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AT & T Pitches WarnerMedia Strategy To Wall Street Analyst

AT & T delivers a fiery Wall Street analyst this afternoon and releases new light on its OTT service launch…

AT & T delivers a fiery Wall Street analyst this afternoon and releases new light on its OTT service launch right at the end of 2019.

CEO Randall Stephenson opened the two-hour event at Time Warner Center. He took the scene after a sizzle reel was played. The short section climbed with a special shot shot of a Game of Thrones dragon flying directly over the head of a young AT & T mobile phone user.

“Much happened during the past year,” Stephenson killed in his trademark suit, referring to the almost two-year odyssey (still not over) to refrain from President Donald Trump’s Justice Department, which sought to block the merger’s $ 81 billion time warner- fusion. “It made us take on many of our plans… We are now in a place where we are ready and we want to share these plans with you.”

The still-named WarnerMedia streaming service will contain three levels, says the company. It will have a movie-focused package at the start level. a premium service with original programming and blockbuster movies; and a third service bundle content from the first two plus a comprehensive library of WarnerMedia and licensed content. Pricing or precise launch plans have not yet been revealed.

Financially, the company is expected to increase earnings per share in the low simple numbers of 2019 as it absorbs the new content operation. There is a forecast of total WarnerMedia synergies that reach an interest rate of $ 2.5 billion by the end of 2021. About 1.5 billion dollars will be cost synergies, while the remaining $ 1 billion is due to additional sales opportunities, lower subscriber consumption and higher advertising . The company expects to reach an interest rate of about $ 700 million by the end of 2019 and increase to $ 2 billion by the end of 2020 and ramp to $ 2.5 billion by the end of 2021.

In a press release, Stephenson summarized the company’s premier message about adding entertainment assets to their traditional telecombas. “We are well positioned for success because the lines between entertainment and communication continue to blur,” he said. “If you are a media company, you can no longer rely solely on wholesale distribution models. You must develop a direct relationship with your viewers. And if you are a communications company, you can no longer rely solely on oversized content bundles.”

Randall Stephenson

The analytical day gives the company the opportunity to showcase and explain its new structure for the investment community. Wall Street has been skeptical of some aspects of the acquisition of Time Warner, for some reasons. First, the deal significantly increased the company’s debt burden and some analysts have wondered how the company will reach new heights when it is more concerned to pay off the debt. (Managers say at the end of 2019, net debt will be two and a half times adjusted profits.)

The strategy is another question mark, with many analysts and media watchers wondering how Warner Media’s streaming plans will shake out, especially with rival Disney up for its own OTT milestone 2019. On the pay-tv side, the subscriber losses at DirecTV have not been compensated by winnings with DirecTV skins. Now leaves some uncertainty about how fast the long-term bulwark will fade and damage the balance sheet.

The legal status of the merger law is still shady. D.C. circuit in U.S. The Court of Appeals will hear oral arguments on December 6 in the government’s appeal of its antitrust process. A federal judge in the Dutch court issued a decision in June next to AT & T, and the $ 81 billion agreement was closed within a few days.

A condition for closing is that the Turner Broadcasting device is disconnected from DirecTV and other company’s pay-TV distribution holdings, which would make it possible to terminate the merger of the courts ultimately blocking it. While this result is considered unlikely, the appeal still adds a shadow of AT & T.

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