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By Brent Kendall and Drew FitzGerald 

WASHINGTON -- AT&T Inc. Chief Executive Randall Stephenson began his eagerly awaited testimony in court Thursday in defense of his company's proposed Time Warner Inc. acquisition, calling it a "vision deal" that was crucial for AT&T to compete in a rapidly shifting digital-media landscape.

Time Warner "met all the needs we were looking for," Mr. Stephenson told U.S. District Judge Richard Leon, who is deciding whether to allow the $85 billion transaction.

The AT&T chief took the witness stand shortly after noon in a dark suit and blue tie, explaining his long history with the company and how he came to believe that AT&T, with its wireless and satellite assets, needed to own a media company like Time Warner, which owns the Turner networks, HBO and Warner Bros. studios.

Mr. Stephenson said AT&T was focused on growing so it could compete for advertising dollars with technology giants like Amazon.com Inc., Facebook Inc. and Google owner Alphabet Inc., rather than the traditional TV providers that vie for its customers today.

The digital giants have become masters of keeping customers engaged on their platforms, including through the use or premium video, and AT&T wants to do the same, Mr. Stephenson said. To do that, "we need to own content," he said.

The CEO in his early testimony didn't directly address the Justice Department's antitrust claims against the merger, but he did implicitly push back on some of the government's arguments, including that AT&T, which owns DirecTV, might threaten to withhold the Turner Networks from rival pay-TV distributors like Dish Network Corp. or Charter Communications Inc.

Mr. Stephenson said wide distribution was key to Time Warner's success. "The value of a content company is a function of how many people watch it. Period," he said.

The Justice Department will get a chance to cross-examine Mr. Stephenson later in the afternoon.

The AT&T head is the final witness the companies are putting on the stand in the case. The trial, which began in mid-March, could wrap up next week. Judge Leon's decision isn't expected for several more weeks.

(END) Dow Jones Newswires

April 19, 2018 14:55 ET (18:55 GMT)

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