You will be redirected back to your article in seconds

AT&T Chief on HBO Max, DirecTV Sale Prospects and John Stankey’s Future

AT&T chairman-CEO Randall Stephenson has signaled his willingness to consider selling all or part of DirecTV as the satellite provider struggles with major subscriber losses.

The AT&T boss was pressed by Wall Street analysts Monday morning during the company’s third-quarter earnings call about the future of DirecTV, which posted a whopping 1.1 million subscriber loss for the quarter. Stephenson said AT&T is open to the possibility of a range of potential options for DirecTV.

“We have no sacred cows,” he said, referring to the ongoing asset review that AT&T is undertaking as it sells off non-core assets to pay down debt.

On Sunday, AT&T confirmed the sale of its majority stake in Central European Media Enterprises for $1.1 billion. AT&T chief financial officer John Stephens told analysts on the call that AT&T has sold $14 billion in assets this year to attack its leverage load. Another $5 billion to $10 billion worth of asset sales are expected next year.

DirecTV has become a drain on AT&T as its subscriber losses have accelerated much faster than AT&T anticipated when it first cut a deal to acquire the satellite broadcaster in 2015 for $48 billion. There’s been speculation in the marketplace that DirecTV may be merged with the nation’s other satellite TV provider, Charlie Ergen’s Dish, which has also faced an exodus of customers as the pay-TV landscape has become more competitive.

“We will evaluate multiple options, and that includes partnerships and other structures [for DirecTV],” Stephenson said.

AT&T’s earnings come one day before the company raises the curtain on WarnerMedia’s HBO Max, the streaming platform scheduled to launch in the spring. Stephenson talked up the venture as a crucial driver of earnings and the synergy strategy that HBO has sought to assemble during the past few years in marrying Time Warner’s content with AT&T’s wireless telco and data services.

“It’s time to reap the rewards of the investments we made over the last few years,” Stephenson said in outlining AT&T’s three-year growth plan for investors.

Stephenson said AT&T is projecting 50 million domestic subscribers for HBO Max — an enhanced content offering that encompasses the traditional HBO service and new tiers of original and library content — by 2025. WarnerMedia is hosting an HBO Max investor presentation Tuesday on the Warner Bros. lot in Burbank, Calif.

“This is not Netflix. This is not Disney. This is HBO Max,” Stephenson said. “It’s going to have a very unique position in the marketplace.” Stephenson reiterated that AT&T expects to add a live streaming component to the HBO Max bundle over time. “That platform becomes the platform through which we also deliver live streaming TV,” he said.

Stephenson said AT&T leadership are focused on “product simplification” for the company’s pay-TV offerings around traditional DirecTV linear service, HBO Max and a basic low-cost streaming package recently introduced as AT&T Watch TV.

Stephenson was also pressed on the future of John Stankey, who was promoted in October to president and chief operating officer of AT&T in addition to his role as CEO of WarnerMedia. Stankey’s promotion spurred speculation that AT&T would soon find a new leader for WarnerMedia, as his promotion to COO was seen as the first step toward eventually succeeding Stephenson in the top job.

But as AT&T faced public criticism from investor Elliott Management, Stephenson on Monday made the pledge that he will remain CEO at least through the end of 2020. After Stephenson’s departure, the AT&T board has determined the roles of chairman and CEO will be divided.

On the call, Stephenson indicated that Stankey would be status quo in his dual role for the near term. “I don’t anticipate that he will relinquish (WarnerMedia),” Stephenson said. “He’s got a big job. He has been spending a lot of time building his leadership team, getting the right people in the right spots and getting HBO stood up.”

At the same time Stephenson allowed that Stankey will eventually need more help. “No doubt he’ll find the right person for that job,” he said. “I feel really good about the team he’s assembling and I feel really good about where it’s going.”

More Biz

  • The Edge, Adam Clayton and Bono

    U2 Tops Rolling Stones, Ed Sheeran as Highest-Grossing Touring Artist of the Decade

    U2 topped the Rolling Stones and Taylor Swift as the top-grossing touring artist of the 2010s, according to data from Pollstar. U2 grossed more than a billion dollars — $1,038,104,132, to be exact — although that number is likely to grow, as the group is currently on its “Joshua Tree 2019” tour in Australia, New [...]

  • supreme court byron allen comcast

    Africa Channel Owner, Congressional Black Caucus Blast Comcast Over Byron Allen Case

    The Congressional Black Caucus and an owner of cable’s Africa Channel have turned up the pressure on Comcast, blasting the cable giant for its business practices and legal strategy in fighting Byron Allen’s racial discrimination lawsuit. Paula Madison, an owner of The Africa Channel (TAC), issued a lengthy statement criticizing Comcast for what she characterized [...]

  • Def Jam Logo

    Layoffs Hit Def Jam Records

    Def Jam Records laid off several employees this week, including executive VP of brand strategy and content Noah Callahan-Bever and OJ Lima, senior VP in that department, a source close to the situation has confirmed to Variety. A total of seven employees let go, a number that includes regional promotion staffers not based in New [...]

  • The Story of Erroll Garner, the First

    The True Story of Erroll Garner, the First Artist to Sue a Major Label and Win

    It’s not at all unusual for artists to engage in creative or financial differences with their record labels, but only a few end up in court. Last year, Kanye West sued his label, Universal, and publisher, EMI, claiming that his deals amounted to “servitude” (the EMI suit was settled in September), echoing Prince’s famous battle [...]

  • Peter Gray

    Columbia Records Names Peter Gray Executive VP/ Head of Promotion

    Peter Gray, who stepped down as Warner Bros. Records’ executive VP/GM and head of radio promotion last year, is joining Columbia Records as the label’s EVP and head of promotion, sources tell Variety. He fills the role vacated by Lee Leipsner, who left the company in March. Gray’s appointment is the latest in a series [...]

  • U2, Seattle 14 May 2017

    U2 Drop New Song, ‘Ahimsa,’ Ahead of First Concert in India

    After a flurry of rumors on Thursday, U2 dropped their first single in two years: “Ahimsa,” a collaboration with Oscar- and Grammy-winning Indian musician AR Rahman, ahead of the group’s first-ever visit to the country next month. Rahman has a vast track record of film soundtracks and is best known for his work on the [...]

  • Sean "Diddy" Combs Revolt TV

    Sean Combs Slams 'Illusion of Economic Inclusion' at Comcast Amid Byron Allen Fight

    Sean Combs has come out swinging against Comcast in a lengthy statement prompted by the cable giant’s legal battle with Entertainment Studios chief Byron Allen. Combs accused Comcast of maintaining “the illusion of economic inclusion” in its handling of a carriage agreement with Combs’ Revolt TV channel. Combs was critical of Comcast for failing to [...]

More From Our Brands

Access exclusive content