Controversy erupts over alleged push to spin off CNN in media mega-merger

Matters complicated by Trump admin.'s tense relationship with the network.

— -- Amid antitrust concerns over a potential merger between AT&T and Time Warner, a controversy has erupted over whether AT&T would have to sell off CNN to sidestep those concerns.

According to U.S. Department of Justice officials, AT&T offered just days ago to divest from CNN and later sell the news network. But the chairman and CEO of AT&T suggested otherwise.

The government's reservations about the deal stem from the effects of combining AT&T's distribution platforms, including satellite television provider DirecTV, and the wide catalog of content under the Time Warner umbrella, such as Turner Broadcasting, CNN's parent company. On Monday, the Justice Department says it met with AT&T to discuss the matter.

At Monday's meeting, AT&T offered divestment from CNN, but that was flatly rejected by the department's Antitrust Division, Justice Department sources said. AT&T representatives then proposed selling the network, which officials said wouldn't necessarily solve the theorized harm to the public, the DOJ sources added.

AT&T chairman and CEO Randall Stephenson, responding Wednesday to reporting on the company's conversations with the Justice Department, denied that an offer to sell came from him.

"Throughout this process, I have never offered to sell CNN and have no intention of doing so," Stephenson said in a statement provided to ABC News.

The Trump administration has had a strained relationship with the news network.

The president previously labeled the network's journalism "fake" and "fraud" news and mockingly called the channel the "Clinton News Network" during last year's presidential race against Hillary Clinton.

A senior White House official told ABC News the Justice Department is "the only ones making the decisions here," adding, "we are not involved."

In a statement, the Justice Department said it "is committed to carrying out its duties in accordance with the laws and the facts. Beyond that, the department does not comment on any pending investigation.”

A lot of different options are on the table for how to proceed, Justice Department officials said. No decision regarding the merger's next steps has been reached, but conversations remain ongoing.