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Disney attacks AOL-AT&T
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September 11, 2001: 6:14 a.m. ET
Disney reportedly wants content units divested if cable deal reached
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NEW YORK (CNNfn) - Walt Disney Co. will oppose any combination of the cable TV businesses of AOL Time Warner Inc. and AT&T Corp. unless the merged operation sells all of its content holdings, a newspaper reported Tuesday.
The Wall Street Journal, quoting Preston Padden, Disney's chief lobbyist in Washington, said the combined operation would have too much control over what Americans see, read and hear.
Padden, who opposed AOL's (AOL: Research, Estimates) earlier merger with Time Warner, said Disney would ask regulators to force the combined operation to shed content holdings such as Warner Bros. movie studio and cable channels CNN and TBS. AOL is also the parent of CNNfn.
"Any meaningful increase from the current levels of concentration of ownership among cable and satellite companies raises significant concerns, because it would place too much control in the hands of a single entity," Padden was quoted as saying. "I would therefore propose that the ownership of that distribution be separated from the ownership of the entertainment, sports, and information programming services."
AT&T declined to comment while AOL officials were not immediately available, the report said.
A merger of the two companies' cable operations would create a company serving about 25 million customers, nearly a third of the nation's cable market -- or roughly three times the size of Comcast Corp. (CMCSK: Research, Estimates), the next-biggest cable operator, the article said.
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Disney (DIS: Research, Estimates), apparently seeking to stop AT&T's (T: Research, Estimates) cable assets from going to AOL, is itself considering a deal with the long-distance and cable company, the report said, quoting people familiar with the situation.
Disney, of Burbank, Calif., is discussing investing $4 billion in AT&T, which also would receive funds from Microsoft Corp. (MSFT: Research, Estimates), the report said. AT&T would use the money to keep its cable operations intact and take them public, it added.
AOL Time Warner stock rose $2.13 to $34.41 Monday. AT&T fell 5 cents to $17.65, Microsoft added $2.18 to $57.58, Disney dropped 53 cents to $23.58 and Comcast lost 81 cents to $34.48. 
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