During the early days of President Donald Trump's tenure in the White House, his Justice Department sparked a significant stir in the media sector by initiating a lawsuit to prevent AT&T from acquiring Time Warner, the parent company. This unprecedented move sparked widespread speculation that the legal action was, at least in part, motivated by a desire to retaliate against Time Warner for its critical coverage of the Trump administration. Despite the lawsuit's eventual failure and the completion of the merger, the damage had already been inflicted.

The legal battle initiated by the Trump administration consumed valuable time for AT&T in an era of rapid media evolution, contributing to the merger's downfall. Now, as Trump returns to power, the media industry, which is already grappling with challenges, seems poised for another wave of mergers and acquisitions. His administration will have numerous opportunities to impede or even halt future deals—potential lifelines that some media companies may desperately need to stay afloat.

A prime example is Comcast's recent announcement of its intention to separate MSNBC, CNBC, and other cable assets into a distinct entity from the NBC broadcasting network. While the separation itself does not necessitate approval from the Department of Justice (DOJ) or the Federal Communications Commission (FCC), it is widely anticipated that the newly formed company will require a strategic partnership to navigate the era of cord-cutting.

This presents Trump-appointed regulators with the chance to exert influence over networks that have had long-standing conflicts with the president. "Among media entities, there are only two that Donald Trump has a stronger aversion to than others: MSNBC and NBC," remarked Craig Moffett, a seasoned media analyst and founder of MoffettNathanson, in a telephone conversation.

The media industry's eyebrows were raised this week when Brendan Carr, Trump's nominee to head the FCC, connected the agency's review of the Skydance-Paramount deal to a "60 Minutes" interview featuring Vice President Kamala Harris. Carr informed Fox News that the FCC intends to scrutinize the transcripts from the "60 Minutes" interview as part of its evaluation of Skydance's proposed merger with Paramount, owned by CBS. "This is highly revealing. It suggests that media outlets typically labeled as liberal may encounter significant difficulties in executing deals," Moffett stated.

Jeffrey Sonnenfeld, the founder and president of the Yale Chief Executive Leadership Institute, expressed  that the potential for a "smart reorganization" of media businesses is being overshadowed by the incoming Trump administration. Sonnenfeld suggested that Trump's "blatant vindictiveness" could lead officials to deliberately delay deals to diminish their value for "revenge," even if those deals ultimately succeed in court.

Sonnenfeld contended that this was precisely the case with the AT&T-Time Warner deal. "They dragged their feet. AT&T ultimately emerged victorious, but it was a hollow win. They missed a window. The deal turned sour," he said. Gaetz and Vance are admirers of Biden's antitrust enforcer. Trump's victory initially sparked a celebration among Wall Street dealmakers, with many celebrating the end of the Biden administration's rigorous antitrust scrutiny.

It is true that analysts anticipate the Trump administration to generally be less antagonistic towards mergers. Trump is likely to replace the Biden administration's formidable antitrust enforcer, Federal Trade Commission Chair Lina Khan. However, it is also true that some Republicans— including some slated to join the Trump administration—have been dubbed "Khanservatives" because they have advocated for stricter, not laxer, antitrust oversight.

In February, Vice President-elect JD Vance stated that Khan is "one of the few individuals in the Biden administration that I believe is performing a commendable job." Trump intended to lead the DOJ with another Khan admirer: former Florida congressman Matt Gaetz. Earlier this year, Gaetz told NOTUS that the FCC chair's work "inspired me" and he expressed his hope that she remains in power under a Trump administration. Gaetz announced on Thursday afternoon that he is withdrawing from consideration as Trump's nominee for attorney general, a decision that came amidst increasing scrutiny over allegations of sexual misconduct.

As Gaetz fought earlier this week to survive a challenging nomination process, Comcast dropped a bombshell in the media industry by spinning off MSNBC, CNBC, USA, Oxygen, and other networks. Brian Roberts, the CEO of Comcast, stated on Wednesday that the new company will be "highly appealing to investors, content creators, distributors, and potential partners." Comcast promises that the new entity, currently known as SpinCo, will begin with a growth trajectory and substantial financial resources. However, there is already speculation that it may need to expand to survive. This could entail a sale to another entity or an acquisition.

In either case, a future deal would likely require approval from the DOJ and other Trump regulators. (The FCC's approval may not be necessary because SpinCo will not include the NBC broadcasting network). Separated from the Comcast mothership and its stable cash flows, the spun-off cable channels will have less financial protection from the volatility of the TV industry, not to mention less of a shield from the Trump administration.

"This will be an intriguing experiment," said Frank Louthan, an analyst at Raymond James. "In theory, they should be able to survive if they are adequately capitalized. But it's unclear. It will definitely be a challenge for them." One significant obstacle for Comcast's spun-off cable assets is that they will need to negotiate new agreements to distribute content without being part of the larger NBC bundle—during a time of aggressive cord-cutting. "If this was an easy task, we would have already witnessed it happening," said Louthan. "My guess is that over the medium term, they will either engage in an acquisition or be acquired."

However, Louthan argued that a deal would not be imminent because the spinoff will take a year to complete, suggesting that a transaction may not occur until after the end of Trump's term. Lee Petro, a member of the law firm Dickinson Wright's Washington DC office, said it's "definitely possible" that the DOJ reviews a future deal involving the spun-off cable channels "to inflict pain" on those networks. "It's difficult not to view the spinoff of CNBC and MSNBC as potentially a response to the new administration," said Petro. A source familiar with the matter stated that the company had been evaluating the potential transaction for some time, well before the change in administration. The Trump transition team did not immediately respond to a request for comment.