"I think that's the best way to judge what has happened." "The course they were on was not working," Bewkes said. The $43 billion deal is expected to close in the first quarter of 2022 and paves the way for one of Hollywood's biggest studios to compete with media giants Netflix and Disney. In May, AT&T announced it would spin off HBO and WarnerMedia in a deal with Discovery. Ultimately, it was another deal that would be seen as the best course for Warner content. In 2020, AT&T Warner Media CEO Jason Kilar said the company was going to streamline operations so it would be less confusing for the user and the company. AT&T's decisions led to the departure of handfuls of executives who questioned Stankey's knowledge of media and strategic confusion. " diverted management time and attention."Īt one point, HBO's former CEO Richard Plepler laid out a four-pillar plan for AT&T head John Stankey to execute in 2020. When a CEO thinks they can build and run a team to manage across disparate businesses it is likely to go wrong, Yale School of Management leadership expert Jeffrey Sonnenfeld recently told CNBC about the GE failures. "They needed people with management expertise, labor markets, financial markets," he said. Warren Buffett's Berkshire Hathaway, by contrast, has as a core principle in acquisitions of letting the management teams of the acquired firms continue to run the operations. In the GE case, specifically, leadership experts have said a fundamental flaw in the business model was thinking that GE management expertise was a business model and could be applied across unique operations. "We thought the reason for the merger was to activate this ad platform and consumer platform for HBO and Turner," he told CNBC.īewkes' complaints about the big management problem in ever-bigger companies is getting considerable airing lately as conglomerates from GE to Johnson & Johnson pursue break-ups plans. In "Tinderbox: HBO's Ruthless Pursuit of New Frontiers," authored by James Andrew Miller, Bewkes says the most revealing quote of all is from the AT&T C-suite which said after the deal, "if you pay a premium for a merger, you need to disrupt the company that you bought." According to AT&T data, global HBO Max and HBO subscriptions grew from just under 64 million to over 69 million during the first three quarters of this year. HBO Max launched in May 2020 and was accounted for the first time in AT&T's 2020 second quarter earnings. He cited the growth in HBO from a $6 billion subscription business that had plateaued to an $8 billion run rate business that has grown 15% year over year in 2021, while HBO Max grew 2x the number of subscribers since its launch (18 months) than HBO did in the prior 10 years. "I don't think it turned out as well as the street and we had hoped," Bewkes said.ĪT&T disagrees, with a spokesman telling CNBC that "the data/facts don't align with Jeff's narrative." The $85 billion deal gave AT&T ownership over cable channels like HBO and CNN, and the Warner Brothers film studio. Instead, they replaced our management with theirs." "Because didn't have network studios we thought they would let our people guide the process. "This is a natural fit between two companies with great legacies of innovation that have shaped the modern media and communications landscape, and my senior management team and I are looking forward to working closely with Randall and our new colleagues as we begin to capture the tremendous opportunities this creates to make our content even more powerful, engaging and valuable for global audiences," he said in the 2016 deal announcement.īut the October 2016 deal was not designed "for AT&T to manage the Time Warner networks better," Bewkes said on CNBC. At the time of the deal, Bewkes sounded more enthusiastic.
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