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AT&T CEO John Stankey has defended his decision to merge WarnerMedia with Discovery to allow the telecom giant to value its streaming service HBO Max like Netflix.
Stankey told the Goldman Sachs Communacopia Conference that investors were not giving HBO Max the market value it deserved, so it had to be separated out from AT&T to boost shareholder value. “I wasn’t pleased with where we stood,” he argued on how the investment community looked at HBO Max.
Introducing a different “investment thesis” with the planned Warner Bros.-Discovery business, Stankey said the new streaming platform would trade on financial markets more like a direct-to-consumer company, and not a legacy media cable TV as was the case now.
In mid-May, AT&T unveiled a deal to spin off WarnerMedia, merge it with Discovery and get $43 billion, in the process creating a new global content powerhouse with scripted and unscripted programming. AT&T will use the sale of its entertainment unit to reduce debt and focus on its connectivity business.
“They’ll have an incredible opportunity given the relevant position of both companies around the globe where Discovery is strong, where WarnerMedia is currently strong and to complement each other, to get that great global growth,” Stankey said on Tuesday.
He said HBO Max was poised to have 120 million to 150 million subscribers by 2025. “But we need that global momentum,” Stankey added.
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