Late last summer, President Trump fired off a tweet that felt off-topic, even for someone who routinely uses Twitter to try to divert the attention of the media. It was the same week his former campaign chairman Paul Manafort was found guilty of multiple crimes and his personal attorney Michael Cohen agreed to a plea deal, but for some reason, the president was tweeting about the seizing of land from white farmers in South Africa, who were also the victims of “large scale killing.” The language echoed a rallying cry of white supremacist groups who are obsessed with post-apartheid South Africa, but Trump picked up on it after a misleading segment on—what else?—Fox News.
Trump appears to routinely set policy and priorities based on whatever Fox is airing, a relationship charted in a stunning exposé by the New Yorker’s Jane Mayer. It might be easy to assume that this is simply synergistic: Fox News caters to the very voters who form Trump’s base, which is why its hosts carry water for a scandal-beset president, who in turn takes cues from Fox’s hosts (for example, with his hyperfocus on the border wall). One important question that Mayer’s piece asks is: Other than ratings, what does Fox News get out of it? Mayer’s reporting shines some important light on that question—and suggests an explanation for several of the more baffling decisions regarding media ownership that have come out of the executive branch.
Last year, the Department of Justice challenged the $85 billion merger between AT&T and CNN’s parent company, Time Warner, on antitrust grounds. There are valid concerns about reduced competition that critics of the deal have raised. But one normally wouldn’t expect any of them to come from a Republican administration that favors less governmental intervention—except, perhaps, one led by a president who really, really dislikes CNN. While the Justice Department said it opposed the merger independent of the president’s feelings, Trump vocally opposed the deal, and, Mayer reports, “many people suspected that his objection was a matter of petty retaliation against CNN.” Most shockingly, Mayer reports that Trump ordered his former chief economic adviser, Gary Cohn, to pressure the Justice Department to try to block the deal. Though Cohn reportedly told White House chief of staff John Kelly, “Don’t you fucking dare call the Justice Department. We are not going to do business that way,” the story makes clear that Trump wanted the merger quashed and made his feelings very well known.
If Trump really pressured his aides to try to kill the merger, it calls into question other actions—and nonactions—on the part of the Trump administration regarding tech and media policy. Why did the Justice Department decide to challenge the merger of AT&T and Time Warner and not the merger of Disney and Twenty-First Century Fox, even though, as Mayer notes, the new entity stands to account for half of all box-office revenue in the country and leave the Murdoch family—which is selling most of its entertainment assets to Disney but keeping Fox News—$2 billion richer? Certainly, that merger will make it harder for new market entrants in the entertainment industry to gain a foothold. If anything, it’s a less ambiguous antitrust concern than the one at play in AT&T and Time Warner. In both cases, the DOJ took the position that benefits Rupert Murdoch.
That’s not even the most confusing inconsistency. Consider the Sinclair bid to buy Tribune Media, which would have given the conservative broadcaster, already the largest television owner in America, control of a total of 232 stations across the country. For months, the FCC rolled out a deregulatory red carpet that seemed designed to help the merger pass. FCC Chairman Ajit Pai, a Trump appointee, led the independent agency to nix all kinds of rules, effectively lifting the limits on the number of stations a single company could own nationwide and in a single market. The FCC eliminated an 80-year-old rule requiring broadcasters to maintain a studio in or near their community of license, which was meant to ensure some level of local programming and accountability in each market. Now, a broadcaster can own a station in Milwaukee and run it from California with no local presence. The FCC also loosened the local-ownership limit that prevented a single television-station owner from owning more than one of the top four stations in a single market. It also rolled back rules that allowed for stations to share studio space and jointly sell advertising. And all of this coincided with Sinclair’s push to expand—at a time when its “must-run” segments were forcing local stations to run unerringly pro-Trump opinion content.
But in July, just as the Sinclair deal appeared set for a regulatory signoff in time for the midterm elections, Pai suddenly criticized the deal, saying that the evidence in front of him suggested that Sinclair’s divestitures (to bring it in line with national ownership limits) weren’t made in good faith and that the company would continue to run the stations it gave up. After that, the deal died in the water.
One could theorize that this was to save his own hide: At the time, the FCC’s inspector general was reviewing Pai’s deregulatory moves following a request from some members of Congress. But similar investigations haven’t stopped the chairman before. He went ahead with the gutting of net neutrality while under investigation—and that one eventually concluded that Pai hadn’t been truthful about a cyberattack he claimed caused the agency’s comment system to crash. (It was actually because of a John Oliver segment.)
We don’t really know what motivated Pai’s change of heart. It was certainly out of line with Pai’s usual pro-industry zeal. But as former FCC Chairman Reed Hundt put it to Mayer, the only way to explain the “extremely unusual” antitrust and telecommunications agenda under Trump “is that they’re pro-Fox, pro-Fox, and pro-Fox.” And Sinclair was poised to become a major Fox competitor.
Which brings us back to CNN. If the Department of Justice did truly want to reinvigorate the nation’s atrophied antitrust policies, it’s not clear why it would start with this case. The combination of AT&T and Time Warner is called a vertical merger, meaning the two companies weren’t previously competing with each other. This was the first time since the Nixon administration that the Justice Department has challenged a vertical merger like this, and it didn’t exactly bring its A-game. The agency’s lawyers argued that by leveraging Time Warner properties like content—like the Harry Potter franchise or HBO—AT&T would be able to drive up its prices. Citing a dynamic entertainment landscape of content distribution that includes competitors like Netflix and Hulu, however, the court found this unconvincing. The Justice Department lost in court and again lost an appeal. There was probably a better case to make, as I wrote recently, but that one would’ve put the DOJ at odds with the FCC’s view on net neutrality. Taken all together—the weak arguments, the difficulty of the case, the lack of scrutiny of other media mergers—the whole ordeal felt suspect.
The Justice Department denies that Trump’s antipathy toward CNN factored into its decision to fight the merger. We certainly have no evidence he directly ordered the agency to do anything regarding the deal. What we do now know is that he reportedly wanted his administration to kill it—and told senior aides to make it happen.
