AT&T CEO Will Lead Distinct Telecom, Media Units After Time Warner Merger -- 2nd Update

By Drew FitzGerald

AT&T Inc. plans to split the management of its telecom operations and its media assets after clinching a takeover of Time Warner Inc., putting veteran AT&T executive John Stankey in charge of the Time Warner business, according to people familiar with the matter.

The reorganization would create two divisions. One would contain AT&T's wireless business and its DirecTV satellite television business, the other would comprise the Time Warner assets it plans to acquire, including HBO, Warner Bros. and the Turner cable unit that houses CNN, the people said. AT&T last year said it would take control of the entertainment company in a cash-and-stock deal worth about $85 billion.

The new structure would keep AT&T Chairman and Chief Executive Randall Stephenson atop the company with two top lieutenants, in an organization that would resemble Comcast Corp. Brian Roberts, Comcast's chairman and chief executive, has two segment chiefs: one in charge of the cable business and the other heading NBCUniversal.

"Randall Stephenson will remain chairman and CEO after we close the Time Warner transaction," AT&T spokesman Larry Solomon said. He added that the company is still developing its integration plans and hasn't completed the new organizational chart.

Mr. Stankey, a 30-year AT&T veteran, is currently head of AT&T's entertainment business, which includes DirecTV and has offices near Los Angeles. He has previously served as the company's strategy chief and held various executive roles in its traditional telecom business.

Under the new structure, DirecTV would be combined with the company's telecom operations, which are run out of AT&T's Dallas headquarters and include both the wireless and landline business, the people familiar with the matter said. That segment would be run by John Donovan, another AT&T veteran who is currently chief strategy officer, one of the people said.

News of planned executive changes were earlier reported by Bloomberg News.

AT&T is still navigating a regulatory review of its proposed takeover of Time Warner, which President Donald Trump vowed to block when he was still a candidate for office. The Justice Department is conducting an antitrust review of the transaction. AT&T has said it expects the deal to be completed this year.

Companies often reorganize themselves to clarify lines of management before mergers to ease concerns about the independence of newly combined businesses and their effect on competition.

AT&T has hinted it will be more than just a passive owner of Time Warner's news and entertainment assets. Mr. Stephenson in May floated some ideas for the combination that included shorter, smartphone-friendly HBO videos and specially targeted advertising.

How Time Warner, as part of AT&T, might negotiate with the carrier's competitors is another potential concern. Mr. Stephenson addressed some of those fears in May by repeating his pledge to keep its most popular content available to all distributors.

"You can't think about taking 'Game of Thrones' and you're only going to make it available to AT&T customers," he said at the time. "That's crazy."

AT&T has started toying with special entertainment offers ahead of the deal's close. In April, it offered subscribers of its premium unlimited data plans free access to HBO, which normally costs $15 a month.

Write to Drew FitzGerald at andrew.fitzgerald@wsj.com

(END) Dow Jones Newswires

July 14, 2017 13:37 ET (17:37 GMT)

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