AT&T’s Stankey could become head of Time Warner: report

AT&T's John Stankey announces the company's tie-up with DirecTV after the deal completed in late 2015 in a screenshot from a promotional video. Image: AT&T
Image: AT&T

AT&T Entertainment Group CEO John Stankey could end up becoming the head of Time Warner should AT&T’s $85 billion acquisition bid go through.

The New York Post spoke with an unnamed source close to Stankey who described him as AT&T CEO Randall Stephenson’s “heir apparent” and as someone who is going to become “a very important man in entertainment.”

Of course, Time Warner CEO Jeff Bewkes has rebuked those notions -- which may have started with reports that we would leave following the merger. Bewkes said during an investor and media call with Stephenson that he would be staying on with the company and Stephenson added that he didn’t have any experience running a movie studio so he would definitely need someone like Bewkes around.

Nevertheless, questions abound with speculation also surfacing about what role Peter Chernin might play in a combined AT&T-Time Warner. Chernin heads The Chernin Group, which helps run a JV with AT&T designed around producing content for streaming services.

“They could put Peter in entertainment, and he reports to [the CEO], or Peter reports to John [Stankey,] or he continues to be a close advisor,” the source told the Post.

Of course, before any management team can be put in place for a combined AT&T-Time Warner, the deal has to clear a number of regulatory hurdles. Wells Fargo analyst Jennifer Fritzsche gives AT&T a good chance of closing the deal, particularly if the FCC does not get involved.

“Based on the current spread, the market seems to be pricing in only a 45% chance of this getting approved according to our risk / arb group. If the FCC is not involved, we think T has a very solid case to bring to the DoJ. If the FCC is involved, we still think T has a very solid case but the regulatory approval process and the politics of the review may be much more controversial and protracted,” wrote Fritzsche in an analyst note. “While we expect a DOJ to impose conditions as part of its review and approval of the deal, the DOJ blocking the merger outright would be somewhat precedent setting given that no vertical deal in the TMT space has been rejected by the DoJ. Since a new head of DoJ won't be in place until early 2017, a YE2017 closing may be somewhat optimistic.”