AT&T CFO Vows to Protect Culture at "Tremendously Good" WarnerMedia

AT&T CFO John Stephens

John Stephens also updated Wall Street on DirecTV and an upcoming SVOD from WarnerMedia.

"It was a very good day yesterday," AT&T CFO John Stephens told Wall Street analysts on Wednesday, a day after a unanimous panel of judges ruled against a government effort to undo the telecom giant's $85 billion merger with Time Warner.

Now called WarnerMedia, the asset is chugging along with several initiatives, the most meaningful being the creation of a Netflix competitor. "This will allow us to continue that work," the CFO said about Tuesday's ruling. "We'll be able to work with the assets in a variety of ways."

Referring to its next earnings report, Stephens noted,  "We've never had Warner in the first quarter before,"

The exec said AT&T set up WarnerMedia as a separate operating unit because "we wanted to protect the culture," adding: "A finance bean-counter from a telephone company doesn't want to go in and spoil what is a tremendously good asset."

Stephens was speaking at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco.

"We're going to continue to be very respectful of the fact that it's a different industry, a different culture, a different set of operations," he said of WarnerMedia.

AT&T's other primary entertainment asset, DirecTV, seems to be going through rough times amid cord-cutting.

Even DirecTV Now, the skinny bundle streamer, lost 267,000 subscribers in the most recent quarter, and Stephens said it was partially due to a price increase, from $35 a month to $40 a month.

The traditional DirecTV linear product lost 403,000 customers in the last quarter as the company got rid of steep discounts, and Stephens said to expect cost-cutting in the unit, including reining in the money it spends on content.

"We expect to continue to see some pressure on the customer counts in linear," he said. 

Concerning AT&T's upcoming SVOD initiatives, Stephens raved about Warner's library and added "some piece of live content could be included, where we have the ability to do that through a lot of owned and operated assets."

"There's more to come on that," he said.

"We got an asset that may be better than we had expected, and we expected a lot," Stephens said of the WarnerMedia acquisition.