AT&T CFO Wants A Cookie For Screwing Up The Time Warner, DirecTV Mergers
from the fail-upward dept
We’ve noted more than a few times how the AT&T Time Warner and DirecTV mergers were a monumental, historical disaster. AT&T spent $200 billion to acquire both companies thinking it would dominate the video and internet ad space. Instead, the company lost 9 million subscribers in nine years, fired 50,000 employees, closed numerous popular brands (DC’s Vertigo imprint, Mad Magazine), and basically stumbled around incompetently for several years before recently spinning off the entire mess for a song.
I just got done noting how the US press’ total failure to adequately outline the scope of this mess ensures that the executives, regulators, and various megamerger cheerleaders will never be held accountable for it. That, in turn, all but guarantees it will happen again. And again. And again. America’s obsession with “growth for growth’s sake” and megamergers is built on the inherent promise that no matter how many times a megadeal results in layoffs, chaos, and no benefits for anyone other than executives and investors, we’ll simply refuse to learn anything from the experience.
That requires a lot of revisionist history. So, as if on cue, AT&T CFO Pascal Desroches this week complained that AT&T didn’t get enough credit for turning HBO Max into a successful streaming brand. AT&T was forced to spin off this mess because the doddering telco sucked at running a media company. But Desroches is trying to claim the recent spinoff of its media ventures occurred because AT&T didn’t get enough credit for building HBO:
“AT&T CEO John Stankey was ?keenly focused on? the company being in the early stages of a ?significant evolution in connectivity,? 5G and fiber, with management knowing it needed to invest there and in HBO Max, he told the Oppenheimer Annual Technology, Internet & Communications Conference.
?One of the things we realized (was that), even though we were succeeding in our launch of HBO Max, the market wasn?t giving us the appropriate credit for it,? Desroches said.
This is a weird rewriting of history. Ex-AT&T CEO Randall Stephenson was literally shoved into early retirement because instead of focusing on the company’s core competencies (running and building networks; spying on Americans; lobbying the government to hamstring competition), AT&T blew an absolute ocean of money trying to elbow its way into the TV business. But like so many telcos (see: Verizon Go90), decades as a pampered government telecom monopoly leaves you ill-suited toward making adequate inroads in creative, competitive industries.
To be clear, AT&T’s path post-merger was pretty obvious. It had to take the HBO brand, not fuck it up, and shovel it into a functional streaming experience. But the company struggled for the first several years to do that. It released so many conflicting, confusing AT&T and HBO streaming brands that they even managed to confuse their own support employees. Meanwhile, AT&T executives, obsessed with engagement over quality, have taken the HBO brand and watered it down. Now you can see a lot of quality HBO fare like Six Feet Under intermingled with AT&T concepts like “Fuckboy Island,” which kind of speaks for itself.
If you actually talk to any of the creatives at places like DC or HBO (the ones who weren’t fired, anyway), they’re quick to point out that AT&T brass really had no idea what they were doing. It was like having an alleyway brawler run an opera house. Telcos aren’t good at adaptation, creativity, competition, or innovation, because as government-pampered monopolies, they’ve never had to be. I’m not sure how many times we have to watch a telco fall on its face in this fashion before that becomes clear to people.
The reality is that AT&T screwed up, then had to spin off the entire mess because it screwed up. For AT&T’s CFO to suggest the spin off was because the “market didn’t give us a cookie” for building HBO Max is some weird, revisionist history. Revisionist history that once again ignores the 50,000 post-merger(s) layoffs, the fact AT&T received billions from government to make all of this work (the $42 billion Trump tax cut, merger approvals, the death of net neutrality), and still somehow screwed it up. There is absolutely no scenario in which any AT&T executive involved in any aspect of this mess gets a cookie.