Randall Stephenson, the AT&T chairman and chief executive who made its $85bn bet on entertainment with the acquisition of Time Warner, will hand over in July to John Stankey, the man charged with making the marriage of content and distribution work.
The end of Mr Stephenson’s 13-year tenure at the top of the US telecoms group was widely expected. Mr Stankey, his chief operating officer, had been viewed as the most likely internal candidate to replace him following the retirement of John Donovan, head of its telecoms division, last year.
The Time Warner deal represented the biggest bet on “convergence” — the union of telecoms and media assets, including HBO and CNN — in the history of the sector.
It has subjected AT&T to a greater level of scrutiny from politicians and the media and also drew the attention of Elliott Management, the activist shareholder. Elliott offered its backing for Mr Stankey, saying it supported the appointment.
“We have been engaged with the company throughout the search process, which was a robust one, including a range of highly qualified outside candidates and overseen by independent directors. We look forward to working with John as he begins his term as CEO,” it said in a statement.
US President Donald Trump, who has often lashed out at CNN, tweeted his hope that the appointment would herald a change in the cable network’s coverage of his administration.
“Great News! Randall Stephenson, the CEO of heavily indebted AT&T, which owns and presides over Fake News @CNN, is leaving, or was forced out. Anyone who lets a garbage ‘network’ do and say the things that CNN does, should leave ASAP. Hopefully replacement will be much better!” he said in his tweet.
The departure of Mr Stephenson, son of an Oklahoman cattle farmer, is the last piece in the changing of the guard in US telecoms. He follows John Legere, the brash T-Mobile US chief executive who landed a takeover of mobile rival Sprint before leaving, and Lowell McAdam, the former head of Verizon who handed over to Hans Vestberg 18 months ago, out the door.
Mr Stankey, 57, joined the group in 1985. Before becoming chief executive of its WarnerMedia arm his roles included chief strategy officer and chief technology officer. He will take the reins in July, with Mr Stephenson, 60, staying as executive chairman until January 2021, after which an independent director will take the chairmanship.
Mr Stephenson’s time at the helm has been marked by a series of megadeals, including the $48.5bn acquisition of DirecTV in 2014 and a $39bn bid for T-Mobile, which was later blocked by antitrust regulators.
When Elliott took a $3.2bn stake in the company last year it criticised his acquisition strategy, calling for a series of divestments to help reduce debt and return cash to investors.
In October AT&T reached a truce with the activist investor and agreed to sell up to $10bn worth of assets and reconfigure its board.
Speaking at a virtual annual meeting on Friday, Mr Stephenson said AT&T’s investments had positioned it well for the challenges of a pandemic that has strained broadband networks as millions of Americans work from home and driven up demand for premium streamed content.
“This didn’t just happen. Your company has invested hundreds of billions of dollars to make this connectivity possible,” he said, adding that AT&T had “invested more in the United States than any public company in any industry” since 2007.
AT&T ended the first quarter with about $10bn in cash. It has suspended share buybacks but intends to pay a dividend at a time when many companies are putting shareholder payouts on hold to preserve cash.
The group said its board began the succession planning process in 2017 and had spent the past five months reviewing external and internal candidates. “After an extensive evaluation, it was clear that John Stankey was the right person to lead AT&T into the future,” director Beth Mooney said in a statement.
Additional reporting by Nic Fildes
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