AT&T CEO John Stankey Signals Exit From Entertainment, Telling Investors, “We’re Focused On Looking Forward”

John Stankey, who played a central role in AT&T’s push into entertainment before shedding of those money-losing assets as CEO, signaled a new day in his opening remarks at the company’s investor day.

“Today, we’re focused on looking forward,” he said. “We’re coming up soon on a big transition at AT&T: a more focused company, a more focused management team, a commitment to being the best with our resources aligned with that goal.”

For the last 18 months, “we’ve been positioning ourselves for this reality,” Stankey added, alluding to the spinoff of DirecTV and the imminent spin of WarnerMedia into a merged entity with Discovery. The $43 billion Warner-Discovery deal is expected to close next month. Last year, AT&T completed the spin of DirecTV into a stand-alone unit 30%-owned by private equity firm TPG.

Those ill-starred deals ended an unsuccessful foray into pay-TV and entertainment, which wound up costing investors tens of billions of dollars. With those assets off of its balance sheet — plus a number of other divestitures, of anime brand Crunchyroll and Latin American satellite TV operator Vrio — the company will return to its telecom roots.

“After retrenching from entertainment, we have more work to do to differentiate our connectivity,” he said. “We’re not talking about transformative M&A here. Instead, we’re focused on developing software and capabilities that lay on top of our network and optimize our connectivity value proposition.”

By the end of 2023, the company said it expects to reach $6 billion in run-rate cost savings. By the end of 2021, it reached more than $3 billion in cost savings, which it mostly plowed back into the business. Both spinoffs, as well as the sale of other assets, are helping AT&T chip away at its net debt, which was among the highest of any non-bank company after it closed the Time Warner acquisition in 2018. Total debt at the end of 2021 was $177.4 billion, $152.8 billion of which is categorized as long-term debt.