Stephenson’s Friday announcement came months earlier than expected and several days after AT&T reported disappointing results in its Q1 earnings report, which included over 1 million television subscriber losses between the conglomorate’s AT&T TV Now, DirecTV, and U-Verse offerings. Stephenson, who served as AT&T CEO for 13 years, will remain the company’s executive chairman through January 2021.
Like most entertainment companies, AT&T’s stock has been trending downward in the last few months due to the financial pressures caused by the coronavirus pandemic. Though AT&T partially attributed its Q1 financial issues to the pandemic, the company’s pay-TV woes stretch back considerably further. AT&T has reported pay-TV subscriber hemorrhages in its last several quarterly earnings reports; the company lost more than 4 million TV customers in 2019.
AT&T has not offered a specific plan on resolving its pay-TV issues and has been primarily focused on launching its HBO Max streaming service on May 27. Some investors have pressured AT&T to sell DirecTV, and outspoken telecom analyst Craig Moffett told CNBC on Friday that AT&T’s DirecTV acquisition has been a “disaster.” As for HBO Max, the upcoming platform will cost $14.99 per month and will offer streaming of all HBO programming in addition to its own original series and other WarnerMedia networks like TNT, TBS, and more. AT&T has invested significantly in the platform, such as by acquiring the rights to “Friends” and “The Big Bang Theory.” Securing rights to the latter series reportedly cost more than $1 billion.
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The company acquired DirecTV in 2015 and completed its massive Time Warner acquisition in 2018. The Time Warner deal caused several notable executive shakeups at HBO; former CEO Richard Plepler, PR chief Nancy Lesser, president Simon Sutton, and head of global distribution Bernadette Aulestia all departed after the AT&T acquisition.
CNBC reported that AT&T ran a months-long search for Stephenson’s replacement but couldn’t find an outside executive who would satisfy hedge fund Elliot Management, which has been critical of AT&T’s management. The hedge fund has expressed public concerns about AT&T’s various acquisitions and remains skeptical about Stankey, according to CNBC. Regardless, Elliot Management said it supports Stankey’s promotion in a Friday statement. Stankey has served in various executive capacities at AT&T for 35 years and has worked in virtually every aspect of the conglomerate’s business.