T AT&T Inc

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 (October 5, 2017).

AT&T Inc. Chief Executive Randall Stephenson said the telecommunications giant isn't looking to bring a "telephone company culture" to Time Warner Inc. and "really screw it up" after it closes its pending $85 billion acquisition of the media company.

Speaking at a conference Wednesday hosted by Vanity Fair in Beverly Hills, Calif., Mr. Stephenson said, "We are mindful that we are buying a business that we don't have a lot of experience." He added, "I am not a media tycoon" and won't be "reading scripts or anything."

AT&T's proposed acquisition of Time Warner, whose holdings include Warner Bros., HBO and CNN, is under review by the Justice Department, and people close to the process don't anticipate the deal to close until late October at the earliest. In a sign the review has reached an advanced stage, AT&T has discussed potential merger conditions with the government, people familiar with the situation have said.

During the 2016 presidential campaign, then-candidate Donald Trump spoke out against the deal, saying his administration wouldn't approve it because "it's too much concentration of power in the hands of too few." Antitrust enforcers ultimately make the decisions on mergers, though presidents can set the tone through appointments.

Mr. Stephenson also said he isn't planning on changing the leadership at CNN. The network and its president, Jeff Zucker, have been a target of Mr. Trump over its coverage of the administration. Mr. Stephenson stopped short of saying Mr. Zucker would definitely stay after the deal closes but said when AT&T acquires a company, it aims to retain successful management teams. CNN "is having a lot of success" and AT&T's goal is "to keep key talent in place," he said.

CNN also shouldn't play any part in the Justice Department's review of the acquisition, Mr. Stephenson said. "I don't understand what the relevance is of CNN to an antitrust review."

Mr. Stephenson said he believes that additional advertising revenue can be generated through more targeted commercials on Time Warner's Turner networks. AT&T monetizes ad revenue at its DirecTV unit at a rate two to three times greater than other media companies, he said, through its data on viewers and their location.

If AT&T is successful at boosting the value of advertising on the Turner networks, Mr. Stephenson said, one result hopefully would be fewer commercials. "One of my biggest frustrations in media and entertainment is the advertising load," he said.

As for consumers, Mr. Stephenson didn't promise lower prices but suggested it would be a possibility. He noted that prices were lowered when AT&T acquired DirecTV, and it was able to bundle telecom, broadband and video together.

"Why do Justice lawyers, antitrust lawyers, like vertical integration? Because you can do things for the customer that you couldn't have conceived of price-wise," Mr. Stephenson said.

--Drew FitzGerald contributed to this article.

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

(END) Dow Jones Newswires

October 05, 2017 02:47 ET (06:47 GMT)

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