AT&T CEO John Stankey Sees “No Surprises” As WarnerMedia-Discovery Deal Awaits Approval, No Letup In HBO Max “Foot Race” To Attain Scale

AT&T CEO John Stankey stated the approval course of for a deal to shed WarnerMedia and merge it with Discovery “is in keeping with what we’d have anticipated as we walked into it.”

Talking on the corporate’s third-quarter earnings name, the chief stated, “We’re transferring via the steps with the varied regulatory businesses within the U.S. and out of doors the U.S. These processes are transferring alongside on the tempo we’d have anticipated and we don’t see any surprises.” Regulators, he added, “are doing their typical thorough evaluation round that and we really feel actually comfy across the backwards and forwards of what’s been produced across the timelines and the milestones we’ve seen round these issues.”

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AT&T and Discovery introduced plans for the $43 billion mixture final Might, with Discovery CEO David Zaslav poised to take the helm of the brand new entity.

Whereas the overall define of the deal is obvious, some nitty-gritty monetary particulars – spin-versus break up, how it is going to be taxed, dividend payouts – aren’t but nailed down, and Wall Streeters on the decision had been antsy for specifics. Stankey stated that’s unlikely till the ultimate part, or “till we’re little additional alongside in that course of and have a point of visibility we all know there may be going to be a constructive” final result.

AT&T has seen its expectations upended earlier than, in fact. Recollections in Dallas are nonetheless recent from the U.S. Division of Justice’s Eleventh-hour antitrust lawsuit in 2017 over the corporate’s $85 billion buy of Time Warner. That mixture in the end survived the authorized problem, however solely after months of expensive delays, and ultimately shareholders had been saddled with tens of billions in losses from the acquisition.

Stankey stated it’s not but clear what the end result of the regulatory course of might be, including that visibility most likely received’t enhance till early 2022. Each corporations have repeatedly affirmed their expectation that the transaction will shut by the center of subsequent yr.

In the meantime, Stankey reassured analysts that regardless of the ready sport with WarnerMedia when it comes to M&A, HBO Max is continuous to be a key level of strategic emphasis. “We completely consider and did this transaction with the notion that we’re transferring this enterprise ahead in a direct-to-consumer market place and it’s required that you simply get to scale,” he stated. “We’re in a window right here the place it’s a foot race. It’s an vital race so there is no such thing as a pulling the foot off the accelerator. HBO Max is the muse of that enterprise transferring ahead and the way the mixed firm will proceed to go to market and every thing we do now to make that product higher and add prospects is a step in the precise route.”

HBO and HBO Max collectively had 69.4 million subscribers as of the tip of the third quarter, AT&T reported. The whole confirmed an total acquire of almost 2 million total regardless of a drop as anticipated within the U.S. of just about 2 million resulting from a shift off of Amazon’s Prime Video Channels platform. The efficiency of WarnerMedia helped the corporate put up total monetary outcomes that beat Wall Avenue analysts’ estimates.

When the Discovery deal closes, Stankey stated, “All of us need the shareholders that personal a considerable portion of that firm going ahead, to have a precious asset and one which grows and one which might be profitable within the subsequent era of media. We’ve got to do the precise issues now to verify the enterprise is effectively positioned to make that occur.”

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