A possible 21st Century Fox and Time Warner combination...

A possible 21st Century Fox and Time Warner combination would likely win regulatory approval, a Guggenheim Partners analyst said. Under antitrust law, each company’s products may not compete with each other, analyst Paul Gallant said Thursday in a research note. But adding the combined company to pending pay-TV deals, like Comcast/Time Warner Cable and AT&T/DirecTV, “makes the political dynamic somewhat risky and unpredictable,” he said. 21st Century Fox and Time Warner content may be separate products from the distributors’ perspective, he said, and the companies probably don’t compete with each other for license fees from distributors: “With rare exceptions, distributors need channels from all content companies to offer a competitive product.” The channels owned by each company may well be its own product market, he said. The deal’s effect on bargaining power with pay-TV distributors will probably be a key focus for antitrust regulators, he said. 21st Century Fox probably wouldn’t need FCC approval because Time Warner doesn’t have broadcast licenses that would need FCC approval to transfer, he said. Attorneys had said similar (CD July 17 p12).