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   Technology StocksAT&T

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To: Sr K who wrote (4233)12/17/2019 12:05:22 AM
From: robert b furman
   of 4269
Nice !!


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From: Jon Koplik1/29/2020 12:58:56 PM
   of 4269
Barrons -- AT&T’s Earnings Hit the Stock. Focus on the 3-Year Plan ................................

Jan. 29, 2020

AT&T’s Earnings Hit the Stock. Focus on the 3-Year Plan.

By Nicholas Jasinski

AT&T ended 2019 on a mixed note, with slight misses on revenue and steep subscriber losses at DirecTV, but having met debt-reduction goals and reiterated its 2020 outlook. The greater challenge lies ahead, as the telecom and media conglomerate aims to meet ambitious targets it has set for itself over the next three years.

Investors were uninspired by the results, sending AT&T stock (ticker: T) down 2.6% Wednesday morning. The S&P 500 was up 0.4%.

Before the market opened, AT&T reported 89 cents in adjusted earnings per share for the fourth quarter, a penny ahead of analyst expectations and up from 86 cents a year earlier. Revenue came in at $46.8 billion, about equal to analysts’ forecast and down from $48.0 billion in the year-earlier quarter. AT&T’s adjusted earnings before interest, taxes, depreciation, and amortization, or Ebitda, fell to $14.4 billion, from $15 billion last year. Wall Street consensus had been for $14.7 billion in adjusted Ebitda.

Investments in HBO Max -- ­a forthcoming direct-to-consumer streaming service from AT&T’s WarnerMedia division­ -- weighed on AT&T’s results because of $1.2 billion in foregone content-licensing revenue. HBO Max will debut this spring, entering a crowded market at a premium price of $14.99 a month.

AT&T’s weakest division remained DirecTV. The company’s Entertainment Group had 945,000 TV-subscriber cancellations in the fourth quarter, versus analysts’ forecast for a 739,000 loss but better than a nearly 1.2 million drop a quarter earlier. That brought AT&T’s total cord-cutters to more than 4 million in 2019­ -- or about 17% of its subscriber base.

That translated to a drop in revenue from 2018. But because many of the departing customers were on promotional plans that weren’t profitable for AT&T to begin with, the company managed to hold Entertainment Group Ebitda steady from 2018 to 2019­one of its stated goals for the year.

Another target of AT&T management for 2019 was to reduce its leverage to 2.5 net debt to Ebitda or below. It ended the year with $151 billion in net debt­ -- much of it acquired to fund the purchase of Time Warner -- ­and a ratio of 2.547. About $18 billion in asset sales last year helped fund much of the debt reduction.

AT&T’s wireless-phone business is the strongest and most important part of its portfolio, and it outperformed on the subscriber front in the fourth quarter. The company added 229,000 postpaid wireless phone customers in the fourth quarter, while it gained a net 135,000 overall postpaid subscribers­ -- meaning those who pay a monthly bill. Analysts had been looking for 129,000 new postpaid phones and a loss of 13,000 overall postpaid subscribers. AT&T added just 8,000 prepaid customers, however, versus Wall Street consensus for 83,000 net new prepaid accounts.

Total wireless-service revenue increased 1.8% year over year, but both sales and Ebitda came in slightly below consensus expectations.

AT&T’s remaining business -- wireline, Latin America and WarnerMedia segments were about flat in the fourth quarter versus a year earlier -- ­with the HBO Max investment weighing on the media division.

Overall, AT&T generated $29 billion in free cash flow in 2019, up 30%. It paid out about half of that in the form of dividends, and bought back about 56 million shares.

“Coming into 2019, we laid out a detailed plan for the year,” AT&T CEO Randall Stephenson said on the company’s earnings call Wednesday morning. “That plan was a series of specific steps necessary to exit 2019 on a path of sustained growth…We met or exceeded every single one of those objectives, and the road map is set for the next three years.”

Management reaffirmed its 2020 guidance for revenue growth of 1% to 2% and adjusted earnings per share of $3.60 to $3.70. That would be a 1% to 4% increase over 2019’s $3.57. Chief Operating Officer John Stankey said on the earnings call that AT&T had 50 million people covered by 5G already, and expects to have a nationwide network by the second quarter. That is using largely mid-band spectrum, which propagates further from its antenna but has slower data speeds than higher frequencies. AT&T has mmWave 5G live in 35 cities, and plans to add more in 2020.

Chief Financial Officer John Stephens said AT&T had bought back 85 million shares in the first quarter and planned to repurchase 20 million more this quarter. It has a target to retire 250 million shares in 2020.

Activist hedge fund Elliott Management disclosed a large stake in AT&T last fall and advocated to the company’s board for several changes to its operations, capital allocation and acquisition strategies. In response, AT&T announced a three-year plan that included new targets for earnings, shareholder returns, cost reduction, and profit margins. It also committed to not making any major acquisitions and to leadership tweaks down the road.

“Today’s report offers little to assuage concerns about the company’s competitive position in most of its businesses,” Bernstein analyst Peter Supino wrote Wednesday morning. “With Elliott Management having quickly influenced the company’s financial and governance plans, the ‘paid to wait’ case for AT&T is interesting.”

The Elliott involvement boosted AT&T’s shares in the fall. They have returned 36% including dividends over the past year through Tuesday’s close. That is ahead of peers and the S&P 500, which had returned 24%. T-Mobile US (TMUS) and Verizon Communications (VZ) had returned 17% and 16%, respectively. AT&T stock sports a 5.4% dividend yield.

Write to Nicholas Jasinski at

Copyright © 2020 Dow Jones & Company, Inc.


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To: Jon Koplik who wrote (4235)1/29/2020 1:46:50 PM
From: robert b furman
1 Recommendation   of 4269
HI Jon,

I've accumulated a large size position in T as a dividend Aristocrat over the last 2- 21/2 years. I've sold far out in time money with the hope of getting them assigned to me, and they have been.
T has reduced debt, increased free cash flow,and now is reducing the shares issued when acquiring Time Warner.

When they have bought back the shares issued, T will have gobbled up an 85 billion acquisition and will have a huge cash flow, all while building the biggest and fastest 5G nationwide system.

This is a monster of a company slowly doing all the things right.

My favorite number was the dividend payout dropped below 50%(46%).

That's quite a very safe reliable dividend yield that is yielding 6.34% in my account.

Additionally I like the sale of preferred stock yielding 5%.

I'm not buying the preferred, as I think this will fund the stock repurchase plan,which will benefit the price of the common.

I thought the drop in price today was unjustified.

Randall Stephenson is a much underrated CEO IMO.

His goals for the company are very conservative and have a superior track record of being achieved.

HBO max is the big question mark to me.

The track record of the management group makes me think that the launch will be surprisingly powerful.

A library of content twice the size of HBO now - is a significant statement from today's webcast.

A very nice solid company that offers an excellent dividend yield that is solid and a share buyback program that will soon put the price of T starting with a 4 IMO.

Good to see posters here at this incredibly GREAT American Company.


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From: Sr K3/20/2020 2:47:03 PM
   of 4269
T is dropping its plan to buy back $4 billion in stock over the next three months as the coronavirus pandemic reignites criticism of Fortune 500 companies' repurchasing practices.

Just change the amount to buying back debt instead of equity.

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To: Sr K who wrote (4237)3/20/2020 2:51:32 PM
From: robert b furman
   of 4269
Hi Senior K,

Stocks would be the deal. Bonds would be expensive with rates so low.

I suppose they could issue new bonds and buy back old debt with higher rates.

Kicking out debt term in a low rate environment would be good too.


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From: Sr K4/24/2020 11:06:31 AM
   of 4269
WSJ today

11:02 AM

AT&T Inc. Chief Executive Randall Stephenson said he will retire at the end of June, handing leadership of one of the world’s largest media and telecommunications companies to longtime deputy John Stankey.

Mr. Stephenson said he will remain chairman of the Dallas company until January, when the company is expected to elect an independent chairman. The change was announced at the company’s annual meeting Friday, which was held online because of the coronavirus pandemic.

Mr. Stephenson, who turned 60 this week, has spent most of his 13 years as chairman and CEO piecing together a modern media company by scooping up DirecTV and then Time Warner, remaking the staid telephone company he inherited.

He had been preparing to retire in 2020 until an activist investor surfaced late last year challenging his strategy, according to people familiar with the matter.

His exit comes after the company reached a truce with the activist investor, Elliott Management, which had been pushing for a strategic review of assets and questioned Mr. Stankey’s elevation to succeed Mr. Stephenson. Last year, AT&T promoted Mr. Stankey, then the head of its media unit, to No. 2 role as chief operating officer.

After reaching a truce with Elliott, AT&T said Mr. Stephenson would stay at the helm through this year.

AT&T said the leadership change came after a five-month search process overseen by the company’s independent board members, which evaluated external and internal candidates. Mr. Stephenson said the board began its succession planning in 2017 and the decision to promote Mr. Stankey was unanimous.

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From: Sr K5/23/2020 12:41:49 PM
   of 4269

AT&T Told to Stop Using ‘5G Evolution’ in Marketing

Company says a self-regulatory group’s finding doesn’t apply to its 5GE icon

CFO Journal

May 20, 2020 7:27 pm ET

AT&T Inc. will stop using the slogans “5G Evolution” and “5G Evolution, The First Step to 5G” in its marketing after losing an appeal with a self-regulatory group, but suggested that it will continue to display “5GE” icons on customers’ phones.

T-Mobile US Inc. had successfully challenged AT&T’s “5G Evolution” marketing with the National Advertising Division unit of BBB National Programs, prompting an appeal by AT&T.

But the National Advertising Review Board, the appellate body for BBB National Programs’ ad self-regulation program, agreed with the earlier finding.


AT&T disagrees with the reasoning but will comply with the ruling as a supporter of the self-regulatory process, a spokesman said. BBB National Programs is an independent nonprofit organization that focuses on industry and business self-regulation. The group separated in 2019 from the Better Business Bureau, which primarily addresses relationships between businesses and their customers.

Asked whether AT&T will keep showing “5GE” on phones, the spokesman said the decision only applies to its ads.

The company has previously argued that it introduced the 5G Evolution idea as a first step in the transition to the next generation of wireless networks.

Telecom companies have been battling to convince customers that each will be first with nationwide 5G, which they say will offer much faster speeds, and have contested rivals’ assertions on the subject.

AT&T previously challenged claims in two commercials from Verizon Communications Inc. that said Verizon is “building the most powerful 5G experience for America.” The National Advertising Division last week said Verizon should discontinue the claim because the company hadn’t produced supporting evidence.

Verizon is appealing a portion of the decision.

Sprint Corp. in February 2019 sued AT&T over its 5G marketing, alleging false advertising. The lawsuit was settled in April 2019, according to a spokeswoman for T-Mobile, which closed its takeover of Sprint last month. She declined to elaborate.

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From: Sr K8/6/2020 9:33:52 PM
   of 4269
6:49 PM

T-Mobile TMUS US Inc. said it vaulted ahead of rival AT&T Inc. T in the race for wireless customers to become the country’s second-largest cellphone carrier.

The Bellevue, Wash., company ended June with 98.3 million U.S. customers, excluding wholesale subscribers on other brands that use its network. AT&T reported 92.9 million prepaid and postpaid customers, a tally that didn’t count wholesale accounts or connected devices such as Wi-Fi hotspots and car sensors. T-Mobile included non-phone gadgets like wireless hotspots in its reported customer base.

Despite the different reporting policies, T-Mobile was long expected to climb the wireless rankings after it closed its merger with rival Sprint in April. The merger effort prevailed after a more than two-year battle with regulators and antitrust enforcers that culminated in a federal antitrust trial brought by a coalition of state officials. The transaction created a larger mobile service provider with a market value topping $100 billion controlled by German parent company Deutsche Telekom AG .

“We’re staring down Verizon with our sight set on the No. 1 spot,” T-Mobile Chief Executive Mike Sievert said Thursday during a videoconference with financial analysts. Verizon Communications Inc. ended June with 119.9 million wireless connections, a figure that also counted smartwatches, tablets, and other machines aside from smartphones.

T-Mobile’s second-quarter results showed it also weathered the coronavirus pandemic better than its competitors, adding 253,000 postpaid phone customers during the period. Investors place a higher value on postpaid customers—who are billed for service after it is rendered—than on prepaid plans subject to more customer switches.

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From: Jon Koplik11/8/2020 12:46:27 PM
1 Recommendation   of 4269
Bloomberg -- Second Breakup of AT&T / telecom giant is trying to unwind much of its M&A spree ...............

November 6, 2020

The Second Breakup of AT&T

The telecom giant is trying to unwind much of its M&A spree, but finding buyers hasn’t been easy.

By Scott Moritz

AT&T Inc. has been called many things over its 135-year history: Ma Bell, monopoly, media conglomerate.

The company, which traces its roots to the patent rights of telephone inventor Alexander Graham Bell, was the dominant phone company for much of the 20th century. So dominant, in fact, that it was broken up in 1982 as part of an agreement with antitrust authorities. But those businesses eventually began to merge, culminating with SBC Communications -- one of the so-called Baby Bells -- acquiring AT&T in 2005 and taking the name.

That wasn’t the end of it. What followed was a streak of deal-making that turned AT&T into a new behemoth spanning television, media and advertising. After a failed attempt to acquire T-Mobile, the company bought satellite-TV provider DirecTV in 2015 for $49 billion, becoming the biggest provider of pay television. It purchased Time Warner in 2018 for $85 billion, making Ma Bell the improbable parent company of HBO, CNN, Warner Bros. and DC Comics. The carrier also made smaller deals, such as the 2018 acquisition of AppNexus, an online ad platform.

This time around, it isn’t the government pushing to slim down the company -- though the Justice Department did unsuccessfully oppose the Time Warner deal -- but its own investors and Chief Executive Officer John Stankey.

Stankey took the helm in July, putting him in charge of a company with heavy debt and a media business that was ravaged by the pandemic. AT&T also was shunted to No. 3 in the wireless-phone business this year, following T-Mobile US Inc.’s acquisition of Sprint Corp. The company had just launched HBO Max, an attempt to take on Netflix Inc. and Walt Disney Co. in streaming, but perhaps the most urgent matter was undoing some of the work of his predecessor.

The last CEO, Randall Stephenson, had spent much of his 13-year tenure obsessed with deals. He kept a color-coded roster of potential companies he wanted AT&T to buy, leading to 43 acquisitions.

Now Stankey has his own to-do list: things he wants to sell.

“It’s going to keep us busy for a little bit of time.”

Critics such as activist investor Elliott Management Corp. have urged AT&T to focus on its subscriber services and walk back its go-big-or-go-home M&A strategy by divesting acquisitions, including DirecTV.

“When you look at what’s worked or hasn’t worked in telecom, you see that conglomerates and empire building has not been rewarded by the marketplace,” said Todd Lowenstein, chief equity strategist with the Private Bank at Union Bank.

Stankey, who has spent his entire 35-year career at AT&T, may be an unlikely person to dismantle AT&T’s acquisition empire. He rode shotgun as a top captain during Stephenson’s decade of agglomeration. The executive had a hand in creating some of the current problems and he calls them out directly: Last month, he acknowledged that pay-TV providers like DirecTV will probably face years of cord cutting before they hit bottom.

Now, more than 100 days into the job, he says his plan of attack is to focus on three key growth areas: wireless -- particularly 5G -- where there’s hope for new consumer and business applications; fiber-optic network connections to accommodate surging data traffic; and HBO Max, the online streaming future of AT&T’s video ambitions.

As for new acquisitions, don’t expect much beyond opportunistic purchases, Stankey said in an interview in September. “Right now this management team is focused on getting execution right and moving the distractions elsewhere,” he said. “It’s going to keep us busy for a little bit of time.”

Last month, AT&T got $1.1 billion for its stake in Central European Media Enterprises. The company has already sold office buildings and a stake in Disney’s streaming service Hulu. It also got nearly $2 billion from the sale of its Puerto Rico phone business earlier this month.

The company is aiming to pay down debt and cut $6 billion in annual costs, partly through slashing thousands of jobs.

But AT&T still has plenty of potential businesses to sell or scale back. The question now is how big an asset sale it wants to have -- and who may be interested in buying.


The biggest priority is DirecTV and AT&T’s other pay-TV operations, which have been hemorrhaging customers. AT&T has been exploring options for DirecTV for more than a year, but finding a buyer for the whole business seems unlikely.

A combination with Dish Network Corp., the nation’s other satellite-TV provider, is one scenario. But reducing the industry to a single player would draw antitrust scrutiny, especially since rural customers have few other options. A proposed combination of the two businesses was shot down by the Federal Communications Commission and the Justice Department in 2002.

Instead, AT&T is trying to sell a stake -- and possibly control of the business -- to outside investors. a move that could take some of the drag off AT&T’s performance. But the ice cube is melting fast: Pay-TV revenue fell by more than $1 billion, or 10%, in the third quarter.

Apollo Global Management Inc. has been in discussions about such a transaction. And Bloomberg News reported this week that former Citigroup Inc. rainmaker Michael Klein could do a deal through his blank-check company Churchill Capital Corp. IV. Ideally, an agreement would let AT&T remove DirecTV from its books while maintaining access to some of its cash flow.

But a deal is expected to value DirecTV at only about $15 billion when final bids are accepted next month. That's less than a third of the price AT&T paid five years ago.


AT&T’s DirecTV Latin America business suffers some of the same problems as the U.S. operations, only with an even more erratic political backdrop. The 2015 acquisition of DirecTV included satellite businesses in South America and the Caribbean -- an entity that was renamed Vrio. The unit’s biggest problem was its Venezuela pay-TV business. During the country’s political turmoil, the service was shut down after getting caught between U.S. restrictions and the local government.

AT&T tried but failed to spin off part of Vrio in an initial public offering. Then, after reducing the size and price of the offer, AT&T abandoned the move. For the past two years, the falling value of the satellite-TV business has made prospects of unloading the business even dimmer.

Warner Bros. Interactive Entertainment

Unlike some of its businesses, AT&T’s video-game division would be a prized asset for a number of potential buyers. The company has reportedly explored a sale of the operations, which are estimated to be worth $4 billion. But AT&T recently pulled the business off a list of non-core assets that it's willing to part with.

The unit, whose video games include titles like Harry Potter: Wizards Unite and Mortal Kombat 11, attracted interest from several major companies. But with the gaming industry booming during the pandemic -- and AT&T facing the complications of wanting to retain licensing rights -- the company may have decided the division was worth keeping for itself.


The animation video service was the first step in AT&T’s massive pivot to media six years ago. Crunchyroll was acquired through the company’s newly formed joint venture with the Chernin Group, called Otter Media. The name is derived from the abbreviation OTT, for content delivered via the internet “over the top” of a traditional platform. Since then, just “streaming” has become the more popular term.

AT&T bought out the remaining stake in Otter Media from the Chernin Group in 2018. More recently, the telecom giant has had second thoughts. Last week, the Nikkei business daily reported that Sony Corp. was in final talks to acquire the service in a deal worth close to $1 billion.


CNN is one of the more controversial businesses that AT&T acquired when it absorbed WarnerMedia in 2018, with the president regularly assailing the cable-news network on social media. It's also been the source of takeover speculation, with Jeff Bezos seen as a potential buyer. But Stankey said in September that CNN was one of the pieces of the WarnerMedia structure that are “more tightly wound together than they were before.” In other words, selling it would seem less likely.


AT&T had high hopes for the AppNexus digital advertising unit it acquired for $1.6 billion in 2018. Named in a nod to Alexander Graham Bell, Xandr was going to be an advertising network that all pay-TV providers could use. Ad-industry veteran Brian Lesser was hired to run the operation, and Stephenson told investors that the business would bring in $2 billion in new revenue by using customer data to deliver targeted ads.

Those fortunes didn’t materialize. Lesser left, and now it’s up for sale as new WarnerMedia chief Jason Kilar brings in another ad team.

Regional Sports Networks

AT&T has four regional sports networks, or RSNs, which include rights to teams such as hockey’s Pittsburgh Penguins, basketball’s Houston Rockets and baseball’s Seattle Mariners.

Though live sports are still the closest thing to must-see TV these days, owning RSNs has increasingly become a headache. Sports leagues have sought ever-increasing sums for rights to their games, and subscribers aren’t as reliable as they once were. Sinclair Broadcast Group Inc. just wrote down its RSNs by $4.23 billion, an admission that it overpaid for the cable channels, which it only acquired last year.

Looking for cash to pay down debts, AT&T had hoped to sell its RSNs and cash in on their $1 billion in estimated value. The company sought bids last year, but a buyer didn’t materialize. This year, with sports still trying to bounce back from Covid-19, a sale seems even less likely.

Digital Life

In a bold attempt to take on home-security giant ADT Inc., AT&T launched its own “smart home” security and monitoring venture in 2013. While the effort was intended to explore opportunities beyond its wireless service, the timing and model may have been wrong. Homeowners were already moving away from expensive security services and buying do-it-yourself systems or products like Ring from Inc. or Nest from Alphabet Inc. Four years into the venture, AT&T started looking for ways to get out.

AT&T Mexico

Stephenson crossed borders and ended a decades-long friendship with his onetime mentor Carlos Slim by becoming a direct competitor for mobile customers in Mexico. AT&T bought wireless carrier Grupo Iusacell SA for $2.5 billion in 2015 and expanded the service to cover most of Mexico by 2018. But Covid-19, foreign-exchange rates and the dominance of rival America Movil in Mexico has kept the investment unprofitable and difficult to justify.

So what does Stankey do now? Holding out to get top dollar for some of these assets might not be the right approach, said Colby Synesael, an analyst at Cowen.

Stankey just needs to “rip the Band-Aid off and move on,” Synesael said. In other words, take what he can get.

“I think it has become obvious to him that he needs to do it. And the sooner he does it the better,” Synesael said. “He doesn’t want to spend his entire CEO tenure undoing what he and Randall did in the past. Get it done now so he can concentrate on other initiatives.”

-- With assistance by Liana Baker, and Nabila Ahmed

© 2020 Bloomberg L.P.


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From: Jon Koplik12/8/2020 2:52:58 PM
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WSJ -- AT&T Boss Defends Plans to Stream Warner Bros. Films Upon Release .....................

Dec. 8, 2020

AT&T Boss Defends Plans to Stream Warner Bros. Films Upon Release

CEO John Stankey expects coronavirus pandemic to scare many people away from theaters

By Drew FitzGerald and Joe Flint

AT&T Inc. Chief Executive John Stankey defended the decision to release all Warner Bros. movies online the same day they hit theaters next year, arguing that the film producer had to tweak a 2020 playbook that wasn’t working during the coronavirus pandemic.

The telecom company’s Warner Bros. unit said last week that it will release its entire 2021 film slate on HBO Max, a new film and television library designed to compete with online services such as Netflix and Disney+. The plan covers 17 movies from the science-fiction epic “Dune” to another installment of the “Matrix” franchise.

The choice shocked a film industry accustomed to releasing big-budget films in stages, with cinema owners getting the first bite. But U.S. box-office ticket sales have cratered since coronavirus-related restrictions shut down many venues. Those that reopened are struggling to attract large audiences.

“We know we probably needed to try something different,” Mr. Stankey said Tuesday during a virtual investor conference hosted by investment bank UBS Group AG. “Our feeling was, in the theatrical business, based on our best discussion with experts, we were going to be in a situation where the psyche of the population and people’s willingness to go back into large venues­ -- that’s going to be a little bit of a prolonged recovery.”

Hollywood and much of the creative community has reacted angrily both to Warner Bros.’s strategy and to the short notice its executives gave their business partners. Theater owners fear that releasing the movies simultaneously on HBO Max and the big screen will drive a stake through their business.

Warner Bros. has countered that this is a short-term move for 2021 as the coronavirus keeps many would-be moviegoers at home and theaters in big cities shut. HBO Max will host the movies for only their first month of theatrical release before the films follow their usual distribution pattern.

Director Christopher Nolan, whose credits include “Tenet” and “The Dark Knight,” criticized the Warner Bros. strategy, telling the TV show “Entertainment Tonight” that the company is using movies “as a loss-leader for the streaming service.” He added: “It’s not the way to do business and it’s not the best thing for the health of our industry.”

“Tenet” is among the movies that Warner Bros. released in theaters this year after several pandemic-related delays. The strategy yielded some box-office revenue abroad but underperformed in the U.S.

Over the summer, Universal Studios and AMC Entertainment Holdings Inc. agreed to shorten the theatrical window before movies appear online. The deal ended a dispute after Comcast Corp.’s Universal made “Trolls World Tour” available as a $20 online rental on April 10, the day it had been scheduled to open in theaters.

Walt Disney Co. offered “Mulan” on Disney+ in September for an extra $30 fee and later made the film available free on its streaming service.

There are also financial concerns for talent who have deals that tie their compensation to a film’s theatrical performance. Warner Bros. has said talent with such agreements will be compensated from the license fees HBO Max will pay to carry the films during their first month of release. However, talent agents are concerned that actors and producers could be hurt by self-dealing between the studio and HBO Max.

Mr. Stankey, who ran WarnerMedia for nearly two years and took the top AT&T job in July, brushed aside those complaints as chatter that often follows a market-disruptive innovation.

“Any time you’re going to change a model, I know it creates a degree of noise,” he said Tuesday. “Ultimately, rational parties will step back and look at this and say, giving theater owners a predictable release of content over the next several months that they can plan around and start to work their business around is a good thing for them.”

The investment community has reacted less dramatically to a decision that threatened theatrical revenues that were already at risk because of the pandemic. AT&T shares have climbed about 3% since the company announced the new strategy. Many Wall Street analysts are focused on the success of HBO Max, which was launched in late May.

Mr. Stankey said Tuesday that HBO Max will count about 12.6 million activated accounts by Wednesday, after ending September with 8.6 million. It had previously set plans to debut “Wonder Woman 1984” on the service when it hits theaters on Christmas Day. The service has also benefited from a deal with Inc. giving customers direct HBO Max access through the e-commerce company’s platforms.

“The market has shown a clear preference for go-big-or-go-home digital strategies,” media-research firm MoffettNathanson wrote in a recent note to clients called “AT&T & U.S. Theaters: Suicide Squad?” a reference to another Warner Bros. title. “AT&T is, come hell or high water, going to drive traffic to HBO Max.”

Write to Drew FitzGerald at and Joe Flint at

Copyright © 2020 Dow Jones & Company, Inc.


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