HBO dominated Sunday night’s Emmy awards, scoring the most wins of any network or platform thanks to hits such as Game of Thrones and Chernobyl. But despite its moment of triumph, the future of television’s creative powerhouse is clouded with uncertainty.
Paul Singer’s Elliott Management, the aggressive activist investor known for its decade-long campaign against the Argentine government, has set its sights on HBO’S owner AT&T. Elliott wants the phone company to divest some of its assets and everything is potentially up for sale, according to people familiar with the matter — including HBO.
Elliott argues that AT&T is bloated after making too many pricey acquisitions in the past decade. AT&T is “an outlier in terms of its M&A strategy: most companies today no longer seek to assemble conglomerates”, it says.
The hedge fund questions AT&T’S strategy for Warnermedia, of which HBO is the crown jewel. After buying Time Warner for $80bn, AT&T wants to make use of its newly acquired Hollywood empire with a streaming service, HBO Max, to rival Netflix.
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However, Elliott is sceptical about whether pushing into streaming is the right strategy, according to people familiar with the matter. HBO already has a streaming service that costs $15 a month — significantly higher than the prices of Apple, Disney and Netflix.
There is also a question of how HBO, which has made a name for itself as a producer of selective, high-quality series such as Chernobyl, Succession and Game of Thrones can be packaged into a Netflix-style service as streamers flood the market with new shows.
Shortly after he was installed as Warnermedia chief executive last summer, John Stankey warned HBO employees that the network needed to create more content. On HBO Max, HBO’S catalogue will be available alongside more lowbrow fare such as a Gossip Girl reprise and The Big Bang Theory.
Warnermedia is planning an investor presentation on October 29, when it will lay out its streaming plans. Elliott executives are waiting for this before they decide whether HBO Max should be killed off, according to people familiar with the situation.
“The next few months could be pivotal for AT&T,” said Morgan Stanley.
Another looming point of contention is over who will replace AT&T chief executive Randall Stephenson, who is expected to retire as soon as next year.
