AT&T has finally got the US government off its back, but now the challenge of making a success of its mega-acquisition really begins.
Last week an appeal from the US Department of Justice to reverse the acquisition of Time Warner by AT&T, which completed in the middle of last year, was rejected and the DoJ decided not to appeal, so that seems to be the last of the US governmental opposition to it. Now we get to the small matter of absorbing a massive media company into an even bigger telecoms one and making a success of it.
Respecter of tradition as AT&T clearly is, the first step is a good old reorg. There’s nothing like hiring some fellow members of the CEOs golf club and drafting up a shiny new organogram to make you feel like you’re really getting somewhere and in that respect AT&T seems to have scored a hole in one.
The flagship appointment could also be viewed as a replacement since Richard Plepler, long time boss of arguably the most valuable component of the acquisition – HBO – decided to call it a day last week. It has been widely reported that this was the result of the kind of culture clash and competing visions that are typical of M&A, but it still feels like a major negative to lose someone with such rare experience of making and monetising premium content.
In retrospect the writing had been on the wall for a while. Last summer the AT&T lifer put in charge of WarnerMedia, indicated that he wanted to refocus on quantity of content, which usually means a reduced emphasis on quality. That’s not what HBO is about and all the talk in the world about big data and advertising won’t change that. HBO is a premium subscription model and AT&T would be unwise to think it knows better.
The person charged with reinventing the wheel is Robert Greenblatt, who was previously Chairman of NBC Entertainment. He will head up the entertainment and direct-to-consumer silos. Meanwhile Jeff Zucker is in charge of news and sports, which includes CNN, Kevin Tsujihara is in charge of kids content and Gerhard Zeiler is Chief Revenue Officer for WarnerMedia.
“We have done an amazing job establishing our brands as leaders in the hearts and minds of consumers,” said Stankey. “Adding Bob Greenblatt to the WarnerMedia family and expanding the leadership scope and responsibilities of Jeff, Kevin and Gerhard – who collectively have more than 80 years of global media experience and success – gives us the right management team to strategically position our leading portfolio of brands, world-class talent and rich library of intellectual property for future growth.”
“I’m honoured to be joining WarnerMedia during such an exciting time for the company and the industry as a whole, and I look forward to working alongside the many talented executives and team members across the company,” said Greenblatt, as convention demands. “WarnerMedia is home to some of the world’s most innovative, creative and successful brands and we’re in a unique position to foster even deeper connections with consumers. And it goes without saying I will always have a soft spot in my heart for HBO going back to the rewarding experience I had producing Alan Ball’s Six Feet Under.”
See? He’s all over this HBO shizzle. Thanks for everything Plepler, but I got this. To be fair Greenblatt he does seem to have pretty solid experience and is presumably a safe pair of hands, but if Stankey tells him to sacrifice quality for margin and the mass market he will presumably oblige. Telecoms is a very quantitative game and there is a real danger that AT&T will be culturally incapable of appreciating things that are harder to measure and for which the ROI is less immediate and demonstrable. If that turns out to be the case at least the former Time Warner people will be able to draw on their rich experience of failed M&A to help them.