Fox's stock jumped 7% in after-hours trading, and Disney's fell modestly amid predictions that Comcast, emboldened by the AT&T ruling, would make an aggressive bid for most of Fox's assets. That could lead to less competition and higher prices for consumers.
The two then had a long lunch in the Time Warner dining room in NY and agreed that their industries were under siege.
The acquisition means AT&T will be the nation's top pay-TV distributor.
AT&T would use its leverage over the must-have shows, in particular HBO's Game of Thrones or National Basketball Association games on TNT, to charge Comcast or Verizon more than it would charge itself for distributing Time Warner channels, giving itself a competitive advantage, the government claimed. Time Warner shares are up about 5% at $100.91.
Judge Richard Leon said the U.S. government failed to meet the burden of proof that the tie up between the largest USA pay TV operator and media entertainment giant Time Warner would harm competition.
AT&T claims that with a purchase of Time Warner, they'll be able to compete in the grand scheme of internet and TV into the future.
The decision by the Justice Department to sue to block the merger caught AT&T and many others in the media industry by surprise.
Seeing as a merger between 21st Century Fox and The Walt Disney Company would allow Marvel Studios unrestricted access to the characters mentioned above, the amalgamation has piqued the interest of MCU devotees hoping to observe a crossover between the mutant brethren and Marvel Studios' multi-billion dollar franchise.
Judge Richard Leon of the US District Court for the District of Columbia said at a hearing that he has found, after a six-week trial, that the deal does not violate antitrust law and can proceed.
In seeking to unify, the two companies argued that a new crop of competitors cast an ominous shadow over their businesses: Netflix, Amazon and Apple in content and distribution; Google and Facebook in advertising. This decision could put more pressure on companies like Amazon, Netflix and Google's YouTube, which have been competing with traditional media companies for eyeballs. But AT&T CEO Randall Stephenson remained at the company's headquarters in Dallas, and he learned of the ruling when AT&T general counsel David McAtee called him, a spokesperson said. 'We're chasing their tail lights, ' Petrocelli said. Post-merger, AT&T rivals like Charter Communications and Cox, which now pay Time Warner for its channels, would suddenly also become AT&T's customers. First floated in October 2016, the deal also brought fire from then-candidate Donald Trump, who promised to kill it "because it's too much concentration of power in the hands of too few".
The decision comes despite criticism from Trump, a frequent detractor of Time Warner's CNN and its coverage. "I urge the Justice Department to take swift action to appeal this judgment to ensure that competition and consumers are protected".
The White House did not immediately respond to a request for comment.