Why AT&T Isn’t Selling HBO


Apr. 18 2019, Published 10:40 a.m. ET

HBO Europe

AT&T (T) said this month that it’s not planning to sell its HBO business in Europe, contrary to media reports. The Financial Times reported that AT&T had discussed selling HBO Europe to raise funds toward reducing its debt, which stood at nearly $170 billion at the end of 2018. AT&T recently sold its 10% stake in video streaming service Hulu for more than $1.4 billion, and it’s talked about divesting its nonessential businesses to raise more funds to reduce its debt pile and reinvest in its more promising businesses.

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As for HBO, AT&T says it has no plans to sell the business. According to a statement cited by Reuters, John Stankey deemed the Financial Times’ report about the HBO Europe sale baseless and inaccurate. Stankey heads AT&T’s WarnerMedia division, under which HBO operates. According to the executive, HBO Europe is a valuable asset in terms of WarnerMedia’s growth plans in Europe.

WarnerMedia contributed 19% of AT&T’s revenue

WarnerMedia, which is planning to launch a new video streaming service in the coming months, is central to AT&T’s efforts to diversify its business outside the wireless market. As the wireless market in the United States has become saturated and room for growth has narrowed, wireless providers Verizon (VZ) and T-Mobile (TMUS) are also seeking new revenue sources, and the media industry looks attractive. Verizon runs a digital media unit made up mostly of Yahoo’s and AOL’s assets. On its part, T-Mobile is planning to launch a TV service later this year.

WarnerMedia generated revenue of $9.2 billion in the fourth quarter, thereby contributing 19% of AT&T’s total revenue.

Comcast wants to buy HBO Europe

If HBO Europe is put up for sale, Comcast (CMCSA) might be interested in buying it, according to the Financial Times. Last year, Comcast battled Fox Corporation (FOXA) and the Walt Disney Company (DIS) over European broadcaster Sky, prevailing in a special auction overseen by British regulators as it sought to extend its global footprint.


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