WarnerMedia Completes Sale-Leaseback Of 30 Hudson Yards Office Space For $2.2B

The initial agreement to sell off the assets was revealed last April.
WarnerMedia’s lease at 30 Hudson Yards runs through early 2034. AT&T said it will use proceeds from this transaction, along with other planned sales of the company’s non-core assets, to reduce its debt.
Continuing its drive to pay down debt, AT&T announced that WarnerMedia has completed the sale-leaseback of its sparkling New York City headquarters at 30 Hudson Yards to a consortium for about $2.2 billion.
The Hudson Yards headquarters consolidates previously far-flung operations, bringing employees from Columbus Circle, Bryant Park and elsewhere under one roof.” />
Hudson Yards, a massive new development along the Hudson River on Manhattan's far west side, is the city's most sweeping new set of buildings and corporate homes since Rockefeller Center was built in the 1930s.
A top-to-bottom restructuring has broken down the walls that used to separate Turner, HBO and Warner Bros. Since February, when the Department of Justice abandoned its appeal of a lawsuit aiming to block the merger, WarnerMedia has been in non-stop transition mode. and seen an exodus of veteran executive talent. A streaming service, launching in beta by the end of 2019 and more fully in early 2020, is a priority.
Entering this year, the company was one of the most indebted non-financial institutions in the country, with about $170 billion in long-term debt, much of it stemming from the acquisition of Time Warner. The company has been whittling away at the debt load, focusing on the efficiencies it signaled to investors from the beginning of the Time Warner acquisition, which took more than two years to emerge from a bog of government scrutiny.

Turner Offers Voluntary Buyouts To Long-Tenured Employees, Following HBO

Here is the full text of Santone's internal memo:
The makeover began in earnest once the federal government lost its appeal of a lawsuit challenging AT&T's $81 billion takeover of Time Warner. While the deal was permitted to officially close last June by a federal judge, who rejected the Department of Justice lawsuit, the appeals process restrained the company from operating as a fully merged entity. Turner is undergoing significant changes under a reshuffling announced last month by CEO John Stankey.
If you have any questions, please don’t hesitate to contact your HR Representative. We know this is an important decision for those who are eligible to participate.
In recent weeks, Turner boss David Levy, a 32-year company veteran, said he was stepping down, and the company put CNN chief Jeff Zucker in charge of Turner as well as CNN. That eight-month delay created a bottleneck, a series of announcements has been flooding out almost daily about comings and goings. Under the terms of a settlement with the DOJ, Turner remained in a silo pending the outcome of the appeal. Richard Plepler and two senior executives have left the fold at HBO, and those exits are unlikely to be the last as changes continue to take full effect.
Today, employees meeting these eligibility requirements will receive a confidential, personalized email detailing the program, its benefits, and deadlines for acceptance, which is strictly voluntary.
As WarnerMedia continues to implement its restructuring plan, select Turner employees have been offered voluntary buyouts, following the same model of the plan introduced last month by HBO.
As part of these efforts, we have decided to offer a Voluntary Separation Program to regular status U.S. Turner employees who are at least age 55 and have 10 or more years of service as of December 31, 2019, excluding on-air talent and union employees.
WarnerMedia declined to comment when contacted by Deadline.
Part of the Turner network portfolio, including Cartoon Network and Adult Swim, shifted to Warner Bros. control in the reorg., putting a greater emphasis on CNN, TNT and TBS as Turner's main profit centers. Many operations in areas like distribution and marketing at Turner and HBO have been consolidated. John Stephens, CFO of AT&T, told a Wall Street investor conference last month that the parent company would seek to shield WarnerMedia from "a finance bean-counter from a telephone company." At the same time, AT&T still has billions in debt from the Time Warner deal it is looking to pay down, as it also looks to hit announced targets of $1.5 billion in cost savings and $1 billion in synergies.
The Wall Street Journal had the first report on the Turner buyouts.
Angela Santone, EVP and head of HR for Turner, sent a memo today to employees, according to a Turner insider. Workers who accept the voluntary offer will receive four weeks' pay for every year of service, up to a limit of two years' pay. The memo outlined the opportunity for workers 55 years old and older with 10 or more years of service as of the end of 2019.
This is a very important and historic time for our company. As the industry evolves, our focus is to ensure we continue to be as successful in the future as we have been in the past. Recently, John Stankey shared his new organizational structure and strategic priorities for WarnerMedia. Across the company, we are identifying opportunities for savings to drive growth and profitability.
Angela” />

AT&T Sale Of Hulu Stake Could Net It Nearly $1B After Two Years Of Gains

Hulu, a streaming-video pioneer that has grown considerably despite an unwieldy ownership structure, is about to undergo significant change once Disney takes majority control of it in the new year.
But such a sale wouldn't dramatically reshape the ownership structure: Disney will continue to own a controlling interest in Hulu, once it completes its $71.3 billion acquisition of 21st Century Fox's film and television assets. The other joint venture partner, Comcast's NBCUniversal, will hold a minority interest. It makes sense that AT&T would look to shed WarnerMedia's minority stake in Hulu as it looks to buy down debt.
During the analyst meeting, the sale of the Hulu stake came up in passing, but WarnerMedia chief John Stankey also described an effort to thin the herd after Time Warner had rolled out a large portfolio of streaming services.” />
Based on recent valuations, that stake is worth in the range of $930 million — not a life-changing figure for a company as large as AT&T but a worthwhile boost given the stake has never had much strategic purpose. It's also been a profitable ride, given what Time Warner paid ($583 million) when it took the stake in 2016.
The decision to sell its ownership stake in Hulu might not necessarily impact WarnerMedia relationship on the content side.
In a meeting with Wall Street analysts on Thursday, AT&T revealed even more change is coming. John Stephens, CFO of AT&T, said the company was considering letting go of its 10% stake in the streaming giant as part of an overall effort to reduce its massive debt load.
It also carries offers programming via Hulu's on-demand service, much of which is monetized through advertising. Hulu has agreements to carry WarnerMedia's networks — including CNN, TBS, TNT and Turner Classics — on its live TV service.
Hulu generates both licensing and advertising revenue for WarnerMedia that it might not be eager to shrug off. So, WarnerMedia content isn't disappearing from Hulu anytime soon — if they go away at all. These carriage agreements extend beyond next year.

DOJ Says Justice In AT&T Case Was Not Served By Judge “Erroneously Ignoring Fundamental Principles of Economics”

"After a long trial, Judge Leon weighed the evidence and rendered a comprehensive 172-page decision that systematically exposed each of the many holes in the Government’s case. In a statement, AT&T's general counsel David McAtee did not hold back in responding to the DOJ's argument. “Appeals aren’t ‘do-overs,’" he said. There is nothing in DOJ’s brief today that should disturb that decision.”” />
As it prepares to return to the courtroom in an effort to undo the $85.4 billion merger of AT&T and Time Warner, the Department of Justice today outlined its strategy for its appeal of a federal judge's June ruling allowing the deal to close.
"The evidence established the harm AT&T predicted is likely to occur here," the DOJ asserted in a brief filed in its case at the D.C. As they did during the initial trial in the spring, regulators pointed to arguments DirecTV made years ago in opposing the tie-up of Comcast and NBCUniversal. (Coincidentally, that merger was approved by the same judge who OKd AT&T-Time Warner). Circuit Court of Appeals. (Read the full brief HERE.) "The district court held otherwise, but only by erroneously ignoring fundamental principles of economics and common sense."
Leon opened the floodgates for media dealmaking. The D.C. District Court Judge Richard J. There are many other potential outcomes of the appeal, which is expected to begin with hearings in October, including forcing the divestiture of some of the Turner networks or placing tighter limits on AT&T as a distributor. In issuing a sharp rebuke of the government's case and handing AT&T a total victory on June 12, U.S. He also enabled the historic AT&T-Time Warner deal to close, meaning it would need to be undone were the three-judge panel at the appellate level to contradict Leon's ruling. Circuit could also remand the case back to the District Court for a re-trial.

Disney Declares Shareholder Dividend As Fox Vigil Continues

For the past week, though, all has been quiet. Many Wall Street analysts have described Comcast's view of the Fox assets as must-have, and some believe the media company is willing to keep increasing its offer in order to make a deal happen.
Disney's board has decided to give shareholders a semi-annual cash dividend of 84 cents a share, matching the dividend it offered in January.
Disney last week upped its accepted offer for the Fox portfolio, going 10% higher than Comcast in a cash-and-stock bid worth $71.3 billion. The move comes as the vigil continues in the high-stakes duel for 21st Century Fox's studio and cable network assets.
The regulatory paths that the two acquisitions would follow are markedly different in some ways. Proponents of the Disney offer see the company as having fewer entanglements given that, unlike Comcast, it does not operate a leading distributor.
“The Walt Disney Company had an excellent first half this fiscal year, delivering a 59% increase in diluted EPS, and we are pleased to be able to pay another strong dividend to shareholders while continuing to invest for future growth,” said chairman and CEO Bob Iger.
1 cable system with a deep well of content. As with Comcast's previous acquisition of NBCUniversal or the recent legal brawl over AT&T's purchase of Time Warner, the question with Comcast could be how it plans to reconcile its No. Critics of the potential combination see a risk for competitors and consumers in its mix, though proponents point to the resounding decision of federal judge Richard J. Leon in approving AT&T-Time Warner.” />
The dividend is payable July 26 to shareholders of record at the close of business on July 9.

Watch Time Warner Chief Jeff Bewkes Bid Farewell To Staff

Time Warner's Jeff Bewkes has bid farewell to staff in a video, a day after AT&T completed its $65 billion deal to acquire the media giant that includes Warner Bros, HBO and Turner Broadcasting.
Check out the video above.” />
Please know that from my first day at HBO to my final week as CEO, it's been my great honor to work alongside each of you. I've never known a more creative or dedicated team, or shared a greater sense of common purpose. So for one last time I want to sincerely say thank you for everything you've done, and thank you for being on this journey." "For me," he adds, "that time has come.
"Because as storytellers, as journalists, as business leaders and catalysts for change, our work is never really done. We can only run our leg of the relay, then pass the baton." "I'm very proud about what we have accomplished together, and I hope you're as excited as I am about the opportunities ahead," Bewkes says in the eight-minute video, which includes a pretty thorough history-as-legacy of Warner Bros, Time Warner, Turner through good and bad.
Bewkes, who started his career at Time Warner selling subscriptions to HBO, is exiting his post as chairman and CEO with the merger, the second biggest in media history behind only Time Warner's ill-fated tie-up with AOL. He will remain with the company as a senior advisor during a transition period, with AT&T's John Stankey taking over the properties under the newly named WarnerMedia as CEO.

AT&T-DOJ Decision Will Prompt “Pinball Action” In Media M&A

Leon will deliver his long-awaited decision in the Department of Justice's lawsuit against AT&T, which seeks to block the $85 billion merger with Time Warner. On Tuesday, U.S. Decision Day is at hand. District Court Judge Richard J.
A protracted legal battle might prompt shareholders to pressure Time Warner to haul AT&T back to the bargaining table and ask for more money. However the judge rules, either side could appeal the decision — prolonging the outcome even further.
"Whatever the judge says in this case affects what happens in Disney-Fox-Sky-Comcast quadrangle." You can also add the CBS-Viacom-National Amusements triangle, and other companies looking for more scale, among them Sony, Lionsgate and MGM, as well as large entities like Verizon who have been on the prowl. "I do think there’s some pinball action here," said Doug Creutz, an analyst with Cowen and Co., in an interview with Deadline.
Most of the money is on a favorable outcome for AT&T, based on the long odds against the government from the beginning and the general sense that its legal team, led by the DOJ's Craig Conrath, did not land any devastating blows in its bid to prove the merger would harm consumers. The defense case, led by Daniel Petrocelli, did not go without a hitch, and the company faced an embarrassing side show when it emerged it had paid Donald Trump fixer Michael Cohen for inside information. Nevertheless, most observers came away feeling the demonstration of consumer harm from the deal never quite materialized.
Anticipating a positive outcome, Comcast has loudly indicated its intent to make an aggressive, all-cash bid for the 21st Century Fox assets that Disney has agreed to buy for $52.4 billion. Meanwhile, it is revving up for a separate bidding war with Fox for control of Sky, the European pay-TV giant. The ruling also would have implications for the $26 billion hook-up of Sprint and T-Mobile, two smaller rivals to AT&T whose previous attempt at a combination was quashed in 2014 by the Obama Administration.
UBS analyst John Hodulik notes those could mirror the "behavioral" remedies imposed on the Comcast-NBCUniversal deal, such as eliciting a promise to provide rival distributors access to video content, or "structural," such as forcing AT&T to sell off Turner Networks or DirecTV. The judge also could strike a middle ground, approving the combination with remedies to address anticompetitive concerns.
"Had this merger been announced three years earlier, the Department of Justice’s case against it would have been stronger," said Mary Kelly, Associate Chair of Economics at Villanova School of Business. "But the media landscape has changed dramatically and will continue to do so."
There’s a lot of infrastructure to protect them from what Trump wants to do." "One of the benefits has been to see that Democrats can support some of what Trump is doing," Lynn told Deadline. "The DOJ is very isolated from Trump.
"But the problem is, a content owner wants their content in as many places as possible. To tie yourself to one distributor can be limiting." "But it doesn't solve the long-term problem with how the company can compete – it just moves the problem to another set of shareholders." Despite the ballyhoo about the peanut-butter-and-chocolate inspiration of blending the two companies' disparate areas of expertise, Creutz isn't convinced. (He covers Time Warner, but doesn't personally cover AT&T.) "People have tried to combine distribution and content forever," he said. Creutz said he has always felt the merger had flaws from the beginning, and he is not alone in that opinion. "It solves Time Warner's problem in the short term," he said.
"We want to avoid over-concentration of media," Lynn said. The CNN issue ultimately proved to be a distraction from the central criticism of the deal from the left and the right.
"Trump is a very mixed-up person," he said.” /> Asked how the lawsuit could emanate from the very administration handing giant tax breaks to corporations and stripping away decades of regulation that had restrained big business, Lynn shrugged.
If Leon ends up ruling in favor the government, blocking the deal, Time Warner will be able to rebound fairly quickly. The company "would still be 'for sale,'" points out Sanford Bernstein analyst Todd Juenger in a research note, "and (depending on the specifics of why the outcome was 'no') we expect the market would price Time Warner stock with an acquisition premium." The offer price for Time Warner was $102 a share. It began the week at $96.25, a sign of continued investor confidence amid several solid quarters of financial results. Bewkes has spent the past decade shaping the company into a content-centric machine, ditching non-strategic assets like AOL, book and magazine publishing, music and cable systems.
"A helping company." For the two CEOs at the center of the storm, the judge's view of the deal will undoubtedly affect their legacies. Randall Stephenson, who heads AT&T, has gamely sought to put a brave face on the tumultuous tangle with the government. Asked recently at a conference about whether he was contemplating a Plan B in case the deal is not approved, he said, "I don't want to even go there." For Jeff Bewkes, the career Time Warner exec, who testified during the trial about his early days at the company as a junior marketing exec at HBO, the deal would be the capstone of his four-decade run. "We need a technology partner," he explained. During his testimony, Bewkes repeatedly characterized the merger as a must for Time Warner if it is to "make it through to the next round" of media consolidation.
Chief among them, though it faded from view during the trial after Judge Leon barred it as a line of argument from defense lawyers, is the role CNN may have played in arousing the 11th hour opposition from the DOJ. But this case has also raised a range of political and regulatory questions. The deal was viewed as days away from clearing its final hurdle last fall, when suddenly the DOJ girded for legal battle, fueling speculation that the entire operation was a Trump-led effort to punish the owner of his least-favorite media outlet. The financial and operating implications of the merger are plenty to chew on.
Now, 20 months later, the number of moving industry parts has multiplied, and the anxiety level of traditional media players fighting the insurgence of deep-pocketed tech companies has continued to spike. Not only are a host of top-level management slots within Time Warner's various divisions going to be up for grabs, but Leon's ruling will reshape the entire media business. The deal was already viewed as a game-changer back when it was announced in October 2016. The stakes don't get much bigger than this.
And while many on the left rarely find common ground with the president, he argues that the fact that his appointee atop the DOJ's antitrust division, Makan Delrahim, brought the case at all is something to celebrate regardless of the outcome. Barry Lynn, executive director of the non-partisan, anti-monopoly Open Markets Institute, points out that the Trump element has always been somewhat of a mystery. But he notes that Trump spoke out against the deal's scale before winning the election. Delrahim and other officials have insisted Trump's feud with CNN was never a factor, instead arguing that the "behavioral remedies" inherent in a vertical merger like this become a regulatory burden.

AT&T CFO John Stephens: Telco Bullish On Time Warner Deal, DirecTV Now Growth

Asked about the margins of the DirecTV Now business, whose economics are markedly different from those of the company's traditional cable and satellite distribution systems, he compared them to the company's Cricket prepaid wireless unit. Stephens reminded the Wall Street audience that AT&T had recorded record profit margins in the third quarter.
Yes." But will it get to very acceptable ROICs (returns on invested capital)? "No. "Will it reach the legacy levels?" he asked, meaning satellite and cable systems.
AT&T CFO John Stephens began his keynote session at the UBS Global Media and Communications conference with the obvious: He reiterated the telco's optimism about its legal fight with the U.S. Department of Justice over the pending takeover of Time Warner.
"The customer should view it as no change," Stephens said of the FCC decision. The main impact on the business side, he said, was that "the vote will bring back the opportunity for more investment."” />
One significant one was the quick start out of the gate and remaining upside for DirecTV Now, the company's internet-delivered skinny bundle TV service. With legal teams prepping for that epic court case, the UBS session quickly moved into other areas. The company said earlier today that the offering has reached 1 million subscribers.
"We continue to feel strongly about the consumer benefits of the deal," Stephens said.
(Opponents of the rule change say it will usher in an era of gatekeepers like AT&T or other broadband providers picking and choosing which online content customers can visit for free.) He said AT&T "does not believe in blocking" access to certain websites or limiting internet access. 14 vote on a proposal to roll-back net neutrality rules, Stephens toed the same line as other execs on the same stage during the conference. Asked about the FCC's Dec.
A new iteration of the service planned for 2018 will also offer, in addition to customer enhancements like 4K picture and cloud-based DVR, but also more potent advertising tools, which AT&T expects to open up new revenue opportunities.
Unlike traditional distribution, he said, "DirecTV Now requires virtually no cap-ex" — meaning spending on infrastructure that is usually a dominant line-item for operators — " and we don't have to send a truck, pull out a ladder, climb the ladder and set up a dish on the side of your house."

Audience Network’s Programming Chief Chris Long To Exit

DirecTV/AT&T Audience Network programming chief Chris Long just announced that he is exiting the company after almost two decades. Long, who started at Audience when it was owned by DirecTV and remained at the helm following the DirecTV/AT&T merger, is stepping down on the eve of AT&T's acquisition of Time Warner.
Long and his team currently have over 10 projects in various stages of development and/or production.” /> During his tenure, Long has overseen the development and production of such series as Mr. Mercedes, Kingdom, You Me Her, Religion Of Sports, Loudermouth, Hit the Road and the upcoming Condor and Give Us This Day.
“And I’ve been blessed to have worked alongside a team that is second to none. “For the past 18 years I’ve felt an extraordinary degree of good fortune and pride in building the Audience Network into what is has become today—a creative, quality haven for talent on both sides of the camera,” said Long. I wish them all the very best moving forward—because I’ll be watching.”
Long said that his decision was influenced by his desire to "pass the baton after pioneering one the most unique TV networks on the landscape today and move on to a new challenge. "

Quentin Miller – Look What I Did (Gunmetal Grey Album)

[Hook]
Miss me with that, with that high school shit
With that high score shit
Nigga look what I did, I don’t gotta prove shit, I don’t gotta prove shit
Nigga look at my bitch
I don’t have to pay her bills, she already hood rich
Nigga look at where I live, look at where I live

[Verse]
Look how I, look how I live
Some things she just won’t understand
Time Warner, I got hoes on demand
Comcast, I got hoes on demand
What does that say about me as a man?
Okay, two carter, two daughters
Hope they never fall in love with a guy like I am
Couldn’t settle for the place I was placed inside of
Had to come up out it
I was too unhappy, had to do something ’bout it
You can’t do nothing ’bout it
Everybody, but you going off in your project
And you call it your comeback, fuck that
Niggas caught me slippin’ once
Now I’m looking out on all fronts
I’m really up there with ’em
I’m not a little guy, ask Ty Ty, that’s a big mane drop
I only met him a couple times, but them discussions was quick
I got different peers, rappers come and go
We see ’em dissapear
It’s not a race, it’s a marathon
Just give it a year or something
Let me get the game figured out
Come at these niggas brains when I drop
Woah!

[Hook]
Miss me with that, with that high school shit
With that high score shit
Nigga look what I did, I don’t gotta prove shit, I don’t gotta prove shit
Nigga look at my bitch
I don’t have to pay her bills, she already hood rich
Nigga look at where I live, look at where I live