AT&T to re­or­ga­nize di­vi­sions af­ter buy­out of Time Warner

Northwest Arkansas Democrat-Gazette - - BUSINESS & FARM - SCOTT MORITZ

AT&T Inc. is plan­ning ma­jor or­ga­ni­za­tional changes af­ter the $85.4 bil­lion ac­qui­si­tion of Time Warner Inc., in­clud­ing a re­de­fined role for Chief Ex­ec­u­tive Of­fi­cer Ran­dall Stephen­son, as the telecom­mu­ni­ca­tions gi­ant morphs into a me­dia com­pany.

Stephen­son will over­see two CEOs who will in­de­pen­dently man­age the com­pany’s telecom­mu­ni­ca­tions and me­dia busi­nesses, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter. Stephen­son, 57, will still be the top ex­ec­u­tive of the com­pany, fo­cused on chart­ing the com­pany’s new course as a me­dia pow­er­house, the peo­ple said.

Stephen­son will re­main chair­man and CEO of AT&T, the com­pany said in a state­ment, deny­ing an ear­lier re­port by Bloomberg that he would re­lin­quish the CEO ti­tle.

John Stankey, who now leads DirecTV and other en­ter­tain­ment busi­nesses, will lead the me­dia divi­sion,

in­clud­ing Time Warner, said the peo­ple, who asked not to be iden­ti­fied dis­cussing pri­vate in­for­ma­tion. DirecTV will be­come part of a unit that in­cludes AT&T’s tra­di­tional phone busi­nesses, to be run by John Dono­van, the peo­ple said.

The re­or­ga­ni­za­tion, one of the largest at AT&T since “Ma Bell” was bro­ken apart by the U.S. gov­ern­ment into seven re­gional “Baby Bells” 33 years ago, mim­ics the struc­ture of other suc­cess­ful merg­ers of dis­parate busi­nesses, in­clud­ing Com­cast Corp.’s ac­qui­si­tion of NBCUniver­sal. By nam­ing two ex­ec­u­tives who can run their busi­nesses at arm’s length, AT&T could also ad­dress reg­u­la­tors’ con­cerns that the com­pany’s TV and broad­band net­works would fa­vor con­tent pro­duced by Time Warner’s HBO or Warner Bros.

Stephen­son and Time Warner CEO Jeff Bewkes are still work­ing on plans for im­ple­ment­ing the merger, said an AT&T spokesman. De­ci­sions about or­ga­ni­za­tional struc­ture and lead­er­ship haven’t yet been fi­nal­ized, the spokesman said. Bewkes has said he will stay on in some ca­pac­ity for at least a

year af­ter the merger is com­plete.

Bar­ring any ob­jec­tions from an­titrust reg­u­la­tors or in­ter­ven­tion by Pres­i­dent Don­ald Trump, who has pub­licly stated op­po­si­tion to the deal and has an on­go­ing quar­rel with Time Warner’s CNN, AT&T says it ex­pects the deal to close by year end.

The sep­a­ra­tion of AT&T’s new di­vi­sions will be both ge­o­graph­i­cal and cul­tural. The plan calls for AT&T to con­sol­i­date more of its ser­vice op­er­a­tions, like wire­less, in its Dal­las head­quar­ters, where Dono­van will be lo­cated. Glenn Lurie, who heads the wire­less busi­ness, will be among the ex­ec­u­tives re­lo­cat­ing to Dal­las from At­lanta.

Dono­van, who joined AT&T in the 2008 from In­ter­net-se­cu­rity firm Ver­iSign Inc., gained stature at the phone com­pany by con­vert­ing its com­plex, hard­ware-based net­work ar­chi­tec­ture to a sys­tem that could be con­trolled us­ing soft­ware and servers. This al­lowed cum­ber­some man­ual func­tions like in­creas­ing net­work ca­pac­ity to be more au­to­mated and in­stan­ta­neous, sav­ing time as well as equip­ment and la­bor costs.

Stankey, who has led nearly ev­ery ma­jor unit at AT&T in his three-decade ca­reer, will run the me­dia divi­sion from

his Cal­i­for­nia of­fice. The busi­ness, com­prised mostly of Time Warner, will stay in­tact with op­er­a­tions in New York and Los An­ge­les.

While Stankey is a loyal lifer at the phone com­pany, AT&T sees the split struc­ture as a way to pro­tect Time Warner’s Hol­ly­wood cul­ture, where cre­ativ­ity is prized, from the more bu­reau­cratic tra­di­tions of the Dal­las of­fice.

In its ap­proach to Time Warner’s in­te­gra­tion, AT&T is try­ing to mimic Berk­shire Hath­away Inc.’s man­age­ment style, said one per­son fa­mil­iar with the plan. War­ren Buf­fett, Berk­shire’s chair­man and CEO, is known for giv­ing ac­quired com­pa­nies a great deal of au­ton­omy rather than try to stan­dard­ize them.

The trans­fer of DirecTV, the satel­lite-TV provider ac­quired in 2015, to the tele­com busi­ness is one of the most sig­nif­i­cant changes in the re­struc­tur­ing. By mov­ing the divi­sion — the largest pay-TV ser­vice in the U.S. — out of Stankey’s purview, AT&T aims to ad­dress ques­tions about whether it can pro­vide com­peti­tors fair ac­cess to Time Warner’s ex­clu­sive shows, from CNN break­ing news to bas­ket­ball games on TNT to Game of Thrones on HBO.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.