AT&T Boss Sends Mixed Messages Following Time Warner Acquisition Close
June 15, 2018
NEWS ANALYSIS — Following consummation of AT&T’s $85 billion acquisition of Time Warner, AT&T CEO Randall Stephenson sent out a staff memo welcoming Time Warner — which includes Warner Bros., Turner and HBO — to the fold.
“As different as our businesses are, I think you’ll find we have a lot in common,” Stephenson said, adding, “We’re big fans of your talent and creativity. And you have my word that you will continue to have the creative freedom and resources to keep doing what you do best.”
Commonality is always a slippery slope in corporate mergers. Shared interests often translate into operational redundancies that require fiscal cutbacks and eliminated positions.
AT&T projects $1.5 billion in annualized cost “synergies” by end of the third year of the acquisition.
Indeed, in a separate statement, AT&T said Time Warner would be folded into the telecom’s media business segment headed by John Stankey, with a new brand name to be announced.
As previously reported, Time Warner CEO Jeff Bewkes will continue for a limited time as a senior advisor during the transition. All of Bewkes’ direct reports now answer to Stankey, which include Kevin Tsujihara, CEO of Warner Bros., John Martin, CEO of Turner, and Richard Plepler, CEO of HBO.
“We’re going to bring a fresh approach to how the media and entertainment industry works for consumers, content creators, distributors and advertisers,” said Stephenson.
How that “fresh” approach works out for Warner remains to be seen.
Tsujihara, in May, initiated a string of management changes that included the promotion of Jim Wuthrich to president of worldwide home entertainment and games. Wuthrich reports to Ron Sanders, president of worldwide theatrical distribution and home entertainment.
Warner Bros. Home Entertainment reported a near 6% increase in fiscal 2017 revenue to $1.56 billion from physical and digital sales of movies — up from $1.48 billion in 2016. Sales of TV content on disc and digital declined 11% to $418 million from $470 million.