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Tag: John Stankey

  • Discovery, AT&T close in on WarnerMedia transaction

    Discovery, AT&T close in on WarnerMedia transaction

    Mumbai: Discovery Inc and AT&T have announced that they have closed their transaction to combine the WarnerMedia business with Discovery. The combined entity is a premier standalone global media and entertainment company Warner Bros Discovery, which will begin trading on the Nasdaq with the start of trading on 11 April, under the new ticker symbol ‘WBD.’

    The new company combines WarnerMedia’s premium entertainment, sports and news assets with Discovery’s leading non-fiction and international entertainment and sports businesses, including Discovery Channel, discovery+, Warner Bros. Entertainment, CNN, CNN+, DC, Eurosport, HBO, HBO Max, HGTV, Food Network, Investigation Discovery, TLC, TNT, TBS, truTV, Travel Channel, MotorTrend, Animal Planet, Science Channel, New Line Cinema, Cartoon Network, Adult Swim, Turner Classic Movies and others.

    “Today’s announcement marks an exciting milestone not just for Warner Bros Discovery but for our shareholders, our distributors, our advertisers, our creative partners and, most importantly, consumers globally,” said Warner Bros Discovery CEO David Zaslav. “With our collective assets and diversified business model, Warner Bros Discovery offers the most differentiated and complete portfolio of content across film, television and streaming. We are confident that we can bring more choice to consumers around the globe while fostering creativity and creating value for shareholders.”

    “We are at the dawn of a new age of connectivity, and today marks the beginning of a new era for AT&T,” stated AT&T CEO John Stankey. “With the close of this transaction, we expect to invest at record levels in our growth areas of 5G and fiber, where we have strong momentum, while we work to become America’s best broadband company. At the same time, we’ll sharpen our focus on returns to shareholders. We expect to invest for growth, strengthen our balance sheet and reduce our debt, all while continuing to pay an attractive dividend that puts us among the top dividend-paying stocks in America.”

    Under terms of the agreement, which was structured as a Reverse Morris Trust transaction, at close AT&T received $40.4 billion in cash and WarnerMedia’s retention of certain debt. Additionally, shareholders of AT&T received 0.241917 shares of WBD for each share of AT&T common stock they held at the close. As a result, AT&T shareholders received 1.7 billion shares of WBD, representing 71 per cent of WBD shares on a fully diluted basis. 

    Discovery’s existing shareholders own the remainder of the new company. In addition to their new shares of WBD common stock, AT&T shareholders continue to hold the same number of shares of AT&T common stock they held immediately prior to close.

  • AT&T to spin off its interests in WarnerMedia in $43 bn transaction

    AT&T to spin off its interests in WarnerMedia in $43 bn transaction

    Mumbai: AT&T has announced that it will spin off 100 per cent of its interest in WarnerMedia to AT&T’s existing shareholders in a pro-rata distribution, following the merger of WarnerMedia with Discovery, which is expected to close in the second quarter of 2022.

    Following the closing of the transaction, the Warner Bros Discovery Inc common stock is expected to be listed on the NASDAQ global select market under the ticker ‘WBD.’ The new company’s board of directors will consist of 13 members, seven initially appointed by AT&T, including the chairperson of the board. Discovery has designated six members, including CEO David Zaslav.

    Discovery president and CEO David Zaslav will lead WBD with a best-in-class management team and operational and creative leadership from both companies.

    AT&T’s board of directors has approved an expected post-close annual dividend of $1.11 per AT&T share to account for the distribution of WarnerMedia to AT&T shareholders and to size the annual dividend payout at approximately 40 per cent of the projected free cash flow to enable investment in attractive opportunities.

    AT&T will receive $43 billion (subject to working capital and other adjustments) in a combination of cash and other consideration and AT&T’s shareholders will receive a stock representing 71 per cent of the new company, Warner Bros. Discovery Inc. on a fully diluted basis. Existing Discovery shareholders will own approximately 29 per cent of the new company on a fully diluted basis.

    On the closing date of the transaction, each AT&T shareholder will receive, on a tax-free basis, an estimated 0.24 shares of the new WBD common stock for each share of AT&T common stock held as of the record date for the pro-rata distribution. The exact number of shares of WBD to be received by AT&T shareholders for each AT&T common share will be determined closer to the closing based on the number of shares of AT&T common stock outstanding and the number of shares of Discovery common stock outstanding on an as-converted and as-exercised basis. AT&T has approximately 7.2 billion fully diluted shares outstanding.  

    AT&T shareholders will continue to hold the same number of shares of AT&T after the transaction closes.

    In connection with the transaction, all classes of shares of Discovery capital stock will be converted and reclassified into common shares of WBD with one vote per share.

    No action is required by AT&T’s shareholders to receive shares of WBD common stock in the merger when it occurs. The closing of the transaction remains subject to satisfaction of certain conditions, including obtaining all necessary regulatory approvals.

    “In evaluating the form of distribution, we were guided by one objective — executing the transaction in the most seamless manner possible to support long-term value generation,” said AT&T CEO John Stankey. “We are confident the spin-off achieves that objective because it’s simple, efficient and results in AT&T shareholders owning shares of both companies, each of which will have the ability to drive better returns in a manner consistent with their respective market opportunities.

    “We believe that the remaining AT&T and the new WBD are two equities that the market will want to own and the markets to support those equities will develop,” Stankey said. “Rather than try to account for market volatility in the near-term and decide where to apportion value in the process of doing an exchange of shares, the spin-off distribution will let the market do what markets do best. We are confident both equities will soon be valued on the solid fundamentals and attractive prospects they represent.”

    AT&T will continue to trade on the NYSE under the ticker ‘T.’ The company will host a virtual investor conference on 11 March at which it will provide additional insight and expectations for the financial and operational performance of AT&T’s communications segment following the close of the pending WarnerMedia transaction.

  • AT&T likely to close WarnerMedia-Discovery merger by June-end

    AT&T likely to close WarnerMedia-Discovery merger by June-end

    Mumbai: US major AT&T has reported its fourth-quarter financial results on Wednesday. The company’s WarnerMedia segment posted revenues of $9.9 billion, a growth of 15.4 per cent year-on-year driven by content licensing and direct-to-consumer subscription growth. The company said that it expects the WarnerMedia-Discovery transaction to close by the second quarter of 2022.

    “We are encouraged with how the process for the WarnerMedia deal is progressing and now expect the transaction to close in the second quarter,” said AT&T CEO John Stankey. “Coming off an outstanding year with HBO Max, we plan to hand off the business with a strong exit velocity, and we look to further our international momentum and deliver more world-class content for viewers.”

    He further added, “When the deal closes, the investments made in both content and HBO Max growth, coupled with strong execution by the team, will ensure Warner Bros Discovery is positioned as a leading global media company with the depth of content and the capabilities required to lead in the next era of media.”

    WarnerMedia’s streaming service HBO Max added 13.1 million subscribers in 2021 and currently has a base of 73.8 million subscribers globally. The investor presentation also revealed that WarnerMedia saw a DTC subscription revenue growth of 11.5 per cent from $1.7 billion to $1.9 billion in the fourth quarter.

    In May 2021, AT&T announced that it had proposed a merger between Discovery Inc and its media subsidiary WarnerMedia, which would be spun off into a new publicly-traded company to be known as Warner Bros Discovery. The merged entity would be led by Discovery CEO David Zaslav. The transaction was approved by the European Commission in December 2021 and it is expected to be completed in mid-2022.

  • AT&T – DirecTV’s $48.5 billion merger gets FCC nod

    AT&T – DirecTV’s $48.5 billion merger gets FCC nod

    MUMBAI: The Federal Communications Commission (FCC) has granted the approval of the transfer of control of licenses and authorizations from DirecTV to AT&T Inc. 

     

    The approval will allow AT&T to acquire DirecTV for a sum of $48.5 billion and merge the two companies into one combined entity. 

     

    FCC chairman Tom Wheeler said that he had approved the deal with certain conditions, which are applicable for the next four years. 

     

    The newly combined company – the largest pay TV provider in the United States and the world – will offer millions of people more choices for video entertainment on any screen from almost anywhere, any time. 

     

    “Combining DirecTV with AT&T is all about giving customers more choices for great video entertainment integrated with mobile and high-speed Internet service. We’ll now be able to meet consumers’ future entertainment preferences, whether they want traditional TV service with premier programming, their favorite content on a mobile device, or video streamed over the Internet to any screen. This transaction allows us to significantly expand our high-speed Internet service to reach millions more households, which is a perfect complement to our coast-to-coast TV and mobile coverage,” Stephenson said. “We’re now a fundamentally different company with a diversified set of capabilities and businesses that set us apart from the competition,” said AT&T chairman and CEO Randall Stephenson. 

     

    AT&T now is the largest pay TV provider in the US and the world, providing service to more than 26 million customers in the US and more than 191 million customers in Latin America, including Mexico and the Caribbean. Additionally, AT&T has more than 132 million wireless subscribers and connections in the US and Mexico; offers 4G LTE mobile coverage to nearly 310 million people in the US; covers 57 million US customer locations with high-speed Internet; and has nearly 16 million subscribers to its high-speed Internet service. 

     

    Current customers of AT&T and DirecTV do not need to do anything as a result of the merger. They’ll continue to receive their same services, channel lineups, and customer care. The integration of AT&T and DirecTV will occur over the coming months. In the coming weeks, AT&T will launch new integrated TV, mobile and high-speed Internet offers that give customers greater value and convenience. 

     

    With the completion of its DirecTV acquisition, AT&T will continue to deploy its all-fiber GigaPower Internet access service – the company’s highest-speed Internet service, which allows you to download a TV show in as little as three seconds. When the expansion is complete, AT&T’s all-fiber broadband footprint will reach more than 14 million customer locations. 

     

    AT&T also announced that John Stankey will be CEO of AT&T Entertainment & Internet Services, responsible for leading its combined DirecTV and AT&T Home Solutions operations. Stankey will report to Stephenson. DirecTV president, chairman and CEO Mike White will now retire. 

     

    “Mike is one of the world’s top CEOs and a great leader who built DirecTV into a premier TV and video entertainment company spanning the US and Latin America. He has been a terrific partner and friend, and his legacy will be an important part of our combined company,” Stephenson said. 

     

    AT&T is also developing unique video offerings for consumers through, among other initiatives, its Otter Media joint venture with The Chernin Group. The joint venture was established to invest in, acquire and launch over-the-top (OTT) video services. This includes its purchase of a majority stake in Fullscreen, a global online media company that works with more than 50,000 content creators who engage 450 million subscribers and generate 4 billion monthly views. 

     

    Under the terms of the merger, DirecTV shareholders received 1.892 shares of AT&T common stock, in addition to $28.50 in cash, per share of DirecTV. 

     

    The DirecTV acquisition significantly diversifies AT&T’s revenue mix, products, geographies and customer bases. As a result of this acquisition, as well as AT&T’s acquisition of Iusacell and Nextel Mexico, AT&T expects that, by the end of 2015, its largest revenue streams will be, in descending order: Business Solutions (both wireless and wireline); Entertainment & Internet; Consumer Mobility; and International Mobility and Video. 

     

    As part of FCC’s approval of the transaction, AT&T has agreed to the following conditions for the next four years: 

     

    1) Within four years, AT&T will offer its all-fiber Internet access service to at least 12.5 million customer locations, such as residences, home offices and very small businesses. Combined with AT&T’s existing high-speed broadband network, at least 25.7 million customer locations will have access to broadband speeds of 45Mbps or higher. 

     

    2) Within its wireline footprint, the company will offer 1Gbps service to any eligible school or library requesting E-rate services, pursuant to applicable rules, within the company’s all-fiber footprint. 

     

    3) Within AT&T’s 21-state wireline footprint, it will offer discounted fixed broadband service to low-income households that qualify for the government’s Supplemental Nutrition Assistance Program. In locations where it’s available, service with speeds of at least 10Mbps will be offered for $10 per month. Elsewhere, 5Mbps service will be offered for $10 per month or, in some locations, 3Mbps service will be offered for $5 per month. 

     

    4) AT&T’s retail terms and conditions for its fixed broadband Internet services will not favor its own online video programming services. AT&T can and will, however, continue to offer discounted integrated bundles of its video and high-speed Internet services. 

     

    5) AT&T must submit to the FCC new interconnection agreements it enters into with peering networks and on-net customers for the exchange of Internet traffic. The company will develop, in conjunction with an independent expert, a methodology for measuring the performance of its Internet traffic exchange and regularly report these metrics to the FCC. 

     

    6) AT&T will appoint a Company Compliance Officer to develop and implement a plan to ensure compliance with these merger conditions. Also, the company will engage an independent, third-party compliance officer to evaluate the plan and its implementation, and submit periodic reports to the FCC.

  • AT&T to launch video service with Chernin Group

    AT&T to launch video service with Chernin Group

    NEW DELHI: American telecom service provider AT&T and The Chernin Group are acquiring, launching and investing in video services.

     

    It is understood that this will be more than a $500 million venture. The massive investment is seen as a response to the ongoing merger talks between Comcast and Time Warner Cable (TWC) and fiber-led Internet ambition of Google.

     

    AT&T announced its video investment plan hours after Comcast shared its Q1 2014 revenue that rose 13.7 per cent to $17.4 billion. Comcast Q1 income grew 16.3 per cent to $3.56 billion. Out of this, Cable Communications revenue increased 5.3 per cent.

     

    AT&T, which has invested more than $119 billion in the United States over the last six years, said it wants to tap the online video and OTT video market.

     

    Comcast, which is currently negotiating a $45 billion merger with TWC, said it added 124,000 cable customers in Q1 2014 and reached 26.8 million. It added 24,000 video customers in the first quarter of 2014. The company also added 383,000 high-speed internet customers. Internet revenue growth of 9 per cent is the strongest growth rate in two years.

     

    AT&T chief strategy officer John Stankey said: “Combining our expertise in network infrastructure, mobile, broadband and video with The Chernin Group’s management and expertise in content, distribution, and monetization models in online video creates the opportunity for us to develop a compelling offering in the OTT space.”

     

    One-day before the video announcement, AT&T said it would expand its high speed internet network to an additional 21 cities in the American internet network. It also suggested that the online video venture will make AT&T a leader in the American broadcasting industry. It seems internet search engine Google may not be the big rival for AT&T, but Comcast and others.

     

    The Chernin Group, which invests in media businesses, brings assets and expertise to the venture, including contribution of its majority stake in Crunchyroll, a subscription video on demand service.

     

    This alliance positions AT&T and The Chernin Group to take advantage of the rapid growth of online video and OTT video services. The strategic goal of this initiative will be to invest in advertising and subscription VOD channels as well as streaming services.

     

    AT&T has over 110 million wireless subscribers and more than 16 million total broadband subscribers. Video makes difference to better customer experience. At present, Google and AT&T are competing in high speed internet network roll outs. AT&T will benefit from video as it will compensate possible revenue loss from voice services.