Stephenson will be remembered as the executive who took AT&T to war with the Trump administration in a hard fought battle to acquire Time Warner. The $85-billion deal closed in the summer of 2018 after a court victory over the Department of Justice, which had opposed the merger. The combination gave AT&T a sweeping entertainment portfolio that it has restructured, realigned and re-topped after some longtime HBO and Turner executives from Richard Plepler to David Levy left in the shuffle.
Growth plans were thrown an unexpected curve ball with the coronavirus pandemic, which has temporarily killed live sports and advertising and theatrical revenue. The hit was apparent in AT&T’s quarterly numbers released Wednesday. The company is moving ahead with a May 27 launch of streaming service HBO Max.
It hasn’t always been smooth. Stankey remarked during the earnings call this week that, with theaters shuttered, Warner Bros. has been “re-thinking” the theatrical model and doesn’t expect exhibition to “snap back” anytime soon – comments he later felt the need to walk back, emphasizing the importance of theatrical release in the entertainment ecosystem.
The combined company also faced criticism for muhc of last year from activist hedge fund Elliott Managment. In October, the two sides reached a truce, with AT&T agreeing to split the chairman and CEO role, to tackle its debt (racked up from the merger), to add two new Elliott-approved directors and to boost profit targets for 2022. Stephenson said at the time the company had been planning to do most of those things already. In a statement Friday Elliott backed Stankey’s promotion.
“Elliott supports John Stankey as AT&T’s next CEO. We have been engaged with the company throughout the search process, which was a robust one, including a range of highly qualified outside candidates and overseen by independent directors. We look forward to working with John as he begins his term as CEO,” the firm said.
Stephenson’s retirement was announced at the company’s annual meeting of shareholders. The choice was not a surprise. Stankey had been promoted to COO of AT&T last fall, putting him in pole position as Stephenson’s successor.
Stephenson, 60, and chairman-CEO for the past 13 years, will serve as Executive Chairman of the Board of Directors until January to ensure a smooth transition.
Stankey, 57, joined AT&T in 1985 and has worked across its businesses from corporate strategy and technology, to operations and media and entertainment. He became CEO of WarnerMedia after the Time Warner merger, adding the COO later. On April 1, AT&T tapped Hulu co-founder Jason Kilar to take the reins at WarnerMedia starting May 1, paving the way for Stankey to move out of that role and into his CEO post in July.
AT&T called Stankey’s selection completes the final phase of a succession planning process that AT&T’s Board began in 2017, which included a thorough evaluation of internal and external candidates. Most recently, it said, the HR Committee — led by AT&T Director Beth Mooney, comprised entirely of independent directors and supported by outside consultants — engaged in an extensive five-month search process to ensure that the company’s next CEO possessed the vision, experience, talent and leadership qualities necessary to deliver on AT&T’s strategic plans.
“Leadership succession is one of the Board’s most important responsibilities,” Mooney said. “After an extensive evaluation, it was clear that John Stankey was the right person to lead AT&T into the future.”
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