Stankey, 56, joined AT&T in 1985 and is a relative newcomer to Hollywood and the media content business. In entertainment circles, he gained notice in 2018 for delivering no-nonsense direction to HBO troops at a town hall meeting soon after the official closing of the $81 billion Time Warner deal. “We need hours a day,” Stankey said of HBO viewership. “It’s not hours a week, and it’s not hours a month. We need hours a day.”
Along with the Stankey promotion, AT&T also appointed current executive Jeff McElfresh as CEO of AT&T Communications as of October 1. McElfresh, who will report to Stankey, is replacing John Donovan, who announced his retirement last week. Communications is AT&T’s largest business unit and while its results have been solid on the telecom and mobile front, pay-TV has continued to prove a challenge.
AT&T acquired DirecTV in 2015 for $48.5 billion, but has seen its satellite base erode and newer extensions like AT&T Now (an internet-delivered bundle that launched as DirecTV Now in 2016) struggle to gain traction. While it was still digesting DirecTV, AT&T then embarked on the Time Warner takeover, a transaction that would end up taking more than two years of expensive and distracting legal wrangling to secure.
The management shakeup is also coinciding with a pitched battle to pay down debt. AT&T’s net debt load of $170 billion at the start of 2019 made it one of America’s most indebted companies. While some of the red ink has been erased through aggressive cost cuts and the sale of real estate holdings and other assets, the debt load remains a concern to many Wall Street analysts and investors. Shares in AT&T are up 19% in 2019 to date, but they are flat since the Time Warner acquisition was first proposed in October 2016.
“Now is the time to more tightly align our collection of world-class content, scaled consumer relationships, technical know-how and innovative advertising technology,” Stephenson said in a press release. “It’s the natural next step in bringing together the distinct and complimentary capabilities of AT&T Communications, WarnerMedia and Xandr to deliver for consumers the benefits of a modern media company. AT&T is alone in the industry in being able to bring together these three great businesses for the launch of innovative consumer offers, relevant advertising and new entertainment services like HBO Max.”
Of Stankey, Stephenson added, “John is an outstanding executive who has led nearly every area of our business, helped shape our strategy and excelled at operations throughout his career. The Board and I look forward to John hitting the ground running in his new role as president and COO.”
McElfresh, 48, has nearly 25 years of experience with AT&T in a variety of strategic, operational and technology leadership roles. Previously, he was president of AT&T Communications’ Technology and Operations group, where he led the company’s network, technology, cybersecurity, data and labs operations.