Randall Stephenson, executive officer of AT&T, exits federal court in Washington, D.C.
By Al Drago/Bloomberg/Getty Images.
AT&T technically won its battle to acquire Time Warner eight months ago, when a federal judge thwarted a Justice Department attempt to block the mobile behemoth’s $85 billion purchase of the company—now called WarnerMedia—that controls Turner Broadcasting, HBO, and Warner Bros. But it wasn’t until Tuesday, when the D.O.J. formally lost its appeal, that AT&T executives could finally breathe a sigh of relief and pop the Veuve.
Any jubilation, however, was accompanied by the more prosaic and bureaucratic issues of corporate re-structuring and governance. As AT&T’s chief executive, Randall Stephenson, recently told Peter Kafka, the Warner deal isn’t exactly standard M&A. New T&E guidelines and 401k plans are small bore when it comes to the marriage of the world’s largest mobile company and one of the culture’s most vaunted creative entities. HBO, in particular, could provide AT&T with that rare bird: a true first-screen property offering leverage against its competitors in the 5G era. Not surprisingly, throughout the appeal process, AT&T executives had been mostly quiet about their plans, aside from announcing an HBO-centric, direct-to-consumer streaming service at Vanity Fair’s New Establishment Summit in October.
Now, though, a fuller picture is coming into focus. The big chatter this week is that WarnerMedia C.E.O. John Stankey recently reached out to former NBC Entertainment boss Bob Greenblatt “to gauge his interest,” as The Hollywood Reporter put it in a Tuesday newsbreak, “in taking on a major role at the content division once the deal was approved.” Over at NBC News, Dylan Byers’s sources similarly dished that such a role would involve “overseeing the company’s creative content.” The most glaring question about an arrangement like this, if it comes to pass, is the implication for HBO chief Richard Plepler. After all, Plepler isn’t merely in charge of perhaps the most dynamic cultural product of our time; he also may be one of the few executives, along with Disney’s Bob Iger, who can undo Netflix’s Vulcan death grip on the streaming business.
When AT&T first sealed the deal, some wondered whether Stankey would give Plepler the autonomy to preserve HBO’s boutique, hit-making appeal, while also incentivizing him to substantially increase output in order to supercharge viewer engagement. For those skeptical of AT&T, the countervailing view was that Plepler was in the catbird seat. As one HBO producer told me last year, hypothesizing about the event of any heavy-handed meddling, “all the top creative executives would leave and where would AT&T be? They need this to work, and they can’t do that by blowing it up. That’s the insurance policy.” Plepler, for his part, has signaled that he’s on board with AT&T’s plans to ramp up original-programming hours. “We’re not going to say no to what we want to say yes to,” he recently told my colleague Joy Press. Nevertheless, the possibility of adding another well-regarded programming heavyweight to the WarnerMedia mix, in some top managerial capacity, has raised eyebrows.
Inside HBO’s corporate suite, it’s business as usual. Executives are preparing for this weekend’s premiere of the channel’s Michael Jackson documentary, and dealing with legal threats and a P.R. campaign from members of the Jackson family who are angry about the film. At the same time, HBO insiders apparently weren’t blindsided by Greenblatt’s name emerging in media reports. “That rumor had been rumbling for a bit now,” one said. Another told me that Greenblatt has been a rumored candidate to oversee the direct-to-consumer service specifically. Stankey talked about the platform in an internal video that was circulated several weeks ago, telling employees that AT&T is working to launch it in beta by the end of the year.
Beyond that, WarnerMedia staffers have mostly been reading tea leaves, and all signs suggest a desire for more integration between the company’s assets. Late last year, for instance, TNT-TBS chief Kevin Reilly was given the additional role of head of content for the streaming service. Similarly, in November, Stankey announced that Turner C.T.O. Jeremy Legg would now also oversee technology for HBO. The speculation among WarnerMedia insiders is that the Turner networks and HBO will eventually be compressed into a single, larger group. As a WarnerMedia source put it, “The likelihood that they’re gonna leave things where they are is probably nil. My feeling is that they’re looking for simplicity.” Another added, “It’s not just for simplicity’s sake. They want to put efforts and focus and spend into making content. They want to compete and win.”
As far as timing is concerned, I’m told that WarnerMedia’s management team has no intention of dragging things out. “The one thing that seems pretty clear,” one of my sources said, “is that they’re gonna make some decisions quickly.”
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