners had been discussing how to strip Mr. Jones of his ownership. In his radio interview, Mr. Jones said called that “laughable and ridiculous.”

Extra credit: Dom Cosentino of Deadspin takes a look at how the Cowboys owner became the league’s “shadow commissioner.”

• The Morgan Stanley analyst Brian Nowak asserted this week that Jeff Bezos’s behemoth could eventually have a market capitalization of $1 trillion. (Axios)

• “The conventional wisdom is that wholesale margins are thin, but Amazon operates on even thinner margins,” Ana Gupte of the investment bank Leerink said, referring to drug wholesalers fearing that the e-commerce giant could wipe out their profits. (FT)

According to Michael Corkery and Jessica Silver-Greenberg of the NYT, the reasons the Virginia city has become the new hot spot for Chapter 11 filings, like that of Toys “R” Us, include:

• Its speedy “rocket docket” for processing cases

• Precedents favorable to debtors

• A willingness to approve high legal fees (Toys “R” Us’s lawyers at Kirkland & Ellis are billing as much as $1,745 an hour).

• Evercore has hired Paul Aaron, who was most recently at Goldman Sachs, as a senior managing director with a focus on multinational companies.

• Airbus has secured the biggest commercial plane deal in its history with an order worth nearly $50 billion from Indigo Partners, which is bolstering the fleets of the airlines in its investment portfolio. (Bloomberg)

• Forever 21 said unauthorized users may have gained access to its payment systems, potentially exposing some customers’ credit-card information. (WSJ)

• HSBC has agreed to pay 300 million euros to the French authorities to settle a long-running investigation into allegations that it helped wealthy clients evade taxes. (FT)

•Two women who said that they were raped by Uber drivers have filed a lawsuit seeking class action status and asking a court to force the ride-hailing company to change its driver screening practices. (Recode)

• Johny Srouji, Apple’s senior vice president of hardware technologies, said that it might buy hardware start-ups in Israel. (CNBC)

• Berkshire Hathaway trimmed about a third of its stake in IBM, while adding to its holding in Apple. (Bloomberg)

• One57, the residential skyscraper that was an icon of the buying frenzy in New York’s ultraluxury market, is now at the center of its slowdown, which is raising questions about how profitable this sort of property can be. (Bloomberg)

• Wells Fargo laid off about 50 employees as part of a restructuring of its credit-card processing business for small companies. (WSJ)

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Follow Andrew Ross Sorkin @andrewrsorkin, Michael J. de la Merced @m_delamerced and Amie Tsang @amietsang on Twitter.

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