Pre-Summer merger activity updates, including the CMCSA spin-off, & a personal note

What’s New: Before everyone leaves for the summer, we thought it would be useful to share an update on merger-related activity in the sectors we cover. For each transaction, we have offered our analysis of the likely government process outcomes. In this note we do something a bit different; instead of diving deep on specific deals, we provide quick updates on the news affecting the antitrust environment, specific deals, and whether that has changed our outlook.

There are changes at the DOJ, but they don’t affect our outlook on any specific deals.

• There were two recent news reports that some thought signaled a change in the antitrust environment.
• The first was about DOJ leadership signaling to the DOJ staff that it wanted to settle, not litigate, antitrust cases.
• In a different environment, this could have been an important signal. Since the summer of 2025, however, particularly with the HPE settlement and the discussion by former Trump DOJ Antitrust officials about the “rule of lobbyists,” it has been clear that this DOJ Antitrust Division does favor settlements over litigation.
• The second was about new leadership at the antitrust division, Adam Candeub. He has an extensive written record, particularly as a professor, on antitrust issues. [1]
• But we don’t think the Antitrust Division will act on the jurisprudence suggested by that academic record. Rather, we expect the antitrust division to follow the pattern of the last 18 months in which, rather than pursue cases based on a philosophical understanding of the role of antitrust or the specific facts of the case, the division resolves disputes based on the White House’s preferences.
• Bottom Line: The news about settlements and the new leadership does not change our point of view on any pending or potential future deal that we can think of.

CMCSA: A spin and what’s next.

• The big news of the week is that CMCSA is spinning off its media assets. For our New Street colleague’s financial assessment of the deal, see their note. (LINK)
• As we discussed in a short policy note reacting to the news (LINK), spin-offs reduce the level of concentration and/or reduce the risk of vertical foreclosure or other competitive risks related to vertical concentration, they do not create any antitrust problem and generally do not create any government leverage over the transaction.
• Here, however, the question will be whether the FCC attempts to in some way force conditions on the spin-off for the purpose of modifying NBC news or achieving other goals such as ending of DEI programs or giving NBC affiliates more leverage over the NBC network.
• Arguably, any transfer of the broadcast licenses to a new corporate parent requires FCC approval, even if the change is not substantial.  
• This FCC, however, may argue that the transfer raises the question of whether the prior and future owner have and will act in the public interest.[2]
• In that context, the question for investors will be whether the FCC attempts to in some way force conditions on the spin-off that has an impact on market value, in either the short-term or long-term, such as conditions that affect NBC news or work towards other Trump or Carr goals such as the ending of DEI programs or giving NBC affiliates more leverage over, and better economics from, the NBC network.
• We think any FCC effort to block the spin will fail as a matter of law, but the FCC could create speed bumps for the deal.
• The spin-off immediately created investor questions about future deals that CMCSA might try, with the acquisition of CHTR being the most talked about future transaction,[3] but not the only one, as reports of a SpaceX/CHTR partnership also emerged.[4]
• For our views on that, see our April note (LINK) in which we discussed how geographic expansion deals are generally approved and CMCSA and CHTR have cooperated in ways that suggest antitrust approval should be forthcoming.
• At that time, we thought a spin-off of NBCU would be required by the Trump Administration as the Trump Transaction Tax for allowing the deal to proceed.
• As the spin should be completed first, we think that limits the Trump antitrust and FCC leverage over the deal, though as noted above, the FCC may seek to impose conditions on NBCU.
• Our bottom line in April was that a “CMCSA/CHTR deal faces significant political obstacles, but there is a material chance that the deal could ultimately be approved, and through that process, unlock the currently depressed value of content assets.” 
• The unlocking of value may have already occurred, but the deal approval analysis remains unchanged.

NXST/TGNA

• Status: California’s federal court issued a Preliminary Injunction forcing NXST to hold assets separate. (LINK) NXST is appealing to the 9^th Circuit. A case against the FCC decision is also pending in the DC Circuit.
• Other states join California antitrust suit. Other states have joined the California case (which is largely about local concentration), specifically Indiana, Kansas, Massachusetts, Pennsylvania and Vermont, with Pennsylvania, Indiana, and Kansas having Republican AGs.
• 9^th Circuit timing: The opening briefs have been filed but oral argument has not yet been scheduled. The 9^th Circuit appeal is only about the Preliminary Injunction, but if the Circuit affirms the District Court, which we think more likely than not, there is a likelihood of a long delay. Further, if the 9^th Circuit upholds the District Court’s market definition, it is likely that NXST will lose the trial.
• All parties request trial date in summer of 2027. NXST joined the other parties in the case in requesting a trial date starting on July 7, 2027. That means that if the injunction stands, the best case for NXST consolidation is some time in 2028, all while the Tegna asset is likely to deteriorate as a standalone asset.[5] 
• The DC Circuit case, which is largely about the national consolidation and the current FCC 39% cap, is also moving forward. While denying the appellants’ request for a stay (which was mooted by the Preliminary Injunction in the California case), the court asked for briefings on the related mandamus petition and, in particular, asked the FCC to state when it expects to satisfy its nondiscretionary obligation to “pass[] upon” the pending application for review of the Media Bureau Order. The briefs have been filed with the FCC saying that while it intends to take up the matter this year, the court should not intervene to mandate the FCC’s timing.[6]
• The DC Circuit is also asking for briefings on what impact, if any, does the California Preliminary Injunction have on appellants’ ability to demonstrate irreparable harm?
• Bottom Line: No change in our outlook. Further, we think other large broadcast deals, such as deals sought by Sinclair[7] and others are likely stalled pending resolution of the NXST/TGNA deal in the two court proceedings.

PSKY/WBD

• Current Status: As expected, the DOJ has approved the deal but the way it approved the deal could prove problematic in state-driven litigation against the deal. The WSJ reported that the DOJ leadership approved the deal without giving the staff, which was considering blocking the deal, an opportunity to weigh in.
• The Ticking Fee: The timing is particularly important here as the deal provides that “In the event the transaction has not closed by September 30, 2026, WBD shareholders will receive a $0.25 per share "ticking fee" for each quarter (measured daily) until closing.”  That adds approximately $650 million per quarter to the cost.
• The FCC likely will approve the deal but there is a question of timing. Considering the news that the merged companies will be 49.5% owned by foreign entities[8] and PSKY is seeking advanced authorization to allow an even higher amount of foreign ownership, the FCC has issued a public notice with comments now having been filed.[9] 
• Further, the FCC has referred the deal to Team Telecom for their review of the foreign ownership.[10]  Bloomberg reported that the FCC is awaiting Team Telecom’s recommendation. We believe the recommendation will allow the FCC to proceed with approval, though we note that there are lingering questions of the extent of the ownership of the Chinese company Tencent.[11]
• The EU. The EU opened a Phase 1 investigation on June 2. EU rules. Under Phase 1, the EC has 25 working days to decide whether to clear the merger outright, request remedies, or escalate to a Phase 2 investigation. That is, it should make its decision by July 7 though this apparently has been extended until July 21.
• If it moves to Phase 2, that process could last up to 90 working days, thereby likely triggering the ticking fee.
• PSKY has already indicated a willingness to compromise to obtain faster approval, for example signaling that it “is prepared to divest its film distribution joint venture with Universal ​Pictures to address EU antitrust concerns.” 
• Ultimately, we think the EU will approve the deal, but the question is whether it does so with only a Phase One review or if the EU goes to a Phase two review, in which case, it is likely PSKY will have to start paying WBD shareholders the ticking fee.
• The UK. Britain's antitrust authority is reviewing the deal and will decide by August 7 whether it ​will launch a more in-depth probe. Further, yesterday, Britain's culture minister raised cultural concerns about the deal, giving the company until July 6 to respond to her concerns.[12]  Those concerns could cause further delays.
• The States. Considering significant Hollywood opposition, we think there are significant political incentives for the CA and NY AGs (and maybe a few others) to file suit. While this note will not go into details (we did so in this note LINK), we think the case is weaker than the case the states brought against NXST/TGNA, though much depends on the evidence relating to product market definitions.[13]
• PSKY, unlike NXST, will have a full statement from the DOJ articulating why the merger does not threaten competition that it can use in court to bolster its argument against the states.[14]
• The value of that statement in court, however, will be undercut by the WSJ story that reported that the DOJ’s senior leadership closed its investigation “before career staffers who were concerned about the acquisition had an opportunity to object, according to people familiar with the matter.” It further reported that “A team of career lawyers who had spent months scrutinizing the deal were leaning toward recommending a lawsuit challenging it on the grounds that the combination of the two movie studios would be anticompetitive and violate antitrust law.”
• Deal for CNN?  In addition, there were news reports that the California AG, who will lead any state opposition to the deal, would be willing to settle if PSKY divests CNN.  We are skeptical from multiple perspectives. Not only has the California AG denied the report, as a political matter it does not solve the larger California problem which is the potential loss of jobs resulting from the merger. And from a PSKY perspective, it would appear to violate the either implicit or explicit commitment to Trump by the Ellisons to change the news coverage at CNN. Having said that, we don’t think CNN is essential to the Ellisons’ interest in WBD from either a financial or a strategic perspective and keeping CNN out of the hands of the Ellisons and Bari Weiss might be seen as a win for Bonta.
• Post deal value: We continue to believe that PSKY/WBD shareholders face many risks post-closing including a risk of a talent migration. We think the FCC investigation of DIS increases those risks as it will play out that some entertainment companies will not “bend the knee” and force their talent to comply with the wishes of those in power and some view bending the knee as simply the cost of doing business. Talent will likely migrate to the former and from the latter. In this case, it will mean a migration away from PSKY.
• Bottom Line: There remains a risk that the cost of the deal is higher, due to the ticking fee and a lesser risk that state litigation could slow or block the deal. Still, the odds favor the deal being approved and closed in 2H26.

CHTR/COX

• Current Status: The FCC, New York Public Service Commission, and Connecticut Public Utilities Regulatory Authority have all approved the deal, but the deal still awaits California PUC approval.
• California recently held a 4-day evidentiary hearing on the deal. At the hearing, the major issues involved about 5,000 BEAD unserved/underserved locations in Charter territory, the lack of an affordable offer at 100/20 speeds, pricing on 300 Mbps to 1 GB plans, call center issues involving easy access to low-income plans, and the removal of Diversity, Equity and Inclusion programs to obtain FCC approval.
• After the hearing, CPUC's Public Advocates Office and California Emerging Technology Fund announced comprehensive settlements and held a settlement conference for other intervenors on them.
• The Department of Justice’s clearance under the Hart-Scott-Rodino Act expires September 15, 2026, and so there is considerable pressure on the merging companies to obtain the final approval before that date.
• CHTR has now asked the CPUC to issue a final decision by August 13, 2026, and to combine comment on the settlement agreements with briefs.
• Bottom Line: We still expect California to approve prior to the September 15th expiration, but the deal approval has a new element, in that, considering the CMCSA spin-off of its media, the closing of CHTR/Cox could ring the opening bell for discussions of a CMCSA/CHTR cable merger.

AMZN/GSAT

• We provided our view of the likely government review of the AMZN/GSAT deal in a note in April. (LINK)
• Nothing has happened that has caused us to modify our view of the likely outcome.[15]

SIRI/IHRT

• We provided our view of the likely government review of the SIRI/IHRT deal in a note in May. (LINK)
• No deal has been announced, and it appears that the odds of such a deal occurring have gone down.
• If it does occur, however, nothing has happened that has caused us to modify our view of the likely outcome.

DT/TMUS

• We provided our view of the likely government review of a DT/TMUS deal in a note in April. (LINK)
• At that time, we said we would expect approval, but it does raise questions of how the Trump Administration might seek conditions related to US/German relations (including, for example, attempting to leverage the deal to counter EU moves that SpaceX has viewed as protectionist)[16] but not necessarily related to traditional antitrust analysis.
• No deal has been announced.
• If it does occur, however, nothing has happened that has caused us to modify our view of the likely outcome.

FOXA/ROKU

• As discussed in an earlier note, (LINK) while the merger raises vertical foreclosure issues, we don’t believe the DOJ will seek to block the deal.
• Our bottom line when the deal was announced was that we thought FOXA would be successful in gaining government approval for the deal but there is a material risk that some other entity either forces FOXA to pay more or outbids FOXA and wins the deal.
• Nothing has caused us to change that point of view.

Copper retirement could lead to new deals

• In a note last year, we suggested that Chairman Carr was likely to ease the way for telcos to retire copper. (LINK)
• He has done so.[17]
• As we suggested in that note, making it easier to retire copper assets can make mid-sized ILECs with some fiber assets--but with an unknown contingency due to their copper network--more attractive to buyers of fiber assets.
• There are many mid-sized ILECs who have upgraded some, but not all, of their network to fiber.
• Under the prior regulatory regime, those assets were less attractive due to the uncertainty of the extent and cost of maintaining non-economic assets (stand-alone voice over copper) required by regulators.
• As the FCC has provided greater clarity on the limits of those costs, it should make the fiber assets more attractive.
• While there remains a policy debate between T, the FCC, and the California PUC over copper retirement issues, we think that in most of the country, the rules for copper retirement are now clear.

But is there a massive reversal coming?

• Senator Cory Booker, along with Elizabeth Warren, Martin Heinrich, Chris Murphy, and Mazie Hirono, introduced the “CLEAN Mergers Act,” that would automatically undo every corporate combination above $10 billion occurring during the Second Trump administration.
• This would affect every deal, other than NXST/TGNA, discussed in this note.
• We think the odds of passage are very low. 
• Further, even if Democrats take both the House and the Senate in November, and the bill passes in 2027, Trump will veto it and there will not be enough votes to override the veto.
• The legislation suggests, however, that there is an anti-merger backlash brewing. 
• Investment banks and enterprises are more likely to respond to it by accelerating deals so that they can be approved in the next two years, as there will be a fear that a Democratic Administration will again be tougher on transactions.
• Bottom Line: We don’t think the introduction of the legislation should cause investors to think differently about any specific deal, but it is one in a host of indicators that the cycle of political winds suggests the next several years is likely to see lots more deals.

Bottom Line: There are lots of deals pending, with more likely to come. At this point, only NXST/TGNA is in serious danger of outright rejection, but there are timing and condition issues that affect them all.

Personal note: Since the beginning of 2026, Blair has produced over 65 notes, for an average of over 10 a month. During July and August that number will be reduced to zero, as he will be taking the summer off. (To preempt questions about his health, which he received when there was a week in which he did not write anything, this hiatus is not health related other than to say, it will be no doubt healthier for him to put down the legal briefs and enjoy spending the summer kayaking, biking, hiking and other such activities with his family (including five grandkids) and friends on a lake in the Adirondacks.

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[1] For example, he wrote the chapter in Project 2025 on the FTC in which, among other things, he sounded almost like progressive forces suggesting that antitrust is more than just a way to improve consumer welfare as railed against “the use of economic power—often market and perhaps even monopoly power—to undermine democratic institutions and civil society,” and that "Antitrust law can combat dominant firms' baleful effects on democratic institutions such as free speech, the marketplace of ideas, shareholder control, and managerial accountability as well as collusive behavior with government."He also wrote that “Targeting children to create potentially harmful contracts or making parents responsible for such contractual relationships is an unfair trade practice. The FTC, therefore, has the authority, interest, and duty to protect children online from such contractual relationships.”  He further indicated that antitrust should be tougher on Big Tech. Whatever his personal views, we don’t see his comments in that chapter as likely to manifest itself as Trump Administration policy. In another interesting publication, his 2014 article "Behavioral Economics, Internet Search, and Antitrust" argued that internet search services with dominant positions can strategically select and promote co-owned services to increase consumers' costs of switching to alternative services. Again, we are skeptical that the DOJ will ground antitrust investigations on that principle that such sophisticated forms of self-preferencing constitute an antitrust violation. In 2005 article, "Trinko and Re-Grounding the Refusal to Deal Doctrine," he advocated for a broadening of the Supreme Court's narrowing of the refusal to deal doctrine in Verizon Communications v. Law Offices of Curtis V. Trinko. Such a broadening would have a significant impact on large internet platforms and others. For example, his argument would apply the essential facilities doctrine more aggressively. As we noted in discussing the antitrust risks for SpaceX, one avenue for antitrust is to deem the launch unit as an essential facility limiting SpaceX’s ability to use that platform to foreclose others competing with other SpaceX units. But again, we don’t see Candeub as likely to use his own theory as grounds for investigations that the White House would view as problematic.

[2] As Trump has accused Comcast of committing treason and Brian Roberts of being a “disgrace” it is likely he will weigh in with the FCC on the issue. Trump’s power over the agency, already high, is arguably higher considering Monday’s Supreme Court decision in the Slaughter case. (In an act of shameless self-promotion, please see this note on the implications of the decision for business in the Harvard Business Review.)

[3] There would be tax questions related to the tax-free spin of NBCU if there is a subsequent CMCSA acquisition of CHTR, but we will leave those to experts in such matters.

[4] As it is not clear what the deal would be, we will refrain from a detailed antitrust analysis. We would simply observe that: 1) we think the Trump DOJ and FCC will likely approve any deal SpaceX wishes to do; 2) approving such a deal would be in tension with Carr’s statement that with SpaceX’s purchase of SATS spectrum and changes to satellite rules, “Americans are now about to see another big upgrade as satellite begins to compete directly with traditional cable and wireless providers for in-home and mobile subscribers;” 3) despite that view, Carr and Trump DOJ will find a way to approve any such deal; 4) if the Democrats win in 2028, they may seek to undo such a deal. Doing so will be uphill but not impossible; and 5) while some may believe that antitrust may never be applied against SpaceX for fear of hurting the American national champion in space, such a deal with Charter is an example of how not everything SpaceX is doing relates to American leadership in space (and besides, antitrust policy doesn’t really believe in national champions, as George W. Bush’s FTC Chair explained in a speech entitled “National Champions: I Don’t Even Think it Sounds Good.”)

[5] The timing is likely a function of the Eastern District of California being very shorthanded; at the hearing, the judge complained about his docket, several vacancies, and other matters. We understand that there still is a judicial emergency there, probably exacerbated by immigration cases. In stating that the TEGNA assets will deteriorate in value, we are reflecting what NXST has argued. While we agree on that, we are not offering a view on the historic cause of that deterioration in which NXST blames the court while others would point to errors in NXST litigation strategy.

[6] In other words, the FCC is not committing to anything, and we doubt, absent court intervention, that the full Commission takes up the matter this year. Curiously, we also see no signs that the FCC is taking up its review of the ownership rules, despite the many years of Carr calling for reform of those rules.

[7] Sinclair’s CEO said that the television broadcast industry is “going to head towards a marketplace where you've got two large groups that the industry consolidates up to.”  He also said that the state AG case against NXST/TGNA was “very flimsy.” As to the first point, we think it is clear evidence of where he would like the industry to go. As to the second, after calling the case “very flimsy” he seemed to contradict himself by saying “And we believe that now that we've seen the playbook, any future transactions, we can significantly mitigate a similar playbook in future transactions. And I think just there's a lot of unique features in the Nexstar-Tegna deal, like it was essentially a No. 1 and No. 2 coming together, which certainly wouldn't be what you would expect mathematically can happen in the next combination…And we do think future large transactions will learn a lot from this process and be able to significantly mitigate the risk.”  In other words, it’s a “very flimsy” case but the specific facts of the case make it strong in a way that Sinclair can avoid in its future deal making. We will let others evaluate Ripley’s performance as CEO, but we will urge investors not to take seriously the legal analysis of any CEO with an interest in the outcome of a case.

[8] This, of course, arguably violates the Communications Act which restricts foreign entities from holding more than a 25% indirect equity or voting interest in a U.S. company that holds broadcast licenses. But just as with the NXST/TGNA which violated the national ownership cap, the FCC can waive those rules (though in the NXST case only for two years) if it finds such a waiver to be in “the public interest.”  Which we think is exactly what will happen here as well. We are all just sailing on The Black Pearl. 

[9] FCC Commissioner Gomez has commented on the Foreign Ownership issue, saying that there are “serious unresolved issues about how this foreign investment may jeopardize national security” and calling for the foreign investment agreements to be made public. While we don’t think the two Republicans will agree with her, the likely FCC ruling to waive the rule is another potential vehicle to challenge the deal.

[10] There is also a question of whether the deal is referred to the Committee of Foreign Investment in the US (CFIUS). (There are differences between a CFIUS and a Team Telecom review but for purposes of this note, we think it sufficient to simply say CFIUS reviews foreign investments in U.S. businesses broadly, while Team Telecom reviews applications for FCC licenses and the transfer of existing FCC licenses where foreign ownership or control is involved. If CFIUS gets involved in the deal, we will provide a more detailed explanation of its process and its likely impact on the merger review.) Again, at this point, we think the foreign ownership review is more likely to affect timing than the ultimate resolution.

[11] As a letter from two Democratic Senators noted “In addition, Tencent Holdings Ltd. holds an existing minority nonvoting stake in Paramount Skydance, dating to a strategic investment in Skydance Media in January 2018.”  The letter further notes that Tencent is a “company the Department of Defense has designated a Chinese Military Company, whose participation has shifted from a $1 billion commitment to withdrawal to a reported re-entry at a lower amount, calibrated at each stage to avoid triggering the very review this letter requests. The fact that Tencent withdrew and has reportedly re-entered at a lower dollar amount does not eliminate the CFIUS question—it underscores it. If anything, the pattern of withdrawal and re-entry—each time at a level designed to stay below the jurisdictional threshold—is itself potential evidence that the transaction’s foreign capital structure is being managed to evade review, not to eliminate the national security concerns under Section 721.”

[12] She said “If I decide to issue an Intervention Notice, the next stage would be for Ofcom to assess and report to me on the public interest considerations, and for the Competition and Markets Authority (CMA) to assess and report to me on whether a relevant merger situation has been created, and any impact this may have on competition.”

[13] A group of consumers has already filed an antitrust complaint against the deal but we think the real antitrust risk for the deal will be with the states, if some states choose to file such a complaint. The consumer complaint, however, does provide a template for how the states may frame their own complaint.

[14] Such DOJ statements on deals they approve are rare. The only other one we can think of in the recent past was the DOJ statement on approving the TMUS/US Cellular deal. While we expect PSKY to use the DOJ analysis in court, we don’t expect it to use other arguments it has been making publicly, such as that the opposition to the deal is a function of NFLX engaging in a “scorched-earth campaign” against the deal or opposition to the deal being a function of antisemitism. While we question the factual basis for such arguments, we understand the political incentives involved in making such arguments. Our point (other than to make a sly reference to the unimportance of actual evidence in making political points in DC policy circles these days) is to note that neither assertion will be relevant to the court proceeding, which will focus on such boring topics as product market definition.

[15] The only modification would be that in that note, as well as previous notes, we jokingly suggested that AMZN might have to pay a Trump Transaction Tax by doing another money losing production about a member of the Trump family. Considering the news that AMZN is exploring bringing back the Apprentice but this time starring Donald Trump Jr., we wish to clarify that we are no longer joking, and indeed, congratulate AMZN for adjusting so quickly to the current controlling antitrust jurisprudence.

[16] See this filing by SpaceX on April 16 urging the FCC to act against what it characterizes as protectionist EU satellite policies.

[17] In his announcement of the new rules regarding copper retirement, Carr said the new rules “will allow providers to retire their decades-old and increasingly expensive copper line networks, freeing up tens of billions of dollars annually for the roll out of upgraded, high-speed networks to more Americans.”  We wish to assure investors that nothing in the rules requires the companies saving the money to invest that money in new networks. The companies are free to do so but they are also free to use the funds for dividends, share buybacks, acquisitions or anything else they want.