T AT&T Inc

By Keach Hagey and John McKinnon 

Time Warner Inc. agreed to sell its Atlanta television station to Meredith Corp. for $70 million, removing a significant factor that could have prompted the Federal Communications Commission to review Time Warner's $85 billion sale to AT&T Inc.

The FCC's new chairman, Ajit Pai, hasn't yet said whether he plans to have the agency review AT&T's acquisition and declined to comment on what impact the Atlanta station sale might have on any possible FCC review.

"This [sale] is news to me, so it will not surprise you if I don't express an opinion about it on the fly," he said Thursday at a press conference following the FCC's monthly meeting.

Investors are closely monitoring whether the blockbuster merger will be subject to FCC review because such an examination would be broader and possibly tougher than the Justice Department's expected antitrust review.

The station sale was announced Thursday in a filing with the FCC, which has the right to review any transfers of television-station licenses and evaluate whether such deals are in the public interest. The Atlanta station, WPCH, is Time Warner's only broadcast television station. Formerly named WTBS, it was the station that Ted Turner turned into a national "superstation" and that he used to build out national cable empire Turner Broadcasting, which is now a unit of Time Warner.

"We're pleased to add WPCH-TV, a station with a rich history, to the Meredith portfolio," Meredith Local Media Group President Paul Karpowicz said in a statement.

From Time Warner's perspective, "this is a very small deal that helps remove a big overhang for the pending" deal with AT&T, wrote Marci Ryvicker, an analyst at Wells Fargo. "It means one less issue for the FCC to review, specifically the transfer of WPCH's license" to AT&T.

Time Warner has dozens of other FCC licenses, having to do with things such as satellite-uplink technology, but Time Warner executives have said they don't believe these need to be transferred to AT&T because of technological advances since the licenses were given out.

Time Warner and AT&T filed statements last month saying: "While subject to change, it is currently anticipated that Time Warner will not need to transfer any of its FCC licenses to AT&T in order to continue to conduct its business operations after the closing of the transaction."

Executives from both companies have said they expect the deal to close this year.

President Donald Trump, while still a candidate, vowed to block the deal, saying, "AT&T is buying Time Warner, and thus CNN, a deal we will not approve in my administration because it's too much concentration of power in the hands of two few."

Meredith said it has been running the day-to-day operations of the station -- including advertising sales, marketing and technical operations -- since 2011. Meredith already owns another station in Atlanta, the CBS affiliate WGCL-TV, so the purchase will give them the efficiencies of scale of a "duopoly," according to Ms. Ryvicker at Wells Fargo. She expects the station to maintain its TBS affiliation.

Meredith said it expects the station deal to close by June 30.

--Jeffrey A. Trachtenberg and Tom Gryta contributed to this article.

Write to Keach Hagey at keach.hagey@wsj.com and John McKinnon at john.mckinnon@wsj.com

(END) Dow Jones Newswires

February 23, 2017 18:41 ET (23:41 GMT)

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