[continued from previous message]   
      
   the latest twist, investigated allegations that AT&T engaged in   
   questionable accounting tactics to inflate the projections on which the   
   value of the Warner assets was based.   
      
   Mr. Cook, the AT&T spokesman, strenuously denied any wrongdoing. But after   
   Warner Bros. Discovery’s chief executive, David Zaslav, pressed the issue   
   this summer with his counterpart, Mr. Stankey, AT&T agreed to pay Warner   
   Bros. Discovery $1.2 billion by the end of August. AT&T also agreed to   
   resume providing the HBO Max streaming service to its wireless customers,   
   a “soft” deal that could be worth hundreds of millions of dollars to   
   Warner.   
      
   On June 14, 2018, when the AT&T-Time Warner deal closed, AT&T stock was at   
   $24.56. This past week it was just under $19, a decline of 23 percent,   
   even as the S&P 500 gained more than 40 percent over the same period.   
      
   How could so much shareholder value have evaporated in so short a time?   
      
   ‘Are you sitting down?’   
   Allen & Company’s Sun Valley media conference, the annual “billionaires’   
   summer camp,” has a long history of spawning media deals, from Disney’s   
   acquisition of ABC to Jeff Bezos’ purchase of The Washington Post. And   
   during the summer of 2015, Mr. Bewkes approached Mr. Stephenson there   
   about a possible AT&T bid for Time Warner.   
      
   Mr. Stephenson had made his reputation in large part on his deal-making   
   acumen. Unlike other newcomers to Hollywood, he had no interest in red   
   carpet events and never attended any, preferring to spend time at his   
   Wyoming ranch. An Oklahoma native who had worked for AT&T and its   
   predecessors since 1982, he’d been AT&T’s chief executive since 2007.   
      
   Since then, AT&T’s stock price had gone nowhere, barely recovering from   
   the Great Recession as fierce competition in wireless squeezed profit   
   margins. Mr. Stephenson and Mr. Stankey saw media as a much-needed path to   
   growth.   
      
   Time Warner’s Mr. Bewkes had heard all of this and had his doubts about   
   AT&T’s ambitions, but that was not his concern. A Yale graduate with a   
   Stanford M.B.A., Mr. Bewkes had risen through the ranks of HBO, where as   
   president of the cable network he helped bring the world “The Sopranos.”   
   He became chief executive of Time Warner in 2008 as the financial crisis   
   was brewing, and over the next 10 years Time Warner stock skyrocketed.   
      
   But Mr. Bewkes saw enormous threats on the horizon. Cord-cutting   
   undermined the lucrative cable model and with it the Turner Broadcasting   
   cable channels, including CNN and the Cartoon Network, which accounted for   
   more than half of Time Warner’s revenue and earnings. The rise of Netflix   
   and Amazon Prime Video, and the accompanying multibillion-dollar spending   
   race on content delivered via the internet directly to consumers, were a   
   threat to HBO and the Warner studio. HBO had already lost bidding wars for   
   the hit series “House of Cards” and “The Crown” to Netflix.   
      
   A sale of Time Warner, valuing it at over $100 a share, would be a   
   windfall for Mr. Bewkes and his shareholders. Still, he wanted Time   
   Warner’s properties and employees, many of them his friends, to wind up in   
   good hands.   
      
   Rupert Murdoch’s 21st Century Fox had approached Mr. Bewkes and Time   
   Warner with an $80 billion offer in 2014, which Time Warner rejected as   
   too low. But Mr. Bewkes could see the writing on the wall.   
      
   When the two executives spoke in 2015, Mr. Stephenson recalled recently,   
   he told Mr. Bewkes that he was too wrapped up in closing a deal to acquire   
   DirecTV but that Mr. Bewkes should come back later — AT&T might be   
   interested.   
      
   A year later, in the summer of 2016, Mr. Ginsberg, Time Warner’s head of   
   communications, had breakfast with Peter Chernin, his former boss at News   
   Corp. and a trusted adviser to Mr. Stephenson, at a cafe in Menemsha on   
   Martha’s Vineyard. Mr. Chernin asked Mr. Ginsberg what he thought Time   
   Warner’s price might be. “We’d need $105 to $115 a share,” Mr. Ginsberg   
   suggested, pretty much off the top of his head. Mr. Chernin didn’t blanch.   
      
   As soon as breakfast was over, Mr. Ginsberg called Mr. Bewkes. “Are you   
   sitting down?” he asked. “Because I’ve got some incredible news that will   
   stun you.”   
      
   ‘They don’t own the company yet’   
   The two companies announced their deal on Oct. 22, 2016. Neither AT&T nor   
   Time Warner management was worried about antitrust or other regulatory   
   issues since vertical combinations — mergers of buyers and suppliers,   
   rather than competitors — were almost never challenged on antitrust   
   grounds. No such case had been litigated in 40 years.   
      
   They had failed to reckon with the populist skepticism about big mergers   
   or Donald J. Trump’s hostility to established media, especially CNN, which   
   he repeatedly denounced as “fake news.” Mr. Trump’s ire was especially   
   intense toward CNN’s chief executive, Jeff Zucker, ignoring (or   
   forgetting) that it was Mr. Zucker, as head of NBC Entertainment, who put   
   “The Apprentice” into NBC’s prime-time lineup and made Mr. Trump a TV   
   star.   
      
   The proposed megadeal was one of the few issues — perhaps the only issue —   
   to instantly unite the political right and left, with Mr. Trump, the   
   Republican nominee for president, and the liberal senators Bernie Sanders   
   and Elizabeth Warren unlikely allies in opposing it.   
      
   With the unexpected election of Mr. Trump in November, AT&T realized it   
   had a problem. In January 2017, the company hired the president-elect’s   
   personal lawyer, Michael Cohen, paying him $50,000 a month to advise it   
   on, among other topics, the Time Warner merger, even though Mr. Cohen had   
   no known antitrust expertise.   
      
   The move appeared to yield immediate results. (Mr. Cohen did not respond   
   to a request for comment.)   
      
   Just days after Mr. Cohen was hired, Mr. Stephenson invited Mr. Bewkes to   
   join him for a Trump Tower meeting with Mr. Trump, along with Mr. Trump’s   
   son-in-law, Jared Kushner, and adviser Stephen K. Bannon. Mr. Bewkes   
   declined.   
      
   “I wasn’t going to talk about our coverage or oversight of any of our   
   companies, and sure as hell not with a politician,” Mr. Bewkes recalled.   
   “We covered these people.”   
      
   Mr. Stephenson visited Trump Tower on Jan. 12. Mr. Stephenson recalled   
   that Mr. Trump had brought up the subject of CNN and attacked Mr. Zucker   
   before stopping himself with the realization that he shouldn’t be talking   
   about CNN. Mr. Stephenson said he had offered no response.   
      
   Mr. Trump kept up his Twitter diatribe against CNN and Mr. Zucker. But on   
   June 22, Mr. Stephenson visited the White House along with other chief   
   executives, and Mr. Trump was surprisingly effusive in his praise for the   
   AT&T chairman, saying publicly that he had done “really a top job.”   
      
   Mr. Stephenson’s warm presidential reception was shortly followed by a   
   visit to Time Warner by Larry Solomon, the head of corporate   
   communications for AT&T. Mr. Solomon told Mr. Ginsberg that he was there   
   to give him a “heads up” that “we’re going to fire Jeff Zucker,” Mr.   
   Ginsberg recalled.   
      
   “Why?” Mr. Ginsberg asked. CNN was thriving, generating more than $1   
   billion in annual profit for Time Warner.   
      
   Mr. Solomon responded that MSNBC had overtaken CNN in the ratings.   
      
   Mr. Ginsberg didn’t buy that. “What does that matter?” he asked. CNN had   
   never been driven primarily by ratings.   
      
   As soon as Mr. Solomon left, Mr. Ginsberg got Mr. Bewkes on the phone, Mr.   
   Ginsberg recalled. “You’re not going to believe this,” he said. “They want   
   to fire Zucker.”   
      
   “Stop right there,” Mr. Bewkes responded. “They don’t own the company yet,   
   and they may never own the company.”   
      
      
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   --- SoupGate-Win32 v1.05   
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