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As AT&T Merger Looms, Warner Bros. Revamps Its Film Ranks

There’s been a whole lotta shakin’ goin’ on at Warner Bros. movie studio over the past month. This week, in a major management shift, Toby Emmerich was put in charge of all film operations with expanded duties, and the studio’s veteran worldwide marketing and distribution chief Sue Kroll was moved out of her role into an exclusive production deal on the Burbank lot.

In early December, after the box office disappointment of “Justice League,” Warners pushed out Jon Berg, the executive overseeing the studio’s DC films (he’s now producing partner with filmmaker Roy Lee), and a week ago promoted its New Line executive Walter Hamada to a new role shepherding the DC superhero pictures and other comic-book movies to the big screen.

The elevation of Emmerich to chairman of the pictures group is a long overdue move by Warner Bros. Entertainment CEO Kevin Tsujihara, who had been reluctant to take a step back from the hands-on role he has insisted on playing in the day-to-day operations of the film division.

In contrast, when Tsujihara’s predecessor, Warners veteran Barry Meyer, was promoted to that job, he instantly tapped Alan Horn as president of the movie studio, which made sense, since Meyer had no experience on the film side and had a much bigger purview to worry about.

In theory, the move will give Emmerich more authority, empowering him to select the movies the studio makes, while freeing Tsujihara up to travel more and create more opportunities for the studio internationally. It also alleviates the power struggle between Kroll and Blair Rich, who will now serve as president of global theatrical and home entertainment marketing.

“This is the best organizational structure for Warner Bros.,” said Tsujihara, noting that Emmerich’s promotion means “you have one person accountable or responsible for putting the slate together.”

In an interview with Variety, Tsujihara emphasized that he will continue to have a hand in the film division even as he spends more time on bigger-picture issues.

“I’m going to still be involved with Toby,” said Tsujihara. “I’ll just have less direct reports. The overall management of the company requires you to juggle a number of different balls in the air. … This lets me focus on some of the things that we need to do strategically.”

Tsujihara, who will be under scrutiny by Time Warner’s would-be new corporate parent company AT&T, needs to focus on keeping his own job when (and if) the merger goes through. Once the acquisition is completed, as expected, he and all of Time Warner’s other division heads will have a new boss to answer to: AT&T vet John Stankey, who will succeed Time Warner chief Jeff Bewkes in overseeing all of the company’s media brands. Bewkes has previously said that he plans to step down once the sale is finalized. Tsujihara stressed that he intends to remain at Warner Bros. going forward.

“I plan on being here and running the studio today and tomorrow and into the future,” he said. “I love the studio, and I love the people here.”

It’s widely known that Stankey is not a fan of companies having layer upon layer of top managers, as is standard operating procedure for most traditional media companies and studios. Already, executives on the lot are concerned that AT&T will bring greater scrutiny to their expense accounts and travel arrangements.

There will undoubtedly be more shake-ups at Warner Bros. and throughout the Time Warner media empire as Stankey looks for ways to cut costs. However, analysts believe that AT&T will take some time to make big changes as the telecom giant tries to wrap its arms around Hollywood’s way of doing business.

“My intuition would tell me that AT&T will be very cautious and hands off at the beginning until they get a feel for how the business goes,” said Hal Vogel, a veteran media analyst. “But you have to assume there will be some culture shock.”

Eventually, Vogel said, AT&T will start reshaping the studio management and will become, in his words, “the spoon stirring the soup.”

That day may never come.

AT&T and Time Warner, which struck a deal in October 2016, extended their merger agreement until April 22, 2018, in light of the lawsuit by the Trump administration’s Department of Justice to block the $85 billion takeover. The combined company would marry AT&T and its DirecTV satellite unit with Time Warner’s film and television studios, premium cable outlet HBO and Turner Broadcasting (which includes news channel CNN and TNT).

The parties are poised for an ugly courtroom showdown in April. AT&T CEO Randall Stephenson has vowed to vigorously contest the DOJ’s lawsuit and has insisted that his company is unwilling to part with any of its assets to get the deal approved.

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