Why AT&T’s New Structure Suggests Confidence in TWX Deal Approval


Aug. 31 2017, Updated 7:36 a.m. ET

Dual organization structure

Despite the AT&T-Time Warner merger review being wrapped in uncertainty, AT&T (T) is moving forward with the groundwork for a new corporate structure made up of Time Warner’s (TWX) assets.

AT&T is planning to run a dual organization structure following the closure of the proposed acquisition of Time Warner. Randall Stephenson will remain as the overall head of the combined company, but media and telecom operations will be separated into two distinct divisions led by two chief executives.

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AT&T seems interested in media independence

John Stankey, formerly the CEO (chief executive officer) of the Entertainment Group, will become the CEO of AT&T Media, which will include Time Warner’s assets such as HBO, Warner Bros, and Turner Cable, which runs CNN. John Donovan, who was formerly the chief strategy officer, will head AT&T Communications after the merger. The segment consists of wireless operations as well as the Entertainment Group, which includes DIRECTV.

A corporate structure like this would imply that AT&T wants to provide its news media operations the freedom it may require to be independent. Also, as per a few critics, when CNN comes under AT&T’s control, AT&T may attempt to exert editorial influence on CNN. President Donald Trump and CNN have shared a rocky relationship, and the president has repeatedly referred to the long-established news channel and media source as “fake news.”

Taking a page from Comcast

Comcast (CMCSA) is also running a dual organization structure, wherein its NBCUniversal and cable units are run by different executives who report to one overall CEO. In comparison, Verizon (VZ) has created a separate unit named Oath for its advertising and media business, which includes its recently acquired Yahoo assets.


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