Scott Pruitt Before the E.P.A.: Fancy Homes, a Shell Company and Friends With Money

According to real estate records, the 2003 purchase of the house for $375,000 came at a steep discount of about $100,000 from what Ms. Lindsey had paid a year earlier — a shortfall picked up by her employer, the telecom giant SBC Oklahoma.

SBC, previously known as Southwestern Bell and later as AT&T, had been lobbying lawmakers in the early 2000s on a range of matters, including a deregulation bill that would allow it to raise rates and a separate regulatory effort to reopen a case involving allegations that it had bribed local officials a decade earlier. Mr. Pruitt sided with the company on both matters, state records show.

In 2005, the shell company — Capitol House L.L.C. — sold the property for $95,000 more than it had paid. While shell companies are legal, they often obscure the people who have an interest in them, and none of Mr. Pruitt’s financial disclosure filings in Oklahoma mentioned the company or the proceeds — a potential violation of the state’s ethics rules.

The Oklahoma City deal, which has not been previously reported, was one of several instances in which Mr. Pruitt appeared to have benefited from his relationships with Mr. Kelly and Mr. Wagner while in state politics.

During his eight years as a Republican state senator, Mr. Pruitt also upgraded his family residence in suburban Tulsa from a small ranch-style home to a lakefront property in a gated community. In addition, he bought a sizable stake in a minor league baseball team, and took a second job at Mr. Wagner’s corporate law firm. Mr. Kelly’s bank, SpiritBank, would be there for much of it — providing financing for Mr. Pruitt’s Tulsa home and his stake in the baseball team, as well as the mortgage for the Oklahoma City house.

Mr. Pruitt’s interactions with SBC also show that his blurring of lines with lobbyists has roots in his Oklahoma years. One of the issues at the E.P.A. that has gotten Mr. Pruitt in trouble with government watchdogs involved his renting a room in Washington for $50 a night from the wife of an energy lobbyist who has had business in front of the agency.

Lobbyists and others in Oklahoma state politics who encountered Mr. Pruitt recalled him as a tough competitor who always had his eye on a higher office. Some called him a “Boy Scout” who was stingy with his money, while others said privately that he had exuded a sense of entitlement — that rules did not apply to him.

David Walters, a former Oklahoma governor and Democrat, described Mr. Pruitt as someone who looked out for himself over the needs of constituents, especially during his years as attorney general.


“For those ego-minded politicians, it would be pretty cool to have this house close to the capitol,” said Marsha Lindsey, the lobbyist who previously owned the home.

Brandon Thibodeaux for The New York Times

“I was disappointed to find him operating in a hyperpartisan manner and seemingly representing corporate interests over Oklahoma citizens,” Mr. Walters said.

In response to questions submitted by The New York Times about Mr. Pruitt’s finances in Oklahoma, an E.P.A. spokeswoman said Mr. Pruitt’s business dealings with Mr. Kelly and Mr. Wagner “were ethical” and his stake in the shell company “was a simple real estate investment.”

“Mr. Wagner and Mr. Kelly left high-profile positions in law and banking in Oklahoma, to serve in the administration,” the spokeswoman said in an email. “They are dedicated E.P.A. employees who have earned the respect and admiration of E.P.A. career employees across the country. They serve the country professionally, and transparently — and are committed to ensuring the programs they work on are successful.”

Rubbing Shoulders in Oklahoma City

The house on Northeast 17th Street in the historic Lincoln Terrace neighborhood here was built in 1928 and has a grand staircase and an arched doorway. Ms. Lindsey said one of the home’s attractions was that it looked out on the white dome of the State Capitol.

Mr. Pruitt stayed in the house for parts of 2004 and 2005, neighbors said. The residence put him within walking distance of his job — legislators worked only part of the year, mainly from February through May — and also near SBC Bricktown Ballpark, which was home to his baseball team, the RedHawks, now known as the Dodgers.

Jim Dunlap, then a Republican leader in the State Senate, said he rented a room from Mr. Pruitt above the garage. He was under the impression that Mr. Pruitt had bought the home as an investment with a group of lawyers, he said.

“This was a place where you slept and had dinner,” Mr. Dunlap said. “It was all above board.”

Oklahoma campaign disclosures filed by Mr. Pruitt at the time made no mention of the home purchase or the rental agreement with Mr. Dunlap. Real estate records show that the transfer of ownership from Ms. Lindsey, the lobbyist, was rather complicated and involved multiple steps — none of them with any public reference to Mr. Pruitt, though the E.P.A. spokeswoman confirmed that he was one of five co-owners of the shell company.


The shell company was registered to Kenneth Wagner, an E.P.A. aide and law school friend of Mr. Pruitt’s.

Maryland Department of Natural Resources

When asked whether such a disclosure would be necessary, the executive director of the Oklahoma Ethics Commission, Ashley Kemp, referred The Times to a 2005 ethics manual. The rules required disclosing “every business or entity” in which an official held securities valued at $5,000 or more. Securities were defined to include “documents that represent a share in a company.”

The E.P.A. spokeswoman did not respond to questions about Mr. Pruitt’s disclosure filings in Oklahoma.

In November 2003, Ms. Lindsey signed the deed of the home over to a relocation company SBC had hired to handle her move and severance. She was reimbursed for close to $475,000, the amount she had paid for the house in 2002, as her contract required, she said.

The next day, the relocation company signed the property over to Jon Jiles, a health care executive who has a range of business interests and made contributions to Mr. Pruitt’s political campaigns. Records show no mortgage was involved, and Mr. Jiles paid $375,000 in cash.

That December, Mr. Wagner officially registered the Capitol House shell company with the Oklahoma authorities, and Mr. Jiles transferred the deed to the newly formed company. Mr. Jiles was listed as a manager of Capitol House, and Mr. Wagner as the registered agent.

The following month, SpiritBank, where Mr. Kelly was chief executive, approved a mortgage in the amount of $420,000 in the name of Capital House L.L.C., another spelling of the entity.

Ms. Lindsey, the former lobbyist, said she had been focused on her impending move to Dallas, and had deferred the sale and other arrangements to the company’s relocation agent. She said she had known nothing about the involvement of the shell company and did not recall the final sale price. “The bottom line is — it is unusual to take a $100,000 loss on the house” after being on the market for just a few weeks, she said.

Asked about the drop in price, AT&T said in a statement that two independent firms appraised the house and that its average value came to $390,000. The valuation and sale were handled by the relocation business, the company added.


The State Capitol in Oklahoma City. Lobbyists and others in state politics recalled Mr. Pruitt as a tough competitor who always had his eye on a higher office.

Brett Deering for The New York Times

Mr. Jiles, in an email exchange, said he became involved because Mr. Wagner presented the house as “a good deal” and a convenient place to stay. He said he had no other business interactions with Mr. Pruitt.

“A cash transaction was most likely used because sellers will often sell for less if it’s a cash deal rather than a finance deal,” Mr. Jiles said. “And I was likely the one most able to do a cash deal at the time.”

In a statement, SpiritBank’s chief executive and president, Rick Harper, said the bank was legally prohibited from commenting on specific loans, but added, “SpiritBank is confident these loans were made in accordance with applicable laws and regulations.”

The deal came at a time when SBC was a major employer in the state and a lobbying force in Oklahoma City.

As president of SBC Oklahoma and a registered lobbyist, Ms. Lindsey said she entertained lawmakers at her home. Moreover, SBC was known to court lawmakers with gifts, including tickets for Mr. Pruitt and others to watch Oklahoma State University play in the men’s basketball Final Four in 2004, The Oklahoman reported at the time.

“It gives us a chance to try to build a relationship with a lawmaker or an official,” a spokesman, Andy Morgan, told the newspaper. “Events like that offer a much more relaxed atmosphere.” He added: “We’re one of the state’s largest employers. It’s important that lawmakers are informed about issues affecting our company.”

The prospect of another investigation into a longstanding bribery case had especially rattled SBC. In the early 1990s, an SBC lobbyist had been found guilty in federal court of paying a bribe to a public utilities commissioner to sway a vote that allowed the company to keep federal tax savings rather than disburse them to its ratepayers. But the vote itself was never overturned, and in 2003, another commissioner proposed reopening the investigation, claiming SBC still owed billions of dollars in refunds. The commissioner dropped his plans for an investigation after state legislators, and the attorney general at the time, Drew Edmondson, pushed back against the effort.

Later, when Mr. Pruitt became attorney general, he helped quash another attempt to revisit the SBC bribery case. In a March 2011 letter, Mr. Pruitt’s office warned that any commissioner who reopened the investigation could face prosecution for the misuse of public funds.


Mr. Pruitt with Albert Kelly, a top aide at the E.P.A. Mr. Kelly, previously chief executive of SpiritBank, was recently barred from working in the finance industry.

M. Scott Mahaskey/Politico

A Run of Good Fortune

Around the same time Mr. Pruitt invested in the house in Oklahoma City, he had finished a big business deal that involved Mr. Kelly, Mr. Wagner and a campaign donor who ran a large staffing company.

A baseball player in college, Mr. Pruitt bought an approximately 25 percent stake in the Oklahoma City RedHawks and became the team’s managing partner, making him a highly visible spokesman for the local team. Mr. Wagner also purchased a small stake, and Mr. Kelly’s bank provided financing for the deal, as first reported by The Intercept, which also disclosed the bank’s loans for one of Mr. Pruitt’s suburban Tulsa homes.

Mr. Pruitt’s main partner was Robert Funk, the business magnate who ran Express Services, the staffing firm. The sale price was not disclosed, but news reports suggested they paid over $11.5 million, with Mr. Funk carrying the biggest load.

Two months after the deal closed in November 2003, Mr. Funk attended a news conference where Mr. Pruitt announced legislation that would make it harder for Oklahoma workers to claim certain kinds of injury compensation, something that would benefit companies like Mr. Funk’s.

The relationship continued, with Mr. Funk serving as campaign chairman during Mr. Pruitt’s unsuccessful bid for lieutenant governor in 2006. Mr. Pruitt announced his candidacy outside the ballpark and cited his efforts on workers’ compensation among his achievements.

After losing the election, Mr. Pruitt took a break from public office, but continued his business relationship with Mr. Funk, proposing a $200 million town center on a parking lot next to the ballpark. The City Council balked at the project, but Mr. Pruitt’s ambitions and prominence grew.

Back at home in Tulsa, Mr. Pruitt worked with Mr. Wagner’s firm, which had offices in SpiritBank’s building. As a corporate lawyer, Mr. Wagner frequently represented the bank, but also represented a used car dealership run by Mr. Pruitt’s family.

In 2004, Mr. Pruitt upgraded from a modest one-story home where his family had lived for over a decade to a $605,000 lakeside house a mile away. SpiritBank financed the home. The E.P.A. spokeswoman said Mr. Pruitt was able to afford the house “due to his sale of personal assets.”


Mr. Pruitt with Robert Funk in 2003. They invested together in the minor league baseball team the Oklahoma City RedHawks.

The Oklahoman

In September 2010, as Mr. Pruitt was on his way to successfully winning his race for attorney general, he and Mr. Funk announced that they had sold the RedHawks. They did not disclose the price, but Forbes estimated its value a few years later at $21 million. SpiritBank, where Mr. Kelly was still chief executive, “played a key role in facilitating” the deal by providing acquisition financing, a news release said.

As a candidate for attorney general, Mr. Pruitt was not required to disclose the extent of his assets and how much money he made, but there were hints that his finances had improved since his early days as a state senator. Early into his term, he and his wife paid $1.18 million for a 5,518-square-foot Cotswold-style stone residence, featured in a book on Tulsa homes. It has five fireplaces, a library and a guest apartment.

The Attorney General Years

During his six years as attorney general, Mr. Pruitt blazed a path of spending that holds new meaning now that his E.P.A. expenditures are the subject of investigations and growing political outrage.

Mr. Pruitt moved the attorney general’s outpost in Tulsa to a prime suite in the Bank of America tower, an almost $12,000-a-month space that quadrupled the annual rent. He required his staff to regularly drive him between Tulsa and Oklahoma City, according to several people familiar with his time as attorney general.

And he channeled state contracts to Mr. Wagner’s law firm, which was already doing business with the state.

From 2011 to 2017, state records show, the attorney general’s office awarded more than $600,000 in contracts to Mr. Wagner’s Tulsa-based law firm, Latham, Wagner Steele & Lehman — greatly increasing work with the firm, which had gotten a total of about $100,000 over the four years before that. These contracts are not competitively bid. The additional expenditures reflected an approach, contentious even among some fellow Republicans, to hire private lawyers for state business, often for cases challenging federal regulations.

“He said that these people had special expertise that his agency didn’t have,” said Paul Wesselhoft, a Republican former state representative. “He has an army of lawyers with expertise. He didn’t have to spend that extra tax money to hire another law firm. It didn’t seem frugal.”

Mr. Pruitt used the Bank of America building as a base for his growing political ambitions. Oklahoma Strong Leadership, a political action committee he formed in 2015 to help finance fellow Republicans’ campaigns, operated out of the building. The group shared a suite with another PAC tied to Mr. Pruitt, Liberty 2.0, as well as his campaign office.

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U.S. Said to Investigate AT&T and Verizon Over Wireless Collusion Claim

The investigation highlights a push by the Justice Department’s antitrust chief, Makan Delrahim, to crack down on the opaque world of intellectual property, or I.P., standards. He has said the Justice Department will scrutinize potential coordination in standards-setting organizations that can hurt competition.

“In the context of antitrust and I.P., we will be inclined to investigate and enforce when we see evidence of collusive conduct undertaken for the purpose of fixing prices, or excluding particular competitors or products,” Mr. Delrahim said in a speech this month at a conference in Washington. He previously warned of the potential for “cartel-like behavior” by competitors that got together with standards-setting organizations.

At the same time, the Justice Department is suing AT&T to block its $85.4 billion merger with Time Warner. Mr. Delrahim has said the deal will hurt competition and lead to higher prices for cable customers. AT&T and Time Warner have strongly disputed the claims in a federal trial that is expected to end this month.

Currently, most mobile phones use SIM cards, which contain unique identifying information about a user and are inserted into the devices so the phones can function. People typically have to buy a new SIM card when changing carriers.

The eSIM technology, which was introduced in early 2016, is embedded in mobile phones and other devices so that people do not need SIM cards anymore.


The investigation may also include major American carriers other than AT&T and Verizon, a person with knowledge of the inquiry said.

Brandon Thibodeaux for The New York Times

The eSIM technology is supported by gadget makers including Apple, Google and Microsoft, as well as several wireless carriers globally and in the United States. The Apple Watch 3, Google Pixel 2 smartphone and Microsoft Surface all have eSIM abilities, for example. The technology would make it easier for people to use local carriers when traveling internationally and would free up storage space in devices to use for other technologies like bigger processors and batteries.

The push by the major carriers to restrict the flexibility of eSIM runs counter to a movement in which consumers were gaining more flexibility to move from carrier to carrier. In late 2013, under pressure by the Federal Communications Commission, the wireless industry agreed to let people take devices off any particular network without penalty once the devices were fully paid for.

After the formal complaints against AT&T and Verizon were filed, several device makers and other wireless companies voiced similar concerns to the agency about the carriers’ actions around eSIM, four people familiar with the investigation said. The investigation may also include other major American carriers, another person said.

“The actions would limit choice for consumers and harm competition,” said Ferras Vinh, a policy expert at the Center for Democracy and Technology.

In a private meeting of a task force called G.S.M.A. North America this year, AT&T and Verizon pushed for the ability to lock phones to their networks, bypassing the purpose of eSIM technology, said Harold Feld, a senior vice president of Public Knowledge, a nonprofit consumer group, who was briefed on the meeting. Verizon has said it needed to be able to lock down phones to prevent theft and fraud.

“There is a constant problem with industry standards-setting organizations that on the one hand allow the industry to come together for the purpose of efficiency but can be very anticompetitive and operate in secrecy,” Mr. Feld said.

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DealBook Briefing: Did Jeff Bewkes Help Time Warner’s Cause in Court?



William Hejl, a farmer worried by the threat of Chinese tariffs.

Dan Koeck for The New York Times

The timeline for a potential U.S.-China trade war

As the U.S. and China continue to posture over trade — alarming U.S. farmers, many of whom are in key electoral districts in the Midwest — it’s worth noting three upcoming dates, Peter Eavis writes.

On May 1, exemptions to the tariffs on imported steel and aluminum expire.

On May 22, the public comment period ends for another $50 billion worth of tariffs, and the Trump administration can announce a final list of targets.

And Aug. 18 is potentially the deadline for the administration to act on an investigation into Chinese trade practices. But there’s a provision for a 180-day delay after that.

Key caveats: President Trump has the power to pursue trade policy almost at whim. And a W.T.O. proceeding against China could take years.

Elsewhere in trade: How Qualcomm became collateral damage in the fight (China says its takeover of NXP Semiconductors has “hard to resolve” issues), while Washington continues to fret about Chinese tech. Rusal is betting on China for relief from U.S. sanctions. What worries the Fed about trade. And why Wall Street and trading allies increasingly ignore presidential statements.


Assembling a rifle at the Sturm, Ruger & Co. factory.

Eric Thayer/Reuters

Breaking: Amalgamated presses Sturm, Ruger on gun limits

The politically minded bank already adopted principles for limiting firearm sales laid out by the advocacy group Everytown for Gun Safety. Now it’s using its position as a (small) shareholder in Sturm, Ruger to urge the gun maker to adopt six Everytown principles.

Among them: Supporting mandatory background checks for all sales; binding sellers to a code of conduct; and adopting smart-gun tech. If Ruger doesn’t support those principles, Amalgamated would withhold votes for Sandra Froman, a Ruger director who’s also on the N.R.A.’s board.

Elsewhere in gun sales: Dicks’s Sporting Goods plans to destroy its stock of assault-style rifles.

The political flyaround

• Attorney General Eric Schneiderman of New York wants to change state law to allow repeat criminal charges against offenders granted a presidential pardon. An adviser to President Trump warned that Michael Cohen could flip. And meet the judge in his case, Kimba Wood.

• Karen McDougal and the publisher of the National Enquirer have settled. She can now publicly discuss her claim to have had an affair with Mr. Trump, who is spared the risk of legal proceedings. (NYT)

• A resolution demanding that Scott Pruitt quit the E.P.A. attracted signatures from 170 Democratic lawmakers. (The Hill)

• Ted Cruz’s Democratic challenger, Beto O’Rourke, is within 3 points in the latest Quinnipiac poll. (Axios)

• The Senate voted to overturn an Obama-era rule restricting car lenders from discriminating against minorities. (NYT)

• The S.E.C. voted to move ahead with public consultations on a rule requiring brokers to put clients’ “best interest” first. (Bloomberg)

• The rise and fall of the lobbyist Tony Podesta. (WSJ)


Jason Redmond/Agence France-Presse — Getty Images

The most important part of Jeff Bezos’s annual letter

It’s the disclosure that Prime now has over 100 million members. These are Amazon’s stickiest and most valuable customers, who order often and can access its streaming service. The company had $9.72 billion in revenue from subscription services, including Prime fees.

Mr. Bezos also talks about the importance of “high standards” for his digital behemoth. (And about yoga handstands.)

Elsewhere in Amazon: The company is moving its entertainment division to the Culver Studios, where “Raging Bull” and “E.T.” were made.

The tech flyaround

• Facebook is reportedly designing chips, and working to move 1.5 billion users worldwide beyond the reach of European data privacy rules. An Irish watchdog still has qualms about its facial recognition. And ad agencies are seeking substitutes for its hoard of personal data.

• Uber is reportedly in talks to hire VMware’s Zane Rowe as C.F.O., to help prepare an I.P.O. next year. The last of Otto’s founders, Don Burnette, has left Uber.

• Qualcomm has begun cutting about 1,500 jobs. (Bloomberg)

• Intel is closing its wearable tech group. (CNBC)

• Tencent, and others will put $437 million into a unit of the embattled tech conglomerate LeEco. (FT)


Lucas Jackson/Reuters

Goldman’s big task: looking less like the Goldman of old

As the firm moves more into consumer businesses — pushing its Marcus online lending platform, buying Adam Dell’s budget-planning app — it is looking less like a traditional investment bank and trading house and more like a one-stop shop. Like the universal banks JPMorgan Chase, Bank of America and Citigroup.

But the shift carries plenty of risk. “It goes against their history as a firm; they’ve no track record of expanding consumer, commercial or corporate banking,” the analyst Brian Kleinhanzl of KBW told the FT.

Elsewhere in banking: Credit Suisse and UBS are reportedly in talks to combine some of their back-office operations. The activist investor Edward Bramson has built a 5 percent stake in Barclays and wants to wind down its trading division, unnamed sources told the London Evening Standard.


William P. O’Donnell/The New York Times

The deals flyaround

• Bankers for Meredith have reportedly ruled out the National Enquirer owner A.M.I. as a bidder for Time, Fortune, Inc. and Sports Illustrated, rejecting a $300 million offer. (Vanity Fair)

• P.&G. agreed to buy Merck of Germany’s consumer health business for $4.2 billion. (WSJ)

• Total of France agreed to buy Direct Energie, a utility focused on clean energy, for $1.7 billion. (NYT)

• Lloyd Blankfein of Goldman Sachs and Jon Gray of Blackstone butted heads over a potential debt deal at a recent lunch. (Bloomberg)

• The U.K. will reportedly approve Melrose Industries’ bid for GKN. (FT)

• Avenue Capital is reportedly planning a social-impact debt fund. (Reuters)

• Bon-Ton Stores is going out of business. (WSJ)

• Grail, a cancer-detection start-up backed by Jeff Bezos and Bill Gates, is reportedly working to raise $1 billion. RealSelf, an online hub for cosmetic surgery information, has raised $40 million. And Green Bits, which makes software to help cannabis dispensaries stay legal, has raised $17 million from Tiger Global Management and others.

Revolving door

• Cerberus Capital Management has hired the former JPMorgan Chase C.O.O. Matt Zames as president. Frank Bruno, a Cerberus veteran, will become co-C.E.O. alongside Stephen Feinberg. (WSJ)

• Wynn Resorts has added three women to its board: Dee Dee Myers, who was a White House spokeswoman in the Clinton administration; Betsy Atkins, an advocate of stronger corporate governance; and Wendy Webb, a former investor-relations chief for Disney. (Bloomberg)

• Deutsche Bank’s C.O.O., Kim Hammonds, and investor-relations chief, John Andrews, are leaving. (WSJ)

• GlaxoSmithKline has hired Kevin Sin from Genentech as a top internal deal maker. (Reuters)

• Jana Partners has hired Dan Hanson, once of BlackRock, and Pulkit Agarwal, formerly of the International Finance Corporation, to work on its social impact investing fund. (Reuters)

The speed read

• The highest-ranking civil servant in Japan’s Finance Ministry resigned after accusations that he had sexually harassed female journalists. (NYT)

• Starbucks will become a test case for training to combat unconscious bias; its effectiveness is still a matter for debate. (NYT)

• Coastal communities are no longer the only ones suing fossil-fuel companies over the costs of climate change. (NYT)

• Porsche’s headquarters in Germany were raided by the police yesterday as part of an investigation into emissions cheating. (NYT)

• The departing editor of Harper’s Magazine, James Marcus, said he had been fired for opposing the publication of a contrarian essay on #MeToo. The magazine disputes that. (NYT)

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Time Warner C.E.O. Testifies That AT&T Deal Is Needed to Battle Silicon Valley

AT&T’s chief executive, Randall Stephenson, is expected to testify as soon as Thursday, with John Stankey, AT&T’s senior vice president who is poised to run Time Warner after the merger, testifying later on Wednesday. Arguments are expected to close as early as April 30. Judge Richard J. Leon of the United States District Court for the District of Columbia, who is presiding over the case, is expected to take about a month before giving his opinion.


AT&T and Time Warner have argued that it is extremely unusual for the federal government to try to block what is known as a vertical merger, a union of companies that don’t compete directly.

Brandon Thibodeaux for The New York Times

For Mr. Bewkes, 65, the courtroom appearance was a rare public pleading to salvage a career-defining deal. The media titan is a 39-year veteran of Time Warner and has been chief executive since 2008, overseeing the rise of HBO, the spinoff of Time Warner Cable in 2009 and the turbulent evolution of CNN and the Warner Bros. movie studio.

Confident and congenial, Mr. Bewkes engaged directly with Judge Leon, leaning forward in his chair and making eye contact as he explained how the media industry is being challenged by Apple, Amazon, Facebook, Google and Netflix.

Among the biggest problems for Time Warner as a stand-alone television and movie producer is that it does not have access to viewer data to target advertising and other customer information, the same way that Amazon and Netflix do, Mr. Bewkes said.

“We don’t have emails, contact information, billing information … any of these things,” he said.

At the center of the antitrust trial are arguments over consumer and competitive harms, with attention focused on economic analyses presented by both sides last week. The Justice Department and several consumer groups said the deal would hurt consumers, who would have to pay bigger bills as a result of higher prices for Time Warner programs.

The companies have argued that the Justice Department’s lawsuit is at least a decade behind the times. They portray their companies as underdogs struggling to compete against Silicon Valley titans. AT&T and Time Warner also have said it is highly unusual for the federal government to block a so-called vertical merger of companies that don’t directly compete.

Judge Leon has said the action was indeed a “rare breed of horse” but not a “unicorn.”

Mr. Bewkes and Mr. Stephenson have previously suggested that the Justice Department was influenced to block the deal by presidential politics. President Trump said during his election campaign that the deal should be denied. Mr. Trump has also repeatedly bashed CNN, the news network owned by Time Warner, for its coverage of his administration.

The Justice Department has denied any political interference in its suit to block the deal.

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Huawei, Failing to Crack U.S. Market, Signals a Change in Tactics


As the Chinese telecom giant Huawei roars ahead in the rest of the world, roadblocks in Washington have thwarted its attempts to build a presence in the United States.

David Paul Morris/Bloomberg

SHANGHAI — For Huawei’s longstanding efforts to crack the United States market, it’s the end of an era.

Last week, the Chinese telecom giant laid off five American employees, including its top liaison to the United States government, William Plummer, according to people familiar with the matter. Mr. Plummer, who was with the company for almost eight years, became the face of Huawei’s Sisyphean efforts to win over Washington.

Bedeviled by concerns about its close relationship to the Chinese government, Huawei has spent much of the last decade lobbying to be allowed to sell its communications equipment to American telecom carriers. Mr. Plummer emerged as a highly visible representative during a series of congressional hearings in 2012, which resulted in recommendations that American firms not buy the Chinese company’s products.

On his LinkedIn account, Mr. Plummer wrote that he was “in transition.”

A Huawei spokesman said in a statement that any layoffs reflected an effort to better align its resources to support the company’s “business strategy and objectives.”

“Any changes to staffing size or structure are simply a reflection of standard business organization,” he added.

It is not clear whether there will be a replacement for Mr. Plummer, but his removal seems to indicate a change in tactics for Huawei in the United States. The company’s policy operations there are led by a relatively recent arrival, Zhang Ruijun, who took over the position nine months ago after previous postings for Huawei in Mexico and Russia.

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The Week Ahead: AT&T and Time Warner Chiefs to Testify, and New China Tariffs Brew


Randall Stephenson, chief executive of AT&T, left, and Jeffrey Bewkes, chief executive of Time Warner, in 2016. Both men are expected to testify in support of the proposed merger of their two companies, which has been challenged by the Justice Department.

Patrick T. Fallon/Bloomberg

Here’s what to expect in the week ahead:


AT&T and Time Warner C.E.O.s will take the stand.

As the Justice Department’s suit to block AT&T’s merger with Time Warner enters its fifth week, the top executives of both companies will take the stand in federal court. Jeff Bewkes, the chief executive of Time Warner, will go first, followed by Randall Stephenson, the chief executive of AT&T. They are both expected to testify early in the week. The executives will vigorously defend the $85 billion merger, which they say will create a stronger competitor to ascendant streaming video services. The Justice Department is expected to pose tough questions to the executives on how the combined companies could try to raise prices on rival cable and satellite firms — increases that would trickle down to consumers. Cecilia Kang


The I.M.F. and the World Bank discuss the economy.

World leaders will travel to Washington, D.C., for the spring meetings of the International Monetary Fund and the World Bank, which run from Monday through Sunday. The organizations are likely to repeat their message of recent months, cautioning governments to make tough reforms to increase their economic productivity now, while global growth remains strong. They have also urged countries to avoid trade protectionism. Ana Swanson


Bad weather may have cooled sales in March.

The Census Bureau is scheduled to release data on Monday on retail sales in March, providing another marker of the economy’s health and stability. Cold weather across much of the country may have led to a decline in discretionary shopping in March. Sales fell slightly in February, a typically quiet time for shoppers after the holiday rush. Michael Corkery


More big banks will report first-quarter earnings.

Bank earnings reports continue next week, with Bank of America reporting first quarter results on Monday, followed by Goldman Sachs on Tuesday and Morgan Stanley on Wednesday. Each could see a boost from recent stock market volatility, but a breakout performance on loan or deposit growth would be a surprise. Emily Flitter


High court hears arguments on taxing online retailers.

Internet retailers will face a reckoning at the Supreme Court on Tuesday, when the justices hear arguments about whether to reconsider a 1992 ruling that helped spur the rise of online shopping. That decision barred states from forcing companies to collect sales taxes if they do not have a local physical presence. Some justices have signaled that they are ready to overrule the decision, which costs states billions in tax revenues and puts brick-and-mortar stores at a competitive disadvantage. Adam Liptak


President Trump and Prime Minister Abe meet at Mar-a-Lago.

President Trump will host Prime Minister Shinzo Abe of Japan for two days at Mr. Trump’s Florida estate starting Tuesday. While Mr. Abe has spoken with Mr. Trump more than any other foreign leader, the president’s decision not to exclude Japan from tariffs on steel and aluminum has strained their relationship. Both American and Japanese officials expect Mr. Abe to confront the president on trade, which may include a conversation about Mr. Trump’s recent announcement that he would consider rejoining the Trans-Pacific Partnership. Also on the table are Mr. Trump’s plans to meet with North Korea’s leader, Kim Jong-un, a decision that stunned Mr. Abe. Will Dudding

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Quirks and Gossip in a Corporate Cellphone Branch

Michael Carr, a 65-year-old handyman, wandered in and sat on a stool near the service desk. He was there only to talk. “Ari’s got respect for the older heads,” he said in an accent part Dutch and part West Indian. “He’ll tell them: ‘This phone is not for you. You can’t handle it at this age.’”

The store phone rang. “AT&T,” said Mr. Kirtchuk. “Yes, yes, you can bring it over. The SIM card is $10. But do you need internet? For an additional $10 you get 1G of data.”

He hung up. “People are used to a 1-2-3 situation. When they get extra service, they’re surprised. I’m not a diamond but I look like a diamond because of my competition.”

There are two other AT&T retailers within a mile of his, one part of a large chain and the other owned by an individual. (There are also several other cellphone franchises in proximity.) Mr. Kirtchuk explained that authorized retailers are independent contractors that compete with one another, unlike, say, two branches of one clothing chain. They make commissions on each new activation or upgrade, based on the value of the transaction. The commission on a new activation is higher than that on a phone upgrade. “The AT&T competition I can control with my customer service,” said he said. “Competition with Verizon is not under my control.” (AT&T did not respond to requests for comment on this article.)

Born in Argentina, Mr. Kirtchuk moved to Israel with his family when he was 3. He arrived in the United States in the late 1980s, when he was in his early 20s. He thought he would work, save some money, and return to Israel to study. He got a job in a clothing store in the South Bronx, and in 1988 he met the woman who would become his wife. They married, had two sons, and moved to Richmond Hill, Queens. A few years later Mr. Kirtchuk dropped his plans to return to Israel.

A job in an electronics store led him to open his own business selling and servicing pagers in 1990, and as technology changed, he opened a series of cellphone dealerships. Soon he owned four in Queens. “I was looking for stores all the time,” he said recently. “I thought I could grab the world.”

One day in 2003 he was driving down Seventh Avenue in Park Slope, looking for future locations. “I thought to myself, ‘Nice area,’” he recalled. “I went to the landlord, and half an hour later I signed the lease.” After his divorce, he closed all his Queens stores within a few years and installed himself full-time in Park Slope. Even today, he said, several former Richmond Hill customers travel nearly nine miles to see him.

On a different weekday he was aiding a married couple, Arta Ukha, 32, and her husband, Ari Nikci, 37, who had come in for new phones. Mr. Kirtchuk’s mind was on the stock market. “If the stocks are down two days in a row,” he said, “maybe Wall Street knows something we don’t. Maybe Trump is on his way out.”

Mr. Rossello was on the store phone. “I can’t understand what you’re saying,” he told the caller.

Mr. Kirtchuk took the phone and spoke briefly in Spanish, including the words “Apple ID” and “teléfono.” Mr. Kirtchuk switches from English to Spanish to Hebrew, sometimes shocking customers who don’t expect the guy at the cellphone store to be multilingual.


Eggplant, Mr. Kirtchuk’s dog, pictured, is sometimes on the scene. So is Polo, Mr. Kirtchuk’s son’s dog.

Todd Heisler/The New York Times

A discussion ensued on different accents. Ms. Ukha, originally from Kosovo, explained the challenges of helping her parents set up a smartphone. “In Albania the words are pronounced the way they’re written,” she said. “I have to tell my parents, ‘Press DO-neh’ instead of ‘DONE.’”

A pizza delivery man came in and handed Mr. Kirtchuk his phone, leaving within a few minutes. “He just needed to wipe it,” Mr. Kirtchuk explained. “He lost his password.” He was philosophical about life as an authorized retailer. “If you take care of your customers, you’re going to make a few dollars out of it. The money will follow. I represent a big corporation, but they allow me to work in an old-fashioned way, to find a balance between making them happy and doing what I want.”

What about the unpleasant customers? “I recognize them right away,” he said. “I’ll try to encourage them to go to my competition.”

He often learns about people’s problems as he helps them with their phones. Several months ago a regular, close to tears, came in and asked to pull up her husband’s text messages for her. “She said, ‘I think he has something going on,’” Mr. Kirtchuk recalled. “I told her, ‘First of all, I can’t do that, and even if I could, I wouldn’t.’ I told her to wait 24 hours and cool down to think about it. Maybe she was jumping to conclusions.”

Later on the hectic Friday of the Jewish prayer ritual, the door burst open and Yanki Reichman, 56, who wore a prayer shawl beneath a TrueValue Hardware hoodie, went to Mr. Kirtchuk, joking with him in Hebrew. He stops in the store on his trips to the bank, often bringing Jewish delicacies from Crown Heights.

The chiropractor, Mr. Rossel, who had come in to buy his first smartphone, waited for it to be activated. “Phones bring people into the store,” he observed. “Because they are a capitalistic pursuit they require updates. Since Ari put those chairs here there’s always people sitting in them. This is the new barbershop.”

“AT&T is a franchise that swallowed all the smaller ones,” said Mr. Reichman, “but without Ari, people would get lost. He spends hours and hours trying to help them and he doesn’t get paid for it.”

Mr. Rossello, the full-time employee, asked Mr. Rossel a series of security questions as he set up the device, like his mother’s maiden name or the city he was born in. “Why don’t you have it ask your dream job?” Mr. Kirtchuk interrupted. “Belly dancer? My dream job was always to be a belly dancer.”

A tall young man with broad shoulders came in. He carried a gym bag and lingered near the door. “It’s your lucky day, Ari,” he said in a strong Southern accent. “I have a hundred dollars in here.”

“Why didn’t you bring me a thousand?” Mr. Kirtchuk asked.

The man was Jonathan Jones, 33, a clothing designer, author and investor who works at the Whole Foods in Gowanus. He moved to New York from Vicksburg, Miss., six months ago and met Mr. Kirtchuk after coming into the store offering his web-building services. They became friendly.

On this afternoon he had a loose battery. Mr. Kirtchuk placed a call to a roving repairman and turned to Mr. Jones. “Jonathan, 5:30 is good for you?” “Aw, man,” said Mr. Jones. “Now is good.” But he agreed to return at 5:30.

A woman who resembled Laurie Anderson, with a distraught face under her parka hood, came in and announced dramatically, “I lost my phone.”

“You have insurance?”


“All right,” Mr. Kirtchuk said. “Gimme a second.” They spoke quietly. After typing her number into the computer he determined that she did, in fact, have insurance. She left, and returned 10 minutes with two cups of coffee, one for Mr. Kirtchuk. “Good coffee,” he said.

They approached a display phone together, and an intense, guitar-heavy folk song emanated from the store speakers. It turned out to be a music video by her husband, also a customer. Mr. Kirtchuk complimented the music while he helped her set up a new phone, which would arrive in the mail. (Days later she would find her lost phone.)

As afternoon turned to evening, a redheaded young woman came in and told Mr. Rossello she was a Verizon customer, asking him detailed questions about AT&T plans, including the number of gigabytes and international-calling details. Mr. Kirtchuk approached her and said she could switch, explaining how much she would save on a similar AT&T plan and handing her a business card. It seemed uncharacteristically aggressive; he prefers a soft sell. She said she would think about it. “When you’re ready,” Mr. Kirtchuk said.

She paused to pet Polo, remarking on his calm demeanor. After the door closed behind her Mr. Kirtchuk said, “I think she was a secret shopper, sent by AT&T to check on things.” When asked why he said, “She knew too much.”

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AT&T Would Use Time Warner as a ‘Weapon,’ Justice Dept. Says

“The government’s theory is fundamentally stuck in the past,” said Daniel Petrocelli, the lead lawyer for AT&T and Time Warner. He said the merger would do the opposite of what the government asserts: The company would have no incentive to withhold Turner channels, which are owned by Time Warner.


Mr. Stephenson leaving the federal courthouse on Thursday. The Justice Department argues that AT&T would charge its rivals more money for Time Warner content if the merger were approved.

Jose Luis Magana/Associated Press

“It would be financially ruinous if Turner were not as widely distributed as possible,” Mr. Petrocelli said.

The opening statements previewed the fierce legal battle that will play out before Judge Richard Leon of the United States District Court for the District of Columbia. His decision in the case will help set the direction for antitrust law for years to come. It will also frame the shape of the media industry, which is facing major shifts as more people move from cable television to viewing streaming entertainment over the internet.

Hundreds of company officials, reporters, hedge fund investors, antitrust scholars and industry analysts stood in line for hours to get a seat at the trial. Randall Stephenson, AT&T’s chief executive, and Jeffrey Bewkes, Time Warner’s chief executive, sat together during the 90 minutes of opening remarks. Makan Delrahim, the Justice Department’s top antitrust official, watched from the front row on the other side of the room. The chief executives and Mr. Delrahim did not interact.

The case has drawn unusual public attention partly because of questions about whether it had a tinge of political interference. The Justice Department’s opposition came as a surprise when it was announced in November, and AT&T suggested it had been instigated by President Trump, who has said that he opposed the deal. The government said that Mr. Trump did not communicate with antitrust officials on the deal and that their decision to oppose the merger had not been ordered by the White House.

Judge Leon has rejected many of AT&T’s efforts to introduce evidence about political interference into the case. Instead, the trial, which is expected to last six to eight weeks, will largely focus on fundamental principles of antitrust law: whether the merger would cause prices to increase and competition to decrease.

The court’s decision will determine what sort of media mergers will be permitted between the creators and the distributors of content. Such deals, called “vertical mergers,” generally pass regulatory scrutiny because they don’t make a company dominant in one specific market area. Judge Leon has noted the unusual case is like a “rare horse” but not a “unicorn.”

Blair Levin, an analyst for New Street Research, a firm focused on the telecommunications industry, wrote in a research note that a Justice Department victory would “set a standard for what constitutes substantial harm that would call into question a number of other potential and pending mergers.”

About 60 witnesses are expected to take the stand over the course of the trial, including Mr. Stephenson of AT&T and Mr. Bewkes of Time Warner, and executives from digital services like SlingTV and YouTube.

The Justice Department said it would present internal documents from Time Warner and AT&T to show that the merged company would have the incentive to raise prices on rivals and consumers. In one email Mr. Conrath mentioned on Thursday, a Turner executive explained how Dish TV, AT&T’s top rival in satellite TV service, would be weakened without his company’s channels.

“Time Warner,” Mr. Conrath said, “would be a weapon for AT&T because AT&T’s competitors need Time Warner programming.” The government said consumers would have to pay an extra $436 million a year because of the deal.

Mr. Petrocelli foreshadowed a plan to attack that economic analysis. He said the Justice Department’s calculations, made by the antitrust economist Carl Shapiro, had omitted key information and were therefore flawed.

Mr. Petrocelli promised to show Judge Leon that cable consumers could end up paying about 50 cents less a month if the deal goes through.

“This is what I call the government’s shrinking case,” he said.

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Streaming Soon: A Fight Over AT&T, Time Warner, and the Future of TV

The Justice Department’s move to block the deal in November took Wall Street and the entertainment industry by surprise. Many executives and lawyers thought President Trump’s administration would usher in a hands-off approach to antitrust enforcement, despite Mr. Trump’s criticism of the deal on the campaign trail.


Makan Delrahim, assistant attorney general in the antitrust division of the Justice Department. The department demanded the sale of certain assets before it would approve a merger of AT&T and Time Warner.

Stephen Voss for The New York Times

Instead, the Justice Department, under its antitrust chief Makan Delrahim, moved aggressively, demanding the sale of major parts of the businesses before a deal could go through. AT&T responded by suggesting that Mr. Delrahim’s decision was politically motivated and not based on established antitrust law.

In recent weeks, though, the judge overseeing the case, Richard Leon of the United States District Court of the District of Columbia, has rejected moves by AT&T to inject politics into the arguments.

Unless the two sides settle — and there have been no signs of that happening — the trial is expected to showcase two starkly different visions of the country’s video future. Drama is also in the cards: Executives from AT&T and Time Warner, as well as competing cable, satellite, tech and media firms, are expected to take the stand over the course of several weeks — and possibly reveal details about the inner workings of the industry.

The Justice Department argues that the merged company’s combination of distribution and content would give it too much leverage in negotiations with the rest of the industry. It also says that the new company would demand higher licensing fees from other cable and satellite firms for what the government calls “must-watch” programming. Those higher charges would immediately trickle down to consumers at an estimated cost of 45 cents a month, or a combined $436 million annually for cable and satellite subscribers, the agency said.

The government’s case will be led by Craig Conrath, a plain-spoken and longtime litigator who has worked on merger cases for several administrations. He is expected to argue that if the merger is approved, AT&T and Comcast, a corporation that owns distribution and programming — the same combination that AT&T is seeking — would have the incentive to raise prices for access to their shows. That would hurt other cable companies and online streaming businesses.

Judge Leon oversaw the final approval of Comcast’s merger with NBC Universal in 2011, the deal that added programming to Comcast’s holdings.

“Either important video content will be available through a competitive market to all distributors, including up-and-coming innovators,” the Justice Department said in pretrial filings with the court. “Or it will likely only be available through vertically integrated, well-funded silos.”


Time Warner’s cable and movie holdings would be paired with AT&T’s mobile and satellite distribution networks to create an entertainment giant.

An Rong Xu for The New York Times

AT&T scoffs at the government’s predictions of price increases. And even if the analysis is accurate, the company has said, it would amount to the price of a fancy cup of coffee for each consumer. Contrary to the government’s theory that it would withhold content, AT&T says it wants to make sure its shows and movies are as widely distributed as possible.

Leading AT&T’s defense is Daniel Petrocelli, a Los Angeles-based lawyer with a long track record in high-profile cases but not someone who is considered an antitrust expert. Two decades ago, he won a wrongful death case against O. J. Simpson on behalf of the family of Ron Goldman. In 2006, he lost a case defending Jeffrey Skilling, the chief executive of Enron, of fraud and conspiracy.

Mr. Petrocelli is expected to argue that the government is missing the bigger picture. AT&T says that Silicon Valley companies like Netflix, Amazon, and Google have disrupted the entertainment industry by spending billions of dollars a year on original content and pushing the programming through their own distribution systems. Facebook and Google dominate the market for advertisements that run with those videos.

AT&T argues that a merger with Time Warner would add a new competitor against those giants, instead of reducing competition. AT&T will also promise to work out any contract disputes with cable and satellite companies through a third-party arbitrator, he is expected to argue.

“The new video revolution is defined by the spectacular rise of Netflix, Amazon, Google and other vertically integrated, direct-to-consumer technology companies,” AT&T said in its pretrial brief.

The merger is opposed by several Democratic lawmakers and many consumer groups, who say that AT&T’s control of more than 100 million mobile phone subscriptions gives it unparalleled power. Google, Facebook and Netflix, though mighty, don’t own the pipes that connect people to the internet, they say.

Streaming competition is the “best hope consumers have, but network operators will kill that competition if they are not stopped,” said Mark Cooper, the director of research at the Consumer Federation of America.

Many Wall Street analysts, however, say the government’s intervention in the deal will eventually harm consumers, because it will limit true competitors to the big tech companies.

“The government is about three years behind reality and is defining the marketplace as it was about three years ago,” said Laura Martin, an analyst at Needham & Company.

AT&T had asked for detailed communications logs between the White House and Justice Department staff members, including Mr. Delrahim, a former Trump White House lawyer. Judge Leon rejected those demands, and AT&T ultimately decided to exclude its concerns of potential presidential interference — which it described as “selective enforcement” — from the case.

But even without arguments of political interference entering the trial, many on Wall Street will be looking for clues about the kinds of corporate deals that will pass muster during the Trump administration.

The decision to block a merger between companies that don’t directly compete is rare. Mr. Delrahim has said that one of the common regulatory remedies to prevent anticompetitive behavior in such deals — getting companies to promise they’ll be on their best behavior — is not effective.

That view may ripple across merger and acquisition plans in other sectors, including the drugstore chain CVS’s $69 billion bid for the health insurance provider Aetna — as well as proposed media deals like Disney’s acquisition of Fox and Sinclair Broadcasting’s purchase of Tribune Media. Wall Street analysts expect the results of the trial will determine if more telecom and entertainment companies will pursue ambitious vertical mergers.

“This could direct the future path of the industry,” said Steven Salop, a professor of economics and law at Georgetown University Law School. “If it is permitted, vertical integration will continue.”

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The Future of Time Warner, Coming Soon to a Court Near You

The media industry has undergone significant change since the blockbuster deal was announced in October 2016.

Rupert Murdoch, who pursued Time Warner just three and a half years ago, has gone from buyer to seller, and made a deal to hand over much of his 21st Century Fox empire to Disney for $52 billion. Discovery made a bid and has now closed on an $11.9 billion deal for Scripps Networks Interactive, the home of cable channels like HGTV and Food Network. Viacom and CBS Corporation are exploring the possibility of joining once more.

All the while, digital rivals keep tossing money around.

Netflix is now spending up to $8 billion a year on content, up from $6 billion in 2016. Its free cash flow could balloon to negative $4 billion this year but its market value has skyrocketed to $139 billion from roughly $54 billion since the Time Warner-AT&T deal was announced.

Apple is competing directly with HBO, TBS and TNT by pouring what will soon be in excess of $1 billion into original programming, building relationships with Hollywood stars like Reese Witherspoon, Kristen Wiig, M. Night Shyamalan and Steven Spielberg. Amazon has appointed a new leader, and Hulu is beginning to find its sea legs. And even Facebook and Google’s YouTube are offering Hollywood tens of millions of dollars to buy up original content.


HBO continues to be a juggernaut for Time Warner, producing hit shows like “Westworld” and “Game of Thrones” (above).

Helen Sloan/HBO

And while Netflix, Amazon, Facebook, Google and Apple have opened their wallets, Time Warner has been sitting on the sidelines.

“It’s bad in the sense that that’s a lost year and a half from business planning perspective,” said Brian Wieser, a senior analyst at Pivotal.

A Time Warner spokesman said the company was “confident they would prevail at trial.” He would not speculate on what would happen should the judge, Richard Leon of the United States District Court of the District of Columbia, rule for the government.

The Justice Department argues that since AT&T has such a wide distribution network (it owns DirecTV), a deal could spell disaster for consumers. AT&T has countered that costs for consumers would likely go down.

Though Time Warner has been in a state of limbo for the last 18 months, analysts agree that its core businesses have been performing well.

“The wheels certainly haven’t fallen off,” Mr. Wieser said.

And while some think the deal being blocked will scare off potential suitors, there are many analysts who are convinced that Time Warner is too attractive to sit alone for long. For example, could HBO and Warner Bros. be sliced off and sold to companies like Apple or Amazon? The networks TNT and TBS to an entity like Viacom?

“If there is a demand for other media assets, there is nothing on the scale of Time Warner anymore,” said Kannan Venkateshwar, an analyst at Barclays Capital. “That gives it a scarcity value.”

Mr. Venkateshwar also pointed out that Time Warner would benefit from the new tax law, which would give the company even more runway if it has to go another year or two by itself.

Another analyst, Amy Yong, at Macquarie Group, said: “You can’t really dismiss how powerful HBO is. And Warner Bros. the studio. And, even to some extent, Turner and CNN. These are great consumer brands.”

HBO continues to be a juggernaut, producing hit shows like “Westworld” (which returns next month) and “Game of Thrones.” The network’s annual revenues now exceed $6 billion. It also now has five million digital subscribers, proving that it has made a steady transition into the over-the-top world.


In one of media’s major changes, Rupert Murdoch, who pursued Time Warner three and a half years ago, has gone from buyer to seller. He made a deal to hand over much of his 21st Century Fox empire to Disney for $52 billion.

Cameron Spencer/Getty Images

Warner Bros., propelled by the blockbusters “Wonder Woman” and “It,” had a strong year at the box office, and the studio had revenues of nearly $14 billion. And since Donald J. Trump announced his presidential run nearly three years ago, CNN has set ratings records.

Still, HBO’s longtime spot in the pole position of the television industry isn’t so certain. In 2015, Netflix had 92 fewer Emmy nominations than HBO. Last year, the gap was just 20. Netflix and Amazon now spend more on content than HBO, and it could simply be a matter of time before Apple does as well. Indeed, HBO executives now speak about the network more as a high-end boutique — curators of content, they like to say — than as the free-spending New York Yankees of the industry.

Warner Bros., among its slate of hits, also had several misfires, like “Justice League” and “King Arthur: Legend of the Sword.”

And though CNN’s revenues have grown, it hasn’t been at the rate of MSNBC and Fox News, which draw more viewers in prime time. TBS and TNT, and Turner’s slate of cable channels, continue to experience ratings declines as more consumers cut the cord.

Nevertheless, the research firm MoffettNathanson has told investors that Time Warner’s upside “has been overlooked because it is tied up in deal hell.”

The firm believes that if the AT&T acquisition falls apart, Time Warner could be split up and sold to the highest bidder — and perhaps even thrive as a result.

“The separation of Time Warner would likely draw two distinct sets of bidders into the marketplace,” it told investors. “On the content side, we would expect to see interest from current film entertainment competitors like Sony and CBS/Viacom and even new scripted digital entrants like Apple or Amazon. As for Turner, we would think there would be interest from existing cable network operators like Viacom or Discovery.”

But what would the ripples be if the deal collapses?

“Let’s just say they also block the Fox-Disney acquisition for some reason, that would all of a sudden make you go, ‘Oh, there’s actually an active effort to restrain the size of business,’” Mr. Wieser said. “That’d have an effect on all industries, not just media.”

Most analysts regard that outcome — both the AT&T-Time Warner and Fox-Disney deals being blocked — as unlikely, but the question becomes far more existential for Time Warner and its direct peers if the AT&T deal goes down. If they aren’t allowed to scale up to compete with Silicon Valley, how long could they be around?

“You suddenly have, from scratch, for the last six or eight years, $15 billion being spent by Amazon or Netflix,” Mr. Zaslav, the Discovery chief executive, said. “That could soon be $20 or $25 billion. It’s important for the ecosystem to not allow these transformers to turn out the lights on all these important creative businesses.”

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