CNN’s Poppy Harlow Challenges AT&T CEO on Offloading CNN/Warner Media Just Three Years Later: ‘Was the Acquisition a Mistake?’
CNN’s Poppy Harlow challenged AT&T CEO John Stankey about this morning’s news that the telecom giant is spinning off WarnerMedia assets (which includes CNN) just three years after acquiring them.
News broke Monday morning that CNN’s parent company Warner Media is joining forces now with Discovery as AT&T looked to spin off its media assets. The mega-media merger is worth tens of billions of dollars and has huge implications for the future of the streaming business as well as the oversight of CNN.
Starkey and Discovery CEO David Zaslav (who is set to run the new company) appeared on CNN Monday morning to discuss the new business venture and its implications for streaming media in general. Zaslov is set to oversee the new venture, and when asked about his vision, went out of his way to laud current CNN CEO Jeff Zucker, perhaps signaling a desire to keep him running the cable news net.
But Harlow bravely noted how AT&T just completed the acquisition of TimeWarner media assets in 2018, when they were valued at a much higher price than they are now. “You fought, I mean, incredibly hard for, and through the courts, you know, over $80 billion deal,” she noted. “And now for about 38 billion dollars less, you are ….offloading is not the right word, but it’s 38 billion dollars less than you are now valuing … the Warner Media empire.”
“What did you learn from this?” Harlow asked the AT&T CEO. “Was the acquisition a mistake?”
“First of all, I’m going to contest the numbers,” Stankey replied. “I don’t think that is actually correct.”
He then explained that in his mind, “a closer comparison is $100 billion for the original Time Warner acquisition, and you look at taking this to Discovery’s multiple, and the debt we’re bringing back in $43 billion, you’re in the same neighborhood. But you don’t want to just conclude that’s the only return,” he continued to explain.
“There were cash flows generated over that period of time that the company and the shareholder got the benefit of. There were about five billion in transactions done on various assets that we monetized,” he continued. “And more importantly, AT&T shareholders taking 71% of this new company and part of why we’re doing this is to expose the media asset to the market so that rerates to the appropriate multiple that other media assets are selling. ”
Watch above via CNN.
