Post Kevin Tsujihara, WarnerMedia Releases First Diversity Report

WarnerMedia Sept. 26 released its first-ever annual report looking at diversity, inclusion and belonging across both its corporate operations and the films, television series and digital content created by its various production businesses.

In September 2018, WarnerMedia announced a “production diversity policy,” which included the commitment to report on its diversity and inclusion efforts annually.

The policy was partially in response to the fallout following the resignation of former Warner Bros. CEO Kevin Tsujihara, who left the studio after revelations of an extramarital affair with an aspiring actress.

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Earlier this year, WarnerMedia hired its first chief enterprise inclusion officer, Christy Haubegger, saying her leadership would be key to expanding and developing initiatives designed to make the company and its content more diverse and inclusive.

The report, covering 2018, highlighted three areas at WarnerMedia: workforce (including workforce composition, employee resource groups), content (including scripted TV, films, news, animation) and community (including industry and local outreach partnerships and programs).

Among the key findings related to workforce and production staffing:

WarnerMedia’s global workforce is 54% male and 46% female, and its U.S. workforce is 53% male and 47% female.

Globally, half of all new hires and promotions to VP and above were women.

About 42% of non-managers were people of color, but representation decreased at more senior levels. However, the percentage of people of color who were hired or promoted in 2018 exceeded their total percentage across all levels.

“This will lead to increased representation going forward,” read the report.

Across WarnerMedia’s non-film scripted programming, females represented 34% of onscreen roles and 23% of behind-the-camera positions.

Across WarnerMedia’s non-film scripted programming, people of color represented 24% of onscreen roles and 23% of behind-the-camera positions.

“[At] WarnerMedia companies, we have a longstanding commitment to diversity and inclusion, and consider these values an important part of our culture and a business priority,” John Stankey, COO of AT&T and CEO, WarnerMedia, said in a statement.

“While I’m incredibly proud of what this report shows and our ongoing dedication to transparency, I recognize that we’ve got more work to do at every level. We know diversity, inclusion and belonging are important to our employees, our creative partners, our customers and to our success.”

Indeed, the report underscored various examples of diversity and inclusion in action, including spotlights on various employee resource groups (Black Professionals@Turner, HBO Proud, Women of Warner UK and others), employee-centric content and platforms showcasing D&I activities across the enterprise (Warner Bros.’ “We See You,” Turner’s “Hello, My Name Is…” and “HBO POV”) and a behind-the-scenes look at the company’s films, TV shows and animated series.

While the report only tracked gender and race, WarnerMedia said it is developing new processes, tools and formats for gathering more detailed information about the diversity of its workforce and productions, allowing it to better tailor its efforts and outreach.

Going forward, the annual report will look at data from the previous full calendar year, and will evolve to reflect the changes taking place across WarnerMedia’s businesses.

Stankey: AT&T Keeping DirecTV, Integral to HBO Max Launch

John Stankey, CEO of WarnerMedia and COO of parent AT&T, Sept. 24 sought to dispel media reports the telecom is looking to jettison satellite operator DirecTV to appease an activist investor and reduce debt.

In an interview with The Wall Street Journal, Stankey said DirecTV would “be important” as WarnerMedia rolls out new subscription streaming video service, HBO Max, early next year.

Specifically, the executive said subscriber data from DirecTV would help WarnerMedia target the appropriate users for HBO Max.

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“We’re constantly looking at the [business] portfolio,” Stankey said. “That’s the normal course of business and it’s not unique to DirecTV.”

The Journal previously reported that AT&T CEO Randall Stephenson was considering spinning off DirecTV, which has lost more than 1 million pay-TV subs as consumers continue to embrace over-the-top video and alternative forms of home entertainment.

Indeed, AT&T has 3 million fewer pay-TV subs since acquiring DirecTV in 2015.

Stankey suggested DirecTV has suffered by not being able to bundle high-speed Internet to consumers as competitor Comcast does.

“Where we’ve built better broadband, the business is performing just fine,” he said.

Stankey also said that Stephenson met with investor Elliott Management Co., which holds more than $3.2 billion worth of AT&T stock, to seek a compromise regarding sought management changes — including replacing the CEO and COO.

Stankey told The Journal there are no plans to replace his position at WarnerMedia or the CEO’s of AT&T.

“I’m not looking to find my successor right at the moment,” he said.

Th executive also alluded to HBO Max being offered at premium price compared to Netflix’s $12.99, Apple TV+ ($4.99) and Disney+($6.99).

With the current HBO Now priced at $15 monthly, HBO Max, which will offer original and catalog programming, will be the most expensive SVOD on the market.

“Higher quality should warrant a slightly higher price,” Stankey said.

 

AT&T Reportedly Considering Spinning Off DirecTV or Merging Unit With Dish Network

Facing mounting mergers-and-acquisition debt, criticism from an activist investor and changing consumer habits toward pay-TV, AT&T is reportedly considering spinning off its DirecTV subsidiary or combining it with competitor Dish Network.

The Wall Street Journal, citing sources familiar with the situation, said CEO Randall Stephenson is exploring the option despite telling an investor event this week he still the supports the satellite TV business AT&T acquired in 2015 for $49 billion.

While nothing could come of the situation, Dish co-founder/CEO Charles Ergen Sept. 17 told the same investor group he welcomes merging the two satellite providers. Ergen tried pursuing DirecTV in 2014, but lost out to AT&T.

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Indeed, with 12 million subscribers — largely buttressed by standalone online TV service Sling TV — Dish would benefit from consolidation. AT&T has projected it would lose more than 1.4 million satellite subs in 2019, including rebranded DirecTV Now (AT&T TV) online subs.

However, when the former parents of Dish and DirecTV considered merging in 2001, federal regulators quashed the idea on antitrust issues.

The Trump Administration is still licking it wounds from a failed attempt to block AT&T’s acquisition of Time Warner — a move some observers contend was largely based on politics involving the president’s dislike of Time Warner subsidiary CNN.

How that would impact a Dish/DirecTV combination is anyone’s guess.

“From a regulatory perspective, it hasn’t been successful and I don’t know that there is any change in that regulatory perspective,” AT&T CFO John Stephens said recently. “I understand the industrial logic, but quite frankly it’s been tried and has been rejected.”

Activist Investor Seeks Ouster of AT&T CEO Randall Stephenson, COO John Stankey

With AT&T spending more than $163 billion acquiring DirecTV and Time Warner (now WarnerMedia), the telecom remains challenged paying down debt and orchestrating a clear strategy for the combined assets in an age of cord-cutting.

That appears to be the gist why activist investor Paul Singer’s Elliott Management sent a 24-page letter to the AT&T board seeking executive changes, according to industry tip sheet “Byers Market”.

Paul Singer

In the letter, Singer contends AT&T’s shareholder returns have underperformed the S&P 500 by well over 100 percentage points over the past 10 years.

He said the share-price underperformance has occurred as AT&T’s M&A strategy has taken it into multiple new markets over a series of deals totaling nearly $200 billion, and as its operational performance has measurably declined.

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As a result, AT&T, according to Singer, is “deeply undervalued,” trading at just over half the multiple of the S&P 500 — by far its biggest discount yet.

Singer, who owns a $3.2 billion stake in AT&T, is known for taking stakes in publicly held companies and firing off letters to the board in hopes of exacting executive change — which often occurs.

About AT&T, Singer reportedly seeks the removal of CEO Randall Stephenson and COO John Stankey (who is also CEO of WarnerMedia) regarding the former’s merger & acquisition strategies.

Specifically, Singer contrasts AT&T’s M&A strategy with former Time Warner CEO Jeff Bewkes.

“When Bewkes took over Time Warner as CEO, he inherited a sprawling company with numerous related but non-core assets — AOL, Time Warner Cable, a collection of publishing assets and other smaller businesses,” read the letter. “He then spent the following decade divesting the non-core assets in order to focus on Time Warner’s leading content franchises.
This strategy paid off: Time Warner became both a flourishing media enterprise and a strong investment, returning more than double the S&P 500’s ~140% return during Bewkes’ 10-year tenure.”

Singer called on the board to evaluate (i.e. sell off) assets such as DirecTV, AT&T’s Mexico operations and U.S. wireline (pay-tv) platform (U-verse) platforms, among others.

In a response, AT&T’s board said it would review the letter, adding the company has already implemented many of the changes outlined by Singer.

The letter comes following the surprise retirement of John Donovan, CEO of AT&T Communications, and the Sept. 3 promotion of Stankey to COO.

Singer, in the letter, said he remains “cautious on the benefits of the [Time Warner, DirecTV] combination.”

Indeed, AT&T’s rollout of standalone online TV service, DirecTV Now, has seen the platform jettison hundreds of thousands of subscribers after it began ending the service’s initial $34.99 monthly fee. The service has been rebranded to AT&T TV.

The telecom has big plans for the launch of HBO Max, a SVOD platform intended to compete with Netflix, Amazon Prime Video, Disney+ and Apple TV+, among others.

At the same time, Max would appear to signal the end for HBO Now, the four-year-old SVOD service with less than 6 million subscribers.

WarnerMedia Hires First Diversity/Inclusion Officer

WarnerMedia June 12 announced the hiring of Christy Haubegger as the media company’s first chief enterprise inclusion officer.

Haubegger, who spent 14 years at Creative Artists Agency, reports directly to CEO John Stankey and works with senior management to drive business growth through strategic investment in diverse audiences and to ensure the organization’s workforce is representative of the markets it serves.

Christy Haubegger

“As we transform our businesses and our culture, we see a unique opportunity to generate outsize growth by delivering world-class content that engages underserved audiences,” Stankey said in a statement. “To realize that opportunity we must make strategic investments, build a more representative workforce, and create a truly inclusive culture.”

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Created with AT&T’s acquisition of Time Warner, which includes Warner Bros., HBO and Turner, WarnerMedia says it want to recognize diversity and inclusion as business imperatives.

The company claims to use its best efforts to ensure diverse actors and crew members are considered for film, television and other projects, and to work with directors and producers who also seek to promote greater diversity and inclusion in the media and entertainment industry.

At CAA, Haubegger spearheaded representation of women and people of color, and helped transformed the diversity of the workforce.

The talent agency has long focused on innovation through diversity and implemented strategies to create sustainable change within the agency and beyond.

Under Haubegger’s leadership, CAA launched “CAA Amplify,” an invitation-only annual event convening high-level multicultural artists and leaders, as well as the industry’s first searchable database of television writers of color.

During her tenure, the agency grew its diverse roster more than 1400% and according to USC’s Annenberg Inclusion Initiative, the agency now represents the largest share of female directors and African- American directors in the motion picture business.

“Christy Haubegger is one of a kind. She is a talented and visionary leader who made a transformational impact on the agency throughout her tenure,” said CAA president Richard Lovett. “She influenced our business and culture, and established CAA as a leader in the promotion of inclusion, creating initiatives that support and advance underrepresented voices. We remain steadfast in our commitment to moving our industry forward and are thrilled to continue working collaboratively with Christy in her new role.”

WarnerMedia Creating Diversity/Inclusion Executive Position

WarnerMedia is set to create a new executive position focusing on diversity and inclusion issues. While no one has yet been hired to become the former Time Warner company’s first chief diversity and inclusion officer, the move was reportedly outlined in a March 20 staff memo from CEO John Stankey.

“During the Global Town Hall meeting [last September], I was asked about the lack of women and diversity on stage,” wrote Stankey. “I understand how important this is. In order for WarnerMedia to be the best company we can be, we have to include diverse voices at every level of our business. And while we already have some of the most talented women and diverse executives in the industry, we have more work to do.”

The chief diversity and inclusion officer will report directly to Stankey.

John Stankey

The new executive position follows restructuring among WarnerMedia, that has seen bosses at Warner Bros., HBO and Turner depart — including the former’s CEO Kevin Tsujihara exit March 18 following a story in The Hollywood Reporter about his affair with actress Charlotte Kirk.

Warner Bros. is now headed by an interim management team consisting of Toby Emmerich, Warner Bros. Motion Picture Group chairman, Peter Roth, Warner Bros. Television Group president and CCO; and CFO Kim Williams.

“There is no silver bullet to get us to where we need to be, but the leaders across our company are committed to working together to make the changes necessary as we build on our foundation towards greater progress,” Stankey wrote. “I believe that our new structure will enable us to do even more to achieve these objectives.”

 

 

DOJ Antitrust Boss: ‘You Learn More From Losing’

Following legal rebuke at the lower federal court and subsequent appeals court level regarding efforts to block AT&T’s $84 billion acquisition of Time Warner, the Department of Justice’s Makan Delrahim, head of the agency’s antitrust unit, said more was learned in defeat than in winning the litigation.

Speaking March 20 at the American Communications Association’s confab in Washington, D.C., Delrahim said legal challenges to future corporate vertical mergers — such as Sprint’s pending merger with T-Mobile — were empowered following the AT&T/Time Warner challenge.

“There are many lessons to be learned from the U.S. v. AT&T,” Delrahim said, according to a recording released by the ACA and reported by Deadline.com. “Given the standard of review that we were facing, [the outcome] wasn’t a surprise. You learn more from losing than from winning.”

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Specifically, the executive contends future legal challenges by the DOJ will be based more on structural changes rather than behavior.

Delrahim said the government’s approval of Comcast’s $30 billion acquisition of NBC Universal in 2009 revolved around behavior/consent remedies the cable giant was beholden to follow for a number of years — including silent partnership in Hulu.

Similar regulatory approach to AT&T/Time Warner wouldn’t have been worth the compromise, according to Delrahim.

“The AT&T offer will expire in less than seven years,” he said. “The new market structure [i.e. WarnerMedia] created by the transaction will remain indefinitely. If there’s harm that the arbitration offer is necessary to solve, then there’s likely to be harm in the future that will remain after the arbitration offer expires.”

Delrahim said the silver lining from the appeals court ruling was that some vertical mergers can be harmful to consumers — provided the government proves its case.

“The [appeals court] corrected many of the District Court’s misstatements and articulated a standard that is valuable,” he said.

House Democrats Investigating Whether Trump Personally Sought to Block AT&T/Time Warner Merger

The Democrat-controlled House of Representatives continues to ratchet up scrutiny of President Trump and his administration — now focusing on whether the President personally attempted to block AT&T’s $85 billion acquisition of Time Warner.

The merger, which created WarnerMedia, was officially confirmed last month by a federal appeals court denying an objection by the Department of Justice.

Jerrold Nadler (D-N.Y.), chairman of the House Judiciary Committee, and David Cicilline (D-R.I.) sent letters to Makan Delrahim, chief of the Justice Dept.’s antitrust division, and White House counsel Pat Cipollone, seeking documentation regarding possible interference by Trump.

Jerry Nadler

The inquiry is in response to a New Yorker story that claimed Trump personally wanted to kill the merger largely due to his dislike for Turner-owned CNN and its reporting of his administration.

“Even the appearance of White House interference in antitrust law matters undermines public trust in the Department of Justice’s integrity and tarnishes meritorious enforcement by the antitrust division,” Nadler and Cicilline wrote. “The fact of actual interference would constitute a serious abuse of power.”

David Cicilline

Delrahim has said he was never pressured by Trump to pursue antitrust litigation.

“I have never been instructed by the White House on this or any other transaction under review by the antitrust division,” Delrahim said on Nov. 8, 2017, prior to filing the lawsuit.

AT&T originally sought to investigate Trump’s influence — a request denied by federal judge Richard Leon in the original antitrust trial. CEO Randall Stephenson called Trump’s possible interference the “elephant in the room.”

Makan Delrahim

WarnerMedia Re-Opens Tsujihara Inquiry Regarding Inappropriate Behavior

WarnerMedia has re-opened an internal investigation involving Kevin Tsujihara, chairman and CEO of Warner Bros., regarding allegations he traded sex for auditions with an aspiring actress.

Tsujihara, the former home entertainment executive who became CEO of Warner Bros. in 2013 when the studio was owned by Time Warner, had been previously investigated for inappropriate behavior involving British actress Charlotte Kirk.

That investigation reportedly found no inappropriate influence by Tsujihara. Kirk did land small roles in How to be Single (2016) and Ocean’s 8 in 2018, in addition to auditions for other Warner movies.

When details of the affair, including efforts by Tsujihara, director Brett Ratner and business partner James Packer to placate Kirk were made public March 6 by The Hollywood Reporter, WarnerMedia re-opened the investigation.

“Whenever we receive new allegations, it is our standard practice to conduct an appropriate investigation. And that is what we will do here,” a WarnerMedia representative said in a media statement.

Lawyers for both Kirk and Tsujihara deny the CEO exerted any preferential treatment or pressure on behalf of the actress.

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The inquiry comes as Tsujihara had his role at WarnerMedia expanded to include oversight of Cartoon Network, Adult Swim, Boomerang, Otter Media, Turner Classic Movies and WarnerMedia’s licensed consumer products.

Indeed, Tsujihara’s long history in digital content distribution dates back to the dotcom era where he spearheaded Warner’s short-lived Entertaindom platform.

In an interview 10 years ago, Tsujihara questioned traditional distribution in a rapidly evolving digital age. He pushed for early electronic sellthrough movie release dates ahead of DVD, arguing EST margins were better than packaged-media’s cash cow status. And he advocated for early access to theatrical movies in the home at a premium price, otherwise known as PVOD.

It’s a progressive mindset that over time convinced Time Warner CEO Jeff Bewkes to put Tsujihara in charge of Warner Bros., arguing his digital vision and recognition of alternative distribution channels outweighed the status quo at the venerable film studio.

A legacy Tsujihara nurtures to this day spearheading stacking rights of Warner TV content to distribution partners across the ecosystem.

“At Warner Bros., what we want to do is take the show and put it on the most appropriate platform,” Tsujihara told Deadline.com in an interview.

Tsujihara was a big supporter of the studios banding together to create a digital storage locker for movies, first championing UltraViolet and later joining the other majors, sans Paramount, in Movies Anywhere — a platform that links to seven online retailers, including iTunes, Amazon Instant Video, Vudu, Comcast’s Xfinity Store, Google Play, Microsoft Movies & TV and FandangoNow.

In an interview last month with the Los Angeles Times, Tsujihara reiterated continued support for PVOD, despite the fact most exhibitors and Wall Street analysts consider it a failed venture.

“It’s about finding the right platform for the content,” he said. “If consumers want to be able to experience [a movie] in the home sooner, then they should have that. That’s where we’d like to see the movie business go.”

Kevin Tsujihara: A Misplaced Asset at WarnerMedia

As the dust settles from WarnerMedia’s management shuffle, with former NBC Universal executive Bob Greenblatt assuming chairmanship of the media company’s entertainment unit, including budding over-the-top video – Kevin Tsujihara, chairman/CEO of Warner Bros., expanded his duties to include – consumer products?

It’s an odd career move for Tsujihara, whose long history in digital content distribution dates back to the dotcom era where he spearheaded Warner’s short-lived Entertaindom platform.

In an interview 10 years ago, Tsujihara questioned traditional distribution in a rapidly evolving digital age. He pushed for early electronic sellthrough movie release dates ahead of DVD, arguing EST margins were better than packaged media’s cash cow status. And he advocated for early access to theatrical movies in the home at a premium price, otherwise known as PVOD.

It’s a progressive mindset that over time convinced Time Warner CEO Jeff Bewkes to put Tsujihara in charge of Warner Bros., arguing his digital vision and recognition of alternative distribution channels outweighed the status quo at the venerable film studio.

A legacy Tsujihara nurtures to this day spearheading stacking rights of Warner TV content to distribution partners across the ecosystem.

“At Warner Bros., what we want to do is take the show and put it on the most appropriate platform,” Tsujihara told Deadline.comin a March 4 interview.

Tsujihara was a big supporter of the studios banding together to create a digital storage locker for movies, first championing UltraViolet and later joining the other majors, sans Paramount, in Movies Anywhere  – a platform that links to seven online retailers, including iTunes, Amazon Instant Video, Vudu, Comcast’s Xfinity Store, Google Play, Microsoft Movies & TV and FandangoNow.

In an interview last month with the Los Angeles Times, Tsujihara reiterated continued support for PVOD, despite the fact most exhibitors and Wall Street analysts consider it a failed venture.

“It’s about finding the right platform for the content,” he said. “If consumers want to be able to experience [a movie] in the home sooner, then they should have that. That’s where we’d like to see the movie business go.”

Regardless, as WarnerMedia readies a branded OTT platform, Tsujihara is tasked with creating consumer product opportunities for Cartoon Network, Adult Swim, Boomerang, Otter Media and Turner Classic Movies, among others.

“The lion’s share of their profitability comes from affiliate sales and advertising,” he told Deadline. “So a vertically integrated entity would say, ‘How can we drive more consumer products revenue from these properties?’”

Apparently Tsujihara is looking forward to the vertical challenge – one not unprecedented in home entertainment. Former Disney home entertainment executive Bob Chapek transitioned to consumer products following years of peddling home video.

Now he’s chairman of parks and resorts since 2015 and considered by some Disney’s next CEO when Bob Iger retires.

Maybe Tsujihara is on to something.