AT&T expects to close the $85 billion deal for Time Warner, barring potential curveballs from the Trump administration, by the end of 2017.
At that point the telco will restructure into two divisions: a media group including Time Warner led by Stankey; and a communications group encompassing DirecTV, wireless and wireline businesses headed by John Donovan, currently AT&T’s chief strategy officer, Bloomberg reported Friday citing anonymous sources.
AT&T chief exec Randall Stephenson will relinquish the CEO title and become executive chairman, according to Bloomberg. But AT&T said that was incorrect.
“Randall Stephenson will remain chairman and chief executive officer of AT&T after we close the Time Warner deal,” an AT&T rep said.
As for the restructuring details in the Bloomberg story, the AT&T rep said, “No decisions on org structure or leadership have been finalized. Randall and Jeff [Bewkes, CEO of Time Warner] are working through that.” A Time Warner rep did not immediately respond to request for comment.
Bewkes, whose contract with Time Warner runs through 2020, has said he will stay on after AT&T’s takeover but it’s unclear how long that might be. When asked about his plans under AT&T ownership, Bewkes in a January interview with Variety said, “I think I’ll be here for quite a while to make this work and bring these innovations to fruition.”
Stankey is currently CEO of the AT&T Entertainment Group. That includes DirecTV, which AT&T bought in 2015, along with AT&T’s other consumer entertainment offerings including video and content development, as well as its mobility, broadband internet, and advertising businesses.
The move to “wall off” Time Warner from DirecTV and AT&T’s telecom services with the restructuring could alleviate regulators’ concerns that the communications giant would somehow use HBO or Warner Bros. content in an anticompetitive way, Bloomberg speculated in the report.
Stephenson has publicly said AT&T has absolutely no intention of offering Time Warner content exclusively to the telco’s wireless and broadband subscribers. “You’re not going to take ‘Game of Thrones’ and make it available only to AT&T customers. That’s crazy. That would destroy the value,” he said at an investment conference this spring.
At the same time, Stephenson has outlined what he sees as a huge opportunity to drive up revenue from the mobile distribution of Time Warner’s entertainment assets. That could mean AT&T will look to produce HBO, Turner and Warner Bros. content in different ways.
AT&T has “the ability… to curate Time Warner content uniquely for a mobile environment,” Stephenson said, speaking at J.P. Morgan’s Global Technology, Media and Telecom Conference in May.
He elaborated: “I’ll cause [HBO CEO Richard] Plepler to panic… [but] think about things like ‘Game of Thrones.’ In a mobile environment, a 60-minute episode might not be the best experience. Maybe you want a 20-minute episode.”