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AT&T CEO John Stankey Sees "Less Uncertainty" For Investors After Discovery-WarnerMedia Deal

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AT&T CEO John Stankey sees a period of "less uncertainty" ahead for the telecom giant as Covid-19 gradually eases and the spinoff of WarnerMedia is completed.

"If I think about where I sat last year, and maybe some of the anxiety and the pieces that had to be put in place," he said during an online appearance at Goldman Sachs's Communacopia conference. "My anxiety about showing up next year is not anywhere near what it was last year. I know the plays and I know what we need to do."

Noting the company's stagnant share price, he said "there's uncertainty that's hanging in the stock right now. Uncertainty because, will the [WarnerMedia-Discovery] transaction get approved in this regulatory environment, uncertainty because of forward-looking views on EBITDA, uncertainty about what the direct-to-market strategy will be for the media company that David talked about."

The CEO spoke just after Discovery chief David Zaslav also addressed the evolution of HBO Max and the company's planned combination with WarnerMedia. The new stand-alone entity Warner Bros Discovery is expected to start operating in mid-2022, pending regulatory approval of the $43 billion spinoff. AT&T also spun out DirecTV this year, closing a six-year chapter of fully owning the satellite TV operator. The ill-fated acquisitions of Time Warner and DirecTV cost investors about $50 billion.

While Stankey didn't mention his predecessor, Randall Stephenson by name, he spoke about becoming CEO in July 2020 and noted that several "not insignificant" moves have happened since. "I'm not hiding anything," he said in outlining the strategic shift that occurred during the leadership transition. There has been a "refocusing of where the business needed to be" over the past year-plus, he added.

The bulk of the session was devoted to AT&T's wireless and broadband businesses, which are taking center stage in the company's operations. Stankey said the federal infrastructure bill could be a boost . "I don't want to speculate" about whether the bill, a priority for President Joe Biden but a point of objection for many Republican lawmakers, will end up passing into law. "But if, in its current form, it actually does make its way into law, that's going to change the landscape in the broadband business in this country. It will also change my posture and point of view of where we should be playing as a company."

Stankey deferred to Zaslav multiple times about the future of HBO Max and WarnerMedia, but reasserted his belief that the streaming service can be competitive in the cutthroat field of subscription offerings, which has grown crowded with challengers to Netflix. "I wasn't pleased with where we were," he said of the reception on Wall Street to HBO Max. Today, after the launch of the lower-cost HBO Max with Ads and also the global expansion of the service, "it has a great future."

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