Debt-laden AT&T is considering a possible sale of the digital-advertising assets it assembled as it prepared to acquire the former Time Warner for around $85 billion in 2018, according to a report in The Wall Street Journal, a sign of diminishing ambitions in that particular arena.
AT&T in 2017 launched a separate unit devoted to assembling data, analytics and advertising opportunities, mainly using consumer information from its massive DirecTV satellite-broadcasting unit. It also purchased AppNexus, which operates a digital-ad marketplace, for a price said to be around $1.6 billion in 2018. The resulting unit, Xandr, was originally billed as a place where advertisers and even media companies could join to delineate specific audiences, and the company even struck deals with AMC Networks and Walt Disney. The former CEO of the unit, eventually named Xandr, reported to then AT&T CEO Randall Stephenson
But something happened as AT&T began to shuffle its corporate leadership. Brian Lesser, the Xandr CEO, left earlier this year as it became clear that the unit would not be run separately from WarnerMedia under AT&T’s new CEO, John Stankey (above, pictured). In recent weeks, another top Xandr leader, Kirk McDonald, left to become CEO of the North American operations of WPP’s large GroupM media buying operations. WarnerMedia, meanwhile, has yet to replace Donna Speciale, its former president of ad sales who was pushed out by AT&T after completing the company’s upfront sales efforts in 2019.
“We do not wish to comment,” said an AT&T spokesperson. The Journal previously reported that AT&T was also considering a sale of DirectTV, which has suffered subscriber defections in recent quarters.
And yet, the company is expected to require expertise in digital advertising in the not-too-distant future. WarnerMedia is expected to launch an ad-supported version of its HBO Max streaming video service in 2021.
Discussions about a potential sale of Xandr are said to be “at an early stage,” according to the Journal, and “may not ultimately result in a sale, which is unlikely to fetch more than the amount AT&T paid for AppNexus in 2018.”
AT&T has been reported to have considered the possible sale of a number of assets, including its Crunchyroll, a streaming-video anime service.
A sale or other disposition of DirecTV would likely fetch the most money for the telecommunications giant. DirecTV is a big part of the media industry’s distribution ecosystem, but it has in recent years had to contend with the migration of subscribers to cheaper, more flexible video options as more consumers adopt broadband. DirecTV at present has about 17.7 million subscribers in the U.S., down from more than 23 million in 2018.