AT&T CFO John Stephens Ready to Talk to Activist Investor Elliott Management

AT&T
John Stephens

"We look forward to meeting with Elliott to discuss their ideas," the exec told an investors conference.

AT&T executive vp and CFO John Stephens on Wednesday said the phone giant is ready to sit down and talk to activist shareholder Elliott Management.

"Our board and our management routinely meet with investors and discuss ideas with them. We look forward to meeting with Elliott to discuss their ideas," Stephens told the Bank of America Merrill Lynch Media, Communications & Entertainment Conference in Beverly Hills in a session that was webcast.   

Investment firm Elliott Management Corp. on Monday said funds that it manages have acquired $3.2 billion of AT&T stock and called for changes at the telecom and entertainment giant, arguing that its acquisition strategy in particular has hurt the company's shares and performance.

Stephens added many of the ideas put forward by Elliott to unlock shareholder value had already been put into motion. "I feel strongly that our current strategy is the best way to create valued for our shareholders, and to maximize value," he argued.

The upcoming HBO Max streaming service was among the topics of debate, not least as it has been preceded by the telecom giant naming WarnerMedia CEO John Stankey to take on the additional roles of president and COO of AT&T, effective Oct. 1 and reporting to Randall Stephenson, AT&T chairman and CEO.

"When you think about what we're coming out with HBO Max, and tremendous distribution capabilities with network and wireline, and consumer distribution with 170 million subscriber relationships, and you think about pulling that in and the data and information into a consumer direct-to-consumer offering, it makes sense to have all that together," said Stephens.

Reporting to Stankey in an expanded role will be Jeff McElfresh, newly tapped as CEO of AT&T Communications — which serves 100 million mobile, broadband and pay TV customers in the U.S. as well as millions of business customers — his current WarnerMedia executive team and Brian Lesser, CEO of advanced advertising unit Xandr.

"Now is the time to more tightly align our collection of world-class content, scaled consumer relationships, technical know-how and innovative advertising technology," said Stephenson when Stankey's promotion was announced. "It’s the natural next step in bringing together the distinct and complementary capabilities of AT&T Communications, WarnerMedia and Xandr to deliver for consumers the benefits of a modern media company. AT&T is alone in the industry in being able to bring together these three great businesses for the launch of innovative consumer offers, relevant advertising and new entertainment services like HBO Max."

WarnerMedia is planning to launch the HBO Max streaming service in spring 2020 with library content and scripted originals, as well as content from the media giant's cable networks portfolio, including HBO, TNT and TBS. The direct-to-consumer platform will join Netflix, Amazon, Apple, Disney and NBCUniversal in the streaming wars.

Stephenson recently signaled that over time NBA and Major League League baseball games, now airing on TNT, Turner and other WarnerMedia platforms, could be headed to the streaming service further down the line. Said the exec, "This won't be at the early stages of HBO Max, but you can assume ultimately HBO Max will have live elements."