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AT&T “Not Concerned at All” About Warner-Discovery Regulatory Review, CFO Says

BY GEORG SZALAI | HollywoodReporter.Com

Troy Warren #business-all

Although Pascal Desroches says about the process: “I’m not confident that we are going to be able to get something done very quickly through the DOJ.”

AT&T’s WarnerMedia merger with Discovery shouldn’t face any real challenges from regulators and could end up securing clearances before the companies’ mid-2022 closing target date, AT&T CFO Pascal Desroches signaled during an investor conference on Tuesday.

“Getting through the U.S. and international different market regulatory regimes just takes some time,” he said duringCredit Suisse’s virtual 23rd Annual Communications Conference. “We are hopeful that we are conservative in our outlook in terms of the time that it is going to take to get it approved, but we don’t know.”

Desroches also said about the Washington review process: “I’m not confident that we are going to be able to get something done very quickly through the DOJ (Department of Justice). That is why we gave the one-year timetable. We are not concerned at all that this could be challenged from a regulatory standpoint.”

In mid-May, AT&T unveiled a deal to spin off WarnerMedia, merge it with Discovery and get $43 billion, in the process creating a new global content powerhouse with scripted and unscripted programming. AT&T will use the sale of its entertainment unit to reduce debt and focus on its connectivity business.

“This agreement unites two entertainment leaders with complementary content strengths and positions the new company to be one of the leading global direct-to-consumer streaming platforms,” AT&T CEO John Stankey had said in unveiling the deal. “It will support the fantastic growth and international launch of HBO Max with Discovery’s global footprint and create efficiencies which can be re-invested in producing more great content to give consumers what they want.”

For AT&T shareholders, he called it “an opportunity to unlock value and be one of the best capitalized broadband companies, focused on investing in 5G and fiber to meet substantial, long-term demand for connectivity.”

HBO and the HBO Max streaming service ended March with 44.2 million domestic and 63.9 million global subscribers. AT&T did not break out the number of subscribers for HBO Max as it no longer reports “activations.”