AT&T CEO Randall Stephenson Bets Big With Time Warner Deal
October 21 2016 - 6:01PM
Dow Jones News
By Thomas Gryta
Chief Executive Randall Stephenson is on the brink of leaving an
indelible mark on AT&T Inc.
The carrier is in advanced talks to purchase Time Warner Inc.,
The Wall Street Journal has reported, and a deal could come
together within days.
By making that offer, Mr. Stephenson is setting up the former
regional telephone company to be a major media conglomerate that
would combine millions of wireless and pay-television subscribers
with a big store of content from HBO to CNN, from Warner Bros.
Pictures to DC Comics.
It would be the biggest deal in his nine-year tenure as CEO. If
he can get a final agreement with Time Warner and get it past
federal regulators, the 56-year-old Oklahoma native will have shown
that he has carried on the deal-making tradition of former CEO Ed
Whitacre.
But unlike Mr. Whitacre, Mr. Stephenson will have grown AT&T
-- which had $146 billion in revenue last year -- by venturing
outside of telecommunications and into television and video. Last
year, AT&T made a bet on pay-television buying satellite
operator DirecTV for $49 billion and turning it into the nation's
biggest pay-television company in addition to the second-largest
wireless operator.
"Now you think about the new world we're in of video, we feel
really strong that we are going to have a competitive cost
structure, a best-in-class cost structure around the largest
element, and that's content," Mr. Stephenson said last month.
Mr. Stephenson, the son of a cattle-feed lot owner, joined
AT&T in 1982, fresh from earning a master's degree in
accounting from the University of Oklahoma. He started in the
information-technology department of Southwestern Bell, which
eventually evolved into modern AT&T. He then spent years
working in various finance roles until he was transferred to Mexico
in 1992 to work with billionaire Carlos Slim as the company's top
finance executive for the region.
Upon returning from Mexico after four years, fluent in Spanish,
Mr. Stephenson's career accelerated. He became chief financial
officer in 2001 and Mr. Whitacre's top lieutenant as chief
operations officer in 2004, a time when the company was making some
of its largest deals, including AT&T Wireless, AT&T Corp.
and BellSouth.
His first major deal came almost four years after taking the
reins in 2007 when he tried to acquire T-Mobile US Inc. for $39
billion. Regulators fought the deal, and ultimately sued to block
it, giving Mr. Stephenson a black eye and putting the company on
the hook for a massive breakup fee in cash and spectrum.
Being locked out from further consolidation in the U.S. wireless
market, he looked overseas for potential deals, even putting
Vodafone Group PLC in his company's sights. After Comcast Corp.
tried to buy Time Warner Cable in early 2014, he saw an opening to
get a U.S. deal done and his thinking shifted toward video.
AT&T talked to Dish Network about an acquisition, but the
DirecTV takeover came together quickly.
Now, less than 18 months after the DirecTV deal closed, Mr.
Stephenson is looking to snag his next big deal.
"In this industry, if you can achieve scale, and manage scale
and complexity, it's a massive competitive advantage," Mr.
Stephenson said at the investor conference.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
October 21, 2016 17:45 ET (21:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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