from the everybody-is-to-blame-except-myself 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.
In a new book slated to be released next week, Time Warner CEO Jeff Bewkes didn’t hold back when talking about AT&T’s absolute incompetence at running a media empire:
“The most disappointing thing to me about the AT&T merger,” Mr. Bewkes is quoted in the book as saying, is that he and his board thought AT&T “would basically leave our people alone.” That didn’t happen, he said. “We didn’t think they would go to such a level of malpractice as to not listen to anybody? even though they themselves had no experience in those areas.”
Granted Bewkes was the one that proposed the sale of Time Warner and HBO to AT&T in the first place as a way to fend off a Rupert Murdoch News Corporation acquisition attempt. But if you’ve paid even the slightest bit of attention to U.S. telecom over the past 30 years, you quickly come to understand that US telecom a sector dominated by hubris and yes men and women who live in reality-optional bubbles. Being a government pampered monopoly creates an executive culture that’s not great at listening to or playing with others, and AT&T is the poster child.
Whether it’s Verizon’s Go90 or AT&T’s megamerger spree, the end result is always fairly consistent any time a telecom giant wanders outside of its core competencies (running networks and lobbying to dismantle competition and regulatory oversight). 50,000 people lost their jobs as a result of AT&T incompetence and hubris, and AT&T executives are still out there acting as if they are the victims. That’s the message again sent in the book by AT&T CEO John Stankey, who blames everybody but himself for the implosion:
“If you are in an acquisition and somebody pays a premium for your stock, by definition it means something has to change,” Stankey is quoted as saying in Miller’s book, according to the WSJ. “If you paid a premium for an operation and you continue to operate it exactly the same way, you never pay back the premium.”
Stankey also said that “he still believes in the vision behind AT&T’s purchase” but that he made the spinoff deal with Discovery in part because investors “refused to give us credit for [the] progress” made with Time Warner. “One of the jobs I need to do in carrying AT&T forward is ensuring we come up with a strategy that the investor base will tolerate and work through and give us the right credit for,” Stankey said.
This is the same AT&T that not only proposed but funded OAN as a facts option disinformation mill. It’s the same company that has repeatedly been caught ripping off customers, governments, and schools, and has spent decades engaging in sleazy lobbying tactics to protect its regional broadband monopoly. And it’s the same telecom industry that has failed repeatedly every single time they try something new (mobile payment systems, app stores, Millennial-targeting ad ventures, apps, whatever). Especially if it requires collaboration, competition, innovation, creativity, and adaptation.
Anybody surprised that myopic telecom monopoly executives wouldn’t be good at running a new media venture in a functional, competitive new market either wasn’t paying attention — or was just blinded by giant number signs.