Time Warner Inc.'s executives and board were so sure their planned merger with AT&T Inc. would sail through that they asked for very little money in the event it didn't. Now they may be wishing they could rewind the clock 17 months.
The companies head to court on Monday to begin the process of defending their $109 billion transaction. If successful, it will give AT&T -- the No. 2 U.S. wireless carrier -- control of popular TV networks such as HBO and TBS, as well as the Warner Bros. film studio. The Justice Department opposes the deal on the grounds that it will hurt competition and that, in turn, will lead to higher costs for consumers. It's a legitimate concern, especially considering that this merger has already inspired other leaders in the media and communications industries to explore their own tie-ups. Its passage could make subsequent deals difficult to block (including vertical megadeals in other industries such as health care), and so begins a cycle of consolidation that puts more power in fewer hands.