AT&T is planning for a more media focused future, Bloomberg reported, saying the company will redefine the role of CEO Randall Stephenson after it closes its acquisition of Time Warner for USD 85.4 billion. Although Stephenson will remain the top dog at the company, he will drop the title of CEO and become executive chairman, overseeing two new CEOs who will independently manage the company’s telecom and media businesses, sources close to the matter said. Stephenson will focus on directing the company’s new course as a media powerhouse.
John Stankey, who now leads DirecTV and other entertainment businesses, will be CEO of the media division, including Time Warner. DirecTV will become part of a unit that includes AT&T’s traditional phone businesses, to be run by John Donovan, who will be promoted from strategy chief to CEO. Time Warner CEO Jeff Bewkes has said he will stay on in some capacity for at least a year after the merger is complete. An AT&T spokesperson said Stephenson and Bewkes are still working on the merger plans, and that no final decisions have yet been taken about the future structure and leadership.
By naming two CEOs who can run their businesses at arm’s length, AT&T is also addressing regulator concerns that the company’s TV and broadband networks could favour content produced by Time Warner’s HBO or Warner Bros. Barring any objections from antitrust regulators or intervention by President Donald Trump, AT&T says it expects the deal to close by year end.
The separation of AT&T into new divisions will be both geographical and cultural. The plan calls for AT&T to consolidate more of its service operations, like wireless into its Dallas headquarters, where Donovan will be located. Glenn Lurie, who heads the wireless business, will be among the executives relocating to Dallas from Atlanta. Stankey will run the media division from his California office. The business, comprised mostly of Time Warner, will stay intact with operations in New York and Los Angeles.
While AT&T has pledged it won’t interfere with the expertise of its new Hollywood colleagues, Bloomberg notes that Stephenson hasn’t been able to contain his enthusiasm for how shows could be chopped up for bite-sized delivery. During a presentation to investors in May, he shared some of his ideas about how the media properties could fit in the increasingly mobile video market, suggesting 20-minute versions of “Game of Thrones.”
