DOJ Appeal of AT&T-Time Warner Merger ‘Clear Gift to Disney’

The Wall Street Journal reports Comcast Corp.’s bid for 21st Century Fox  hit a setback after the Justice Department said Thursday it would appeal a federal judge’s decision to bless a merger of AT&T Inc. and Time Warner Inc.

Comcast had used the earlier ruling to rebut concerns from Fox that its bid would face regulatory risk. AT&T’s deal for Time Warner married a company primarily focused on distributing content with one that produced it, just like Comcast’s bid for Fox. Comcast made its $65 billion offer for Fox a day after the ruling last month.

The government’s appeal of that earlier decision could weaken Comcast’s position in the eyes of Fox’s board as the cable giant battles with Walt Disney Co. over Fox. Disney followed Comcast by raising its offer to purchase most of Fox’s assets to more than $71.3 billion.

Comcast executives believe that the Justice Department is likely to lose its appeal given the strong wording of the prior decision and industry precedents, including Comcast’s own 2011 acquisition of NBCUniversal, people familiar with their thinking said. However, the appeal could push Comcast to narrow its focus to one of the main prizes in the Fox chase: European pay-TV operator Sky PLC.