John Stankey is on a corporate combat mission to prove that AT&T leaders were right to spend $130 billion-plus on transformative acquisitions of Time Warner and DirecTV over the past four years.

The 34-year AT&T veteran and CEO of WarnerMedia doesn’t intend to let the recent outburst of criticism from activist investors about leadership decisions derail his march to the top of AT&T. Stankey is poised to replace Randall Stephenson as CEO within two years, according to longtime AT&T watchers.

“I believe that [AT&T’s critics] are categorically wrong” to doubt the diversification strategy that Stephenson has pursued, Stankey tells Variety. “We think building new forms of distribution that complement traditional pay-TV distribution bundles are going to drive the health and success of the media business moving forward. The health and success of [AT&T’s] advertising business and the connectivity business and entertainment together are the linchpin of why we’re doing what we’re doing.”

AT&T’s long stock slump and spending spree have irritated some investors, who are highly skeptical about the benefits of uniting AT&T’s wireless telephone and data services with what is now WarnerMedia’s content and DirecTV’s pay-TV platform. AT&T executives have been in “full war-room mode” at the company’s Dallas headquarters in the weeks since activist investor Elliott Management went public Sept. 9 with a detailed critique of the company’s present state.

Stankey says he is not actively searching for candidates to replace himself as CEO. But he doesn’t dispute the suggestion that pressure from Elliott and at least one other investor group may accelerate a leadership transition at WarnerMedia within as little as 12 months.

“I wouldn’t rule out the possibility that some other individual better suited to do this than me will [take over] WarnerMedia at some point in time,” Stankey says.

WarnerMedia Entertainment chairman Bob Greenblatt and Jeff Zucker, WarnerMedia News and Sports chair and CNN chief, are seen as potential internal candidates to succeed Stankey. However, given that WarnerMedia has already endured several months of executive turmoil, AT&T may opt to bring in an outsider for the role.

Stankey’s elevation on Sept. 3 to AT&T president and chief operating officer, on top of his WarnerMedia duties, has set him on a clear path to take over for Stephenson. Vocal investor criticism of the company’s big strategic swings comes at an inopportune time for Stankey, who was instrumental in engineering both the $48.5 billion acquisition of DirecTV in 2015 and last year’s $85.4 billion purchase of Time Warner.

John Stankey Illustration

Elliott’s 23-page letter to AT&T’s board, signed by partner Jesse Cohn and associate portfolio manager Marc Steinberg, indirectly questions Stankey’s qualifications to lead WarnerMedia, whose content-focused operations are very different from his background in telco and wireless services.

“The Company is now a major player in many new verticals where its long history and legacy have little bearing, and it finds itself battling competitors on multiple new fronts — its traditional telecom competitors as well as new challengers in newly acquired businesses,” Cohn and Steinberg wrote. “Given AT&T’s history of strategic and operational issues and the very different skills needed to manage some of these new businesses, does AT&T have the right mix of leadership at the Company?”

One of AT&T’s rationales for loading up Stankey with responsibilities as AT&T’s chief operating officer was to put him in position to ensure that the entire company gets behind efforts to integrate AT&T’s telco and data service businesses with WarnerMedia’s content and distribution assets.

John Hodulik, telecom and media analyst for UBS, sees Greenblatt, the seasoned TV veteran who was named WarnerMedia Entertainment chairman in March, as the logical choice to take on more responsibility at the content arm.

“I would imagine that John is going to pull back from some of his responsibility to [the former] Time Warner units and cede more decision-making to Bob,” Hodulik says.

Hodulik sees Stankey as well-positioned to ride out the current tempest because of his depth of experience in working in virtually every sector of AT&T. But one of the biggest challenges that AT&T faces is in responding to the fundamental shifts in the businesses it just acquired through Time Warner. The arms race to launch direct-to-consumer streaming platforms — WarnerMedia’s HBO Max is targeted for a spring launch — is more intense in 2019 than Stankey and others expected when they first cut the deal to buy Time Warner in October 2016.

“Entertainment is going through a massive transformation from what effectively has been a wholesale business to a retail business,” Hodulik says. “It remains to be seen whether WarnerMedia or anybody can create value out of that transition.”

Stankey had been expecting to succeed Stephenson within another year or two, a source close to the situation says. Stankey is not happy about the prospect of giving up the reins of WarnerMedia so soon after the post-acquisition reorganization plan was laid out, a knowledgeable source says. The former Time Warner companies — HBO, Warner Bros. and Turner — have seen radical changes at the top and structurally this year as AT&T wraps its arms around the high-priced acquisition.

HBO continues to lure subscribers with shows such as “Big Little Lies” (left) and “Chernobyl.”

The urgent need to demonstrate progress at WarnerMedia has only accelerated as Wall Street has soured on the company’s decision to buy DirecTV. The picture for the satellite TV provider has grown grimmer, with six-figure subscriber losses every quarter.

“They effectively bought that business at the top,” Hodulik says. “Whatever synergies they created from the acquisition have been dwarfed by the rapid decline in the traditional pay-TV ecosystem.”

Stankey declined to comment on the AT&T succession speculation, saying that those decisions are in the hands of the board of directors.

“I know what my job as COO is now,” he says. “It’s not to run the communications company. It’s not calling the shots on how we develop new technologies to support the advertising business. My job is to get [division leaders] working together in areas where we think value is created by putting businesses together.”

AT&T has moved quickly to engage with representatives from Elliott and other investors who have also raised concerns about the company’s poor stock performance and outlook. AT&T’s charm offensive is likely to keep the situation from boiling over into a board of directors’ proxy fight at the annual shareholders meeting in April, observers say.

“It’s important that we make sure the investor base is comfortable with where we are taking the business,” Stankey acknowledges.

He cited HBO’s triumph on Sept. 22 at the Primetime Emmy Awards as evidence that AT&T’s newly adopted content operations are still going strong despite exponential growth in competition. He’s also frustrated by the suggestion that WarnerMedia is lacking in qualified leaders to drive the content business. While HBO, Warner Bros. and Turner have seen turnover in leadership, programming and production decisions nevertheless remain in the hands of Time Warner veterans such as HBO original programming chief Casey Bloys, Warner Bros. TV head Peter Roth and Warner Bros. Pictures chief Toby Emmerich. Former Turner content boss Kevin Reilly and his lieutenant Sarah Aubrey are leading the charge in finding distinctive programming for HBO Max in addition to steering TNT, TBS and TruTV. CNN remains firmly in the hands of Zucker.

“We know we have to execute,” Stankey says. “We have to make sure each one of our entities is doing the right things to help each other. This management team is very focused on doing that.”