Report: AT&T Sets Major Post-Merger Re-Org

AT&T is planning a major reorganization that will separate its telecom and media businesses, if it is allowed by the federal government to acquire Time Warner Inc., according to a Bloomberg report.

The Bloomberg story, which cites anonymous sources, claims AT&T Inc. (NYSE: T) Randall Stephenson will become executive chairman, overseeing two new CEOs who will lead the two individual business units.

Both chiefs are AT&T veterans: According to Bloomberg, John Donovan will become CEO of the telecom operation, which will now include DirecTV, and John Stankey, who has headed DirecTV and AT&T's other entertainment businesses, will head up the media division, including Time Warner Inc. (NYSE: TWX).

Whether Donovan and Stankey carry CEO titles is unclear, though, as an AT&T spokesperson told Variety that Stephenson would retain the titles of chairman and CEO once the Time Warner deal is closed.

Whether or not they have the title CEO, it seems Donovan and Stankey are in line to be the key individuals with day-to-day responsibility for the two lines of business.

All of this assumes the proposed $85 billion takeover of Time Warner is approved by the US Department of Justice, which continues to hear from consumer groups and others opposed to the merger. Bloomberg speculates the reorganization is intended to show DoJ that the content and network parts of AT&T will be operated separately. (See AT&T Shakes Industry With $85B TW Bid.)

The two new divisions would also be physically separate, with AT&T's network service operations, including its wireless services now based in Atlanta, consolidated in Dallas, under Donovan's leadership. The media division would be run by Stankey from his California office, and would have operations in Los Angeles and New York, Bloomberg reports.

"AT&T sees the split structure as a way to protect Time Warner’s Hollywood culture, where creativity is prized, from the more bureaucratic traditions of a Dallas office that teems with the jargon of Six Sigma process improvement tools and 'best practices,' " the Bloomberg article notes.

Light Reading has reached out to AT&T for comment, but there has been no formal response to this point.

— Carol Wilson, Editor-at-Large, Light Reading

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