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.

 

Report: Trump Personally Sought to Block AT&T/Time Warner Merger

Despite claims to the contrary, President Trump wanted to block AT&T’s $85 billion acquisition of Time Warner — largely for political reasons, according to a report by The New Yorker.

According to the publication, which cited a “well-informed source,” Trump in 2017 called on former economic advisor Gary Cohn and then-chief-of-staff John Kelly to personally ensure that the Justice Department filed a lawsuit against the merger — which it did in November, citing antitrust concerns.

Trump, on the 2016 campaign trail, had said the merger would be bad for the country. According to the New Yorker, Trump’s decision was largely due to his dislike for Time Warner’s CNN news division, which he often called “fake news” in response to critical reports of his administration.

“The President does not understand the nuances of antitrust law or policy,” a former unnamed official told the publication. “But he wanted to bring down the hammer.”

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When a U.S. federal court judge ruled in favor of AT&T, the DOJ filed an appeal, which was rejected last week by an appeals court. The merger resulted in the creation of WarnerMedia, which includes Warner Bros., HBO and Turner.

The intervention by the Justice Department raised eyebrows at the time as it represented the agency’s first since it successfully blocked AT&T’s $39 billion acquisition of T-Mobile in 2011.

Indeed, The New Yorker stated Trump had no objection to 21st Century Fox’s $71.3 billion asset sale to The Walt Disney Co. by longtime supporter Rupert Murdoch, whose Fox News business remains an influential media asset to the President.

Bob Greenblatt Named Chairman of WarnerMedia’s Entertainment Unit; Kevin Tsujihara’s Role Expanded

As expected, AT&T March 4 named former NBC Universal executive Bob Greenblatt chairman of WarnerMedia’s entertainment and over-the-top video businesses. Greenblatt reports to WarnerMedia CEO John Stankey.

Greenblatt, who left NBC Universal six months ago, joins the former Time Warner company following last week’s exits of HBO boss Richard Plepler and Turner’s David Levy.

Greenblatt oversees HBO, TNT, TBS, truTV, and the company’s over-the-top video business. Kevin Reilly remains in charge of Turner programming, in addition to spearheading WarnerMedia’s pending streaming video service.

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Meanwhile, longtime home entertainment executive Kevin Tsujihara remains chairman/CEO of Warner Bros., while adding responsibilities involving children and young adult viewers.

Specifically, Tsujihara will now also oversee Cartoon Network, Adult Swim, Boomerang, Otter Media, Turner Classic Movies and WarnerMedia’s licensed consumer products.

CNN president Jeff Zucker adds the title chairman of WarnerMedia news and sports, while Gerhard Zeiler transitions from president of Turner International to chief revenue officer at WarnerMedia.

“We have done an amazing job establishing our brands as leaders in the hearts and minds of consumers,” Stankey said in a statement. “Adding Bob Greenblatt to the WarnerMedia family and expanding the leadership scope and responsibilities of Jeff, Kevin and Gerhard — who collectively have more than 80 years of global media experience and success — gives us the right management team to strategically position our leading portfolio of brands, world-class talent and rich library of intellectual property for future growth.”

HBO Boss Richard Plepler Departs

Longtime HBO executive Richard Plepler is leaving the pay-TV channel, following a series of management changes underway at WarnerMedia that reportedly include bringing in former NBC Universal executive Bob Greenblatt as a senior executive reporting to CEO John Stankey.

Plepler, who joined HBO in 1992, helped greenlight myriad hits for the platform, including “Game of Thrones,” “True Detective,” “Veep” and “True Blood.” He also oversaw the launch of HBO Now, the standalone subscription streaming service.

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“Hard as it is to think about leaving the company I love, and the people I love in it, it is the right time for me to do so,” Plepler wrote in a memo to staff as reported by Variety. “In the past weeks, I’ve thought a lot about the incredible journey of this company in the nearly 28 years that I have been blessed to be here. It’s a journey of great pride and accomplishment because so many of you, and many others before us, have made HBO a cultural and business phenomenon.”

Plepler’s departure comes 48 hours after a federal appeals court upheld AT&T’s $85 billion acquisition of Time Warner. It also comes a day after AT&T CFO John Stephens told an investor group that the telecom’s senior management did not wish to upend the culture at the entertainment unit that includes HBO, Warner Bros. and Turner with further personnel changes.

“They [had] a CFO [Howard Averill] and we have a CFO. Those kinds of head-counting synergies have been achieved,” Stephens said.

Of course, the handwriting was on the wall ever since AT&T first closed the acquisition last summer. Stankey, in a town hall meeting with employees and Plepler, strongly intimated that the status quo at HBO would not continue.

The executive said he sought to make HBO programming habitual in a market driven by portable devices that capture consumer attention “every 15 minutes.”

“It’s going to be a tough year,” Stankey said at the time. “It’s going to be a lot of work to alter and change direction a little bit.”

 

CFO: WarnerMedia Asset Better Than Expected; Disney Eyeing AT&T’s Hulu Stake

A day after a federal appeals court ruled in favor of AT&T’s $85 billion acquisition of Time Warner, resulting in the creation of WarnerMedia, CFO John Stephens said ownership of the parent to Warner Bros., HBO and Turner has been a fiscal home run.

“It’s turned out to be an asset that may be better than we expected. And we expected a lot,” Stephens told an investor group.

Speaking Feb. 27 at the Morgan Stanley technology, media and telecom conference in San Francisco, Stephens attempted to shoot down media speculation that layoffs and additional cost cutting would occur following the court’s decision.

“We’ve been very careful to set up a separate operating unit [with WarnerMedia] that’s a lot like Time Warner,” he said. “We wanted to protect the culture, we [didn’t] want a finance bean counter from a telephone company go in to what is a tremendously good asset.”

Stephens said results over the past nine months at WarnerMedia have been “consistently” good. They continue to generate cash, they continue to generate value, produce some great-value content.

“The performance of the people at Time Warner … I couldn’t be more pleased with,” he said.

Indeed, through Feb. 24, Warner Bros., led by Aquaman and Clint Eastwood’s The Mule, continues to top all studios at the domestic box office with 22.4% market share and $313.4 million in revenue, according to BoxOfficeMojo.com.

“They continue to generate cash, they continue to generate value … produce some great-value content,” Stephens said. “Sharing that really high-quality content is important.”

From a M&A perspective, he said supply-side integration, marketing, data analytics would be combined without infringing upon WarnerMedia’s culture.

“They [had] a CFO [Howard Averill] and we have a CFO. Those kinds of head-counting synergies have been achieved,” Stephens said.

Stephens said he expects the final season of “Game of Thrones” to drive HBO Now subscribership. He said AT&T is considering putting HBO on unlimited mobile wireless packages – with the increased revenue used to fund additional content spend.

“There’s benefits there that can fund some of those things,” Stephens said. “We want to have that same kind of [‘Thrones’] excitement year round.”

Separately, Disney is reportedly in discussions with AT&T to acquire its 10% stake in Hulu. When combined with Fox’s 30% interest, Disney could control 70% of the SVOD and online TV platform, along with Comcast’s 30% stake.

 

 

 

 

Appeals Court Denies DOJ Bid to Block AT&T’s $85 Billion Time Warner Purchase

A federal appeals court Feb. 26 ruled against the Justice Department’s attempt to block AT&T’s $85 billion acquisition of Time Warner, which led to the formation of WarnerMedia.

The court found that a lower court judge’s decision last summer approving of the transaction did not violate antitrust guidelines.

“The judgment of the district court appealed from this cause is hereby affirmed,” the court wrote in its ruling.

The Justice Department had argued that the merger would enable AT&T, which also owns DirecTV, to leverage its stake in the satellite operator to force pay-TV competitors to pay more for content from Warner Bros., HBO and Turner, which includes CNN.

Some observers speculated the government’s attempt to block the deal revolved more around President Trump’s openly hostile approach to CNN, which he has labeled “fake news,” and, along with other media outlets not named Fox News, an “enemy of the people.”

Indeed, the DOJ’s legal challenges represented the first to a corporate vertical merger in four years.