Questions about the fate of CNN have loomed for months over the Trump administration’s review of the merger, especially given the president’s frequent Twitter attacks on the network and his denunciation of its coverage. | Getty Sources: AT&T, Time Warner under pressure to dump CNN

AT&T and Time Warner are under pressure from the Justice Department to offload CNN to win the Trump administration's approval of their $85 billion merger, according to sources familiar with the discussions.

DOJ presented the companies with an ultimatum at a meeting Monday: Sell off Time Warner-owned Turner Broadcasting, which includes CNN as well as networks like TBS and TNT, or jettison DirecTV, which AT&T acquired two years ago, one source said — adding that it's clear the real sticking point for the government is CNN, a frequent target of President Donald Trump's anger.


"The only reason you would divest CNN would be to kowtow to the president because he doesn't like the coverage," the source said. "It would send a chilling message to every news organization in the country."

Justice Department officials later said that the companies themselves offered to sell CNN but that DOJ's antitrust division rejected that option. DOJ told the companies that divesting CNN wouldn't necessarily solve the harm to the public caused by the mega-merger, the officials said.

AT&T CEO Randall Stephenson pushed back against that narrative.

"Throughout this process, I have never offered to sell CNN and have no intention of doing so," he said in a statement.

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AT&T and Time Warner see no legal basis for selling any media properties at stake in the deal, and their lawyers are preparing for a court battle should the Justice Department ultimately reject the merger, sources said. The Wall Street Journal reported last week that DOJ is preparing a lawsuit in the event it can't reach a settlement with the companies.

Questions about the fate of CNN have loomed for months over the Trump administration’s review of the merger, especially given the president’s frequent Twitter attacks on the network and his denunciation of its coverage as “fake news.” The New York Times reported in July that White House advisers had discussed using the merger as “a potential point of leverage over their adversary” — i.e., CNN — prompting Democratic senators to warn the White House against exerting any “political interference” in the deal.

Trump directed his populist ire at the merger itself during the final weeks of the presidential campaign, saying it would create “too much concentration of power in the hands of too few.”

Despite the campaign rhetoric, the companies were confident the merger review was moving toward approval until Makan Delrahim, Trump's newly installed DOJ antitrust chief, entered the picture in late September.

Before his nomination by Trump, Delrahim — a former tech and telecom industry lobbyist — said in an October 2016 television interview that that he didn't see the merger as a "major antitrust problem." But the source said Delrahim had been critical of the deal since taking the helm of the DOJ's antitrust division.

AT&T Chief Financial Officer John Stephens said at a conference Wednesday that the timing of the Time Warner merger is "now uncertain" as it continues making its case to the Justice Department. The companies agreed late last month to delay their self-imposed Oct. 22 deadline for closing the deal, which they announced more than a year ago.

Trump's longtime associate Roger Stone suggested in a tweet last month that a “house cleaning” of CNN personalities like Don Lemon, Jake Tapper and Ana Navarro will take place once AT&T completes its acquisition of Time Warner. But White House counselor Kellyanne Conway said Sunday on CNN that the administration is not interfering with the Justice Department's review of the deal.

The merger would allow AT&T, one of the nation’s largest wireless and pay-TV providers, to bulk up its media holdings with brand names including HBO and Warner Bros. in addition to CNN.

Josh Gerstein contributed to this report.

