T AT&T Inc

Kevin Tsujihara, who recently won expanded duties, resigns amid inquiry into his conduct

By Joe Flint 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (March 19, 2019).

AT&T Inc.'s WarnerMedia said Kevin Tsujihara is stepping down as chief executive of its Warner Bros. studio as the company investigates his relationship with a young actress, a change that roils the media giant's new leadership structure at a pivotal moment in the industry.

Mr. Tsujihara's resignation comes two weeks after he won an expanded role under a restructuring at AT&T's WarnerMedia unit. With his departure, all the top executives of the erstwhile Time Warner Inc. -- which AT&T acquired last year and renamed WarnerMedia -- are now gone.

WarnerMedia hasn't named a successor to Mr. Tsujihara.

A Hollywood Reporter article published earlier this month said Mr. Tsujihara had an extramarital relationship with actress Charlotte Kirk beginning in 2013. It cited text messages in which Mr. Tsujihara promised to make inquiries about casting her in roles at Warner, while expressing concerns that doing so could be dangerous for his career.

In a memo to staff Monday, Mr. Tsujihara wrote, "it has become clear that my continued leadership could be a distraction and an obstacle to the company's continued success."

In a separate memo he sent last week, Mr. Tsujihara apologized for "mistakes in my personal life that have caused pain and embarrassment to the people I love the most. I also deeply regret that these personal actions have caused embarrassment to the company and to all of you."

Mr. Tsujihara couldn't be reached for further comment. A spokeswoman for the studio referred to his Monday statement.

In a statement Monday, Ms. Kirk said she had nothing to do with the leaking of the text messages and the story that followed, which "refer to events from six years ago." Ms. Kirk reiterated her relationship with Mr. Tsujihara was consensual. She said, "I may have made some poor choices and I'm sorry for that, but I've learnt from my mistakes since then and grown a lot, as a person, as a woman, and as a professional actor."

Ms. Kirk previously said she had no claims against Mr. Tsujihara and that he didn't promise her anything. On Monday, she said, "I am deeply saddened to hear the news of Kevin Tsujihara stepping down at Warners. Our relationship ended many years ago. The release of the story by The Hollywood Reporter was nothing to do with me. In fact I tried to prevent it. Whatever differences we may have had in the past were long since forgotten. I only wish him the best of success in his future endeavors."

AT&T said it is investigating the matter with the help of an outside law firm.

"Kevin has contributed greatly to the studio's success over the past 25 years and for that we thank him," said WarnerMedia Chief Executive John Stankey, in a statement. "Kevin acknowledges that his mistakes are inconsistent with the company's leadership expectations and could impact the company's ability to execute going forward."

Mr. Tsujihara's exit follows the resignations earlier this month of the other two unit heads at the former Time Warner: Richard Plepler, chief of premium channel HBO, and David Levy, who ran the Turner cable TV networks.

Messrs. Plepler and Levy left WarnerMedia over concerns that Mr. Stankey's restructuring plans would reduce their influence, people familiar with their thinking said. Mr. Tsujihara was seen as one of the few winners among the old Time Warner guard. He was set to have an expanded portfolio, including oversight of animation businesses like Cartoon Network that were previously under Turner.

A change atop Warner is a significant setback for AT&T, given that it had just settled on its new leadership structure. As the company's factory of TV and movie content, Warner Bros. is central to AT&T's plans to launch a streaming-video service later this year to rival Netflix Inc. A new chief will be tasked with ensuring Warner's cupboards are stocked with hits for an intense period of competition.

Warner Bros. investigated allegations against Mr. Tsujihara twice, both before the deal closed and late last year after AT&T took over. The company didn't learn of the text messages implicating him until they appeared in the Hollywood Reporter, according to a person familiar with the probes.

One WarnerMedia executive said Monday, before the announcement, that if the company kept Mr. Tsujihara in place, it would be a bad message to send, given the public spectacle around the report and concerns internally about the lack of gender diversity in the company's upper ranks. Mr. Stankey and the company were criticized during a recent WarnerMedia town hall meeting about the lack of strong female leadership inside the company, according to people who attended.

Mr. Tsujihara joins a growing list of Hollywood executives whose sexual conduct has forced them from high-profile positions. The Warner CEO stands out from other cases, however, because his relationship was consensual and there have been no public allegations of harassment or assault against him.

Mr. Tsujihara had a career at Warner spanning a quarter-century. He joined in 1994 to help manage its interest in the Six Flags theme parks, and rose through the ranks to eventually take the helm at the studio's home-entertainment division, overseeing DVDs, digital distribution and videogames.

When studio chief Barry Meyer stepped down in 2013, Mr. Tsujihara won an internal competition to take over the post.

He has focused Warner's movie business on three key franchises: DC superheroes, the Harry Potter spinoff "Fantastic Beasts and Where to Find Them," and Lego. While the Lego movies have lost steam at the box office, "Fantastic Beasts" and DC films like "Aquaman" have done well, albeit not at the same blockbuster level as Disney's Marvel or Star Wars.

Within Warner's movie business, he was known for being more actively involved in creative decisions than his predecessor, frustrating some executives. But he has stepped back in the past year or two, people who work in the motion-picture unit said.

Warner Bros. Television, which is also under Mr. Tsujihara, has remained one of the most prolific producers of prime-time programming, despite not owning a big broadcast network to place content. It is a co-owner with CBS of the CW Network, and makes content for HBO as well as Netflix.

Mr. Tsujihara's departure came as a shock inside the Warner Bros. studio lot. He was a well-liked executive seen as accessible and fair in a town full of mercurial personalities.

The most senior executives who could take on greater responsibility while WarnerMedia determines new leadership for the studio include movie chief Toby Emmerich, Peter Roth, the head of Warner Bros. Television, and Pam Lifford, president of Warner Bros. Global Brands and Experiences, a person familiar with the matter said. Stacey Snider, who is leaving her post as head of Fox's movie unit, is the highest profile outside executive who has been mentioned in the past as a candidate for a top Warner Bros. position.

--Ben Fritz and Drew FitzGerald contributed to this article.

Write to Joe Flint at joe.flint@wsj.com

(END) Dow Jones Newswires

March 19, 2019 02:47 ET (06:47 GMT)

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