A Promotion for One of Donald Trump’s Punching Bags?
(Bloomberg Opinion) -- Jeff Zucker, the president of cable-news network CNN, is reportedly considered AT&T Inc.’s top internal candidate to become CEO of the entire WarnerMedia division. I can imagine what Donald Trump would make of this news. How should investors take it?
WarnerMedia houses CNN, HBO, Warner Bros. and other media properties that made up the former Time Warner Inc., which AT&T acquired last year. John Stankey, an AT&T veteran who’s been running the division, is soon taking on a larger role at the parent company, so putting someone else in charge makes sense. That’s especially true as AT&T gears up for an Oct. 29 investor day, during which it will unveil its streaming-TV subscription service HBO Max. It will be a pivotal moment that produces either more believers or more skeptics of AT&T’s plan to reinvent itself as an entertainment conglomerate and take on the likes of Netflix, Disney+, Apple TV+ and so on.
Zucker is the leading, if not sole, internal prospect to take the reins at WarnerMedia, according to NBC News, citing unidentified sources at the unit. There’s a reason for that: He’s practically the only top executive from Time Warner who has stayed on in the wake of the company’s sale to AT&T. Richard Plepler, the longtime head of HBO; David Levy, the former president of the Turner networks; and Warner Bros. CEO Kevin Tsujihara all made surprise departures this year, as AT&T sought to remove silos across the businesses and installed Stankey to oversee that effort. Stankey, a three-decade veteran of the phone company and self-described “Bell-head,” will become chief operating officer of AT&T next month. He’s also widely considered to be CEO Randall Stephenson’s heir apparent, though a somewhat controversial choice, as I explained last week.
While the Zucker news is merely speculation, it could portend another interesting development in the AT&T saga. That’s not just because, for Trump, Zucker is the personification of his arch-nemesis, CNN, and that Trump has called for Zucker’s firing. Zucker, who became CNN’s president in 2012 after a long run at NBCUniversal, has a mixed track record. His role at WarnerMedia was expanded to chairman of news and sports, while Bob Greenblatt, a respected former NBC executive, was put in charge of the entertainment and direct-to-consumer side of things. Zucker knows how to drive live TV ratings, though it’s less clear whether he has the creative eye to lead WarnerMedia into its streaming future, which centers on HBO and premium scripted content. It’s for that reason Plepler and Tsujihara may have been more obvious choices, were they still at the company.
Still, in the context of activist shareholder Elliott Management Corp.’s recent criticisms of AT&T and concern over what’s looked like a talent drain at WarnerMedia, installing Zucker as the division’s CEO could be well-received by investors and prove to be not a half-bad move by AT&T. There’s more to come on this front, but the wireless carrier’s new entertainment strategy is at least beginning to take shape. What kind of shape remains to be seen at next month’s investor day.
Tsujihara exited amid a scandal involving an actress with whom he was having an affair and was accused of helping to land film roles.
To contact the editor responsible for this story: Beth Williams at bewilliams@bloomberg.net
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Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.
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