Warner Bros CEO Kevin Tsujihara resigns as AT&T probes 'mistakes'

(Reuters) - Kevin Tsujihara has resigned as the head of Warner Bros as one of Hollywood’s most powerful studios investigates a report that he improperly helped an actress obtain roles at the studio.

He is the latest in a line of executives to lose their jobs in the media business following accusations of improper conduct or sexual harassment.

“It is in the best interest of WarnerMedia, Warner Bros, our employees and our partners for Kevin to step down as Chairman and CEO of Warner Bros,” WarnerMedia Chief Executive John Stankey said in a statement on Monday.

Tsujihara’s departure from the AT&T Inc-owned studio follows a March 6 article in the Hollywood Reporter that said an actress had sought his help in landing roles after they had sex.

The report included text messages between Tsujihara and the actress that appeared to reveal they had sex. Tsujihara has not directly addressed his relationship with the actress, whether they had sex, nor his involvement in helping her career.

“Kevin acknowledges that his mistakes are inconsistent with the company’s leadership expectations and could impact the company’s ability to execute going forward,” Stankey said in his statement.

Stankey did not specify what mistakes Tsujihara made. Only two days before the Hollywood Reporter published its story, Tsujihara was given an expanded, more powerful role as part of a restructuring of AT&T’s WarnerMedia.

“It has become clear that my continued leadership could be a distraction and an obstacle to the company’s continued success,” Tsujihara said in an email to employees on Monday, which was seen by Reuters. “The hard work of everyone within our organization is truly admirable, and I won’t let media attention on my past detract from all the great work the team is doing.”

Tsujihara did not address why he was leaving in the email. Earlier this month, following the Hollywood Reporter story, Tsujihara’s attorney said the executive did not have a direct role in the hiring of the actress in any movie.

AT&T is continuing to work with an outside law firm to complete its investigation into the matter, Stankey said.

That would be the third investigation, two sources familiar with the situation told Reuters, and was sparked by the Hollywood Reporter article, which included text messages between the executive, the actress and two business partners.

Tsujihara was cleared in two previous internal investigations related to the matter since late 2017, the sources said. The first, conducted by Time Warner, was initiated at Tsujihara’s request, the sources said, and the second was conducted by AT&T.

AT&T shares rose 0.4 percent and closed at $30.80.

Reporting by Kenneth Li; Editing by Bill Rigby

Amazon leads, Chinese firms gain in Global 500 brand ranking

MANILA -- Amazon, Apple and Google held on to the top three spots as the world's most valuable brands, with Chinese companies gaining the most in the top 20, according to rankings released by international monitor Brand Finance.

Amazon's brand value in 2019 rose 24.6 percent to $187.9 billion, followed by Apple with $153.6 billion and Google with $142.8 billion. Microsoft rose to the fourth spot, valued at $119.6 billion, according to Brand Finance's Global 500.

Chinese electronics giant Huawei and super app WeChat were the biggest gainers in the top 20. Huawei rose to 12th from 25th while WeChat rose to 20th from 47th.

China's ICBC construction rose to 8th from 10th, China Construction Bank advanced to 10th from 11th, Ping An rose to 14th from 29th while Agricultural Bank of China rose to 16th from 26th.

Chinese electronic marketplace Taobao debuted on the 55 list at the 23rd spot with a $46.6 billion brand value.

Facebook, roiled by privacy scandals, was steady at the 7th spot. Samsung, which is battling slumping sale fell to 5th place.

Here are the top 50 brands in Brand Finance's Global 500:

1. Amazon
2. Apple
3. Google
4. Microsoft
5. Samsung
6. AT&T
7. Facebook
8. ICBC China Banking
9. Verizon
10. China Construction Bank China Banking
11. Walmart
12. Huawei
13. Mercedes-Benz
14. Ping An
15. China Mobile China
16. Agricultural Bank of China
17. Toyota
18. State Grid China
19. Bank of China
20. WeChat
21. Tencent
22. Home Depot
23. Taobao
24. T (Deutsche Telekom)
25. Disney
26. Shell
27. Volkswagen
28. NTT Group
29. BMW
30. Wells Fargo
31. Starbucks
32. YouTube
33. PetroChina
34. Bank of America
35. Tmall
36. Citi
37. Chase
38. Coca-Cola
39. Marlboro
40. IBM
41. Nike
42. Boeing
43. McDonald's
44. UnitedHealthcare
45. Moutai
46. Deloitte
47. Porsche
48. UPS
49. Sinopec
50. Intel

source: news.abs-cbn.com

Mega merger frenzy evokes 1999 tech boom... and its aftermath?

LONDON -- By some measures, the global merger and acquisition frenzy has never been greater, fueled by "TMT" mega deals that are drawing comparisons with the late 1990s boom and spectacular bust.

This is understandably unnerving many investors, given how mature the economic cycle and equity bull markets are right now. The US economic expansion is the second longest since World War II, and Wall Street is only 3 months away from its longest bull run ever.

Two mega deals in the US tech, media and telecom space this month worth a combined $150 billion have brought back memories of investors partying like it's 1999. AT&T completed its $85 billion acquisition of Time Warner, and Comcast has offered to buy Twenty-First Century Fox's entertainment and international assets for $65 billion.

AT&T and Comcast are taking on $350 billion of debt between them to finance their deals, making them the two most indebted non-financial, private-sector companies in the world. Just as the U.S. interest rate hiking cycle is in full swing.

The records for economic expansion and market bull run are the 10-year periods ending March 2000, when the Nasdaq bubble started to deflate, and March 2001, the onset of the subsequent recession. There are signs we may be entering similar territory now.

Reuters data show that M&A mega deals this year, up to and including June 15, totaled $1.22 trillion, up 64 percent on the same period last year. They comprised a record 76 deals.

More significantly, that's 52.7 percent of $2.32 trillion total M&A, a new record share for the year to date, and on course to beat the previous calendar year record of 49.5 percent at the height of the tech boom in 1999.

It's a similar picture in the tech, media and telecom (TMT) sector, where mega deals so far this year stand at $401 billion, or nearly two-thirds of the TMT total. That's on track to beat the previous record of 59.2 percent in 1999.

Mega deals are defined as a deal valued at $5 billion or more.

One the one hand, a surge of mega M&A at the tail end of the cycle is to be expected. Companies can't sustain the growth rates of previous years, so executives look to grow by acquisition to keep shareholders happy.

But therein lie the pitfalls, as companies take on greater debt and risk. And some executives simply get sucked in by the whole boom: bigger is better, the good times will go on forever, and this time really is different.

The RBS-led $98 billion takeover of ABN Amro in 2007, Mannesmann's $202 billion takeover of Vodafone in 1999 and Time Warner's $181 billion tie-up with America Online in 2000 are all classic examples of executive hubris, chutzpah and ultimately, folly.

That does not apply to all mega deals, of course, far less the thousands of smaller transactions that are carried out on a more routine basis. But investors looking for warning signs and comparisons with the late '90s don't have far to look.

The Nasdaq continues to boom while the rest of Wall Street is showing signs of burnout. The tech-heavy benchmark is up 12 percent this year, the S&P 500 is up 3 percent and the Dow is flat. The S&P 500 and Dow have failed to revisit their January peaks, but the Nasdaq has made nine record highs since, the last of which was last week.

According to Bank of America Merrill Lynch's monthly survey of global fund managers, the most crowded trade in June was "long FAANG + BAT" for the fifth month in a row. It's the most crowded of any trade since December 2015, BAML said.

The acronyms 'FAANG + BAT' refer to the US tech giants Facebook, Apple, Amazon, Netflix and Google, plus the Chinese firms Baidu, Alibaba and Tencent.

The market cap of the five FAANG stocks currently stands at $3.915 trillion. That's more than the valuation of the entire UK stock market, which today stands at $3.38 trillion.

The US tech sector now has a market cap of $6.6 trillion, according to BAML. That's big enough on its own, but even more staggering in a global context: China's tech sector market cap is $738 billion, Europe's is $533 billion and Japan's is $452 billion.

Parallels with 1999? Maybe. But as some analysts note, total returns on Wall Street today are much lower than they were 20 years ago, valuations still aren't as high, and speculation isn't as intense. The tech industry today is much more mature than it was back then, too.

The mega deal frenzy underway now, however, is more than enough reason for caution.

source: news.abs-cbn.com

AT&T closes $85 billion deal for Time Warner

WASHINGTON -- AT&T Inc, the No. 2 wireless carrier, on Thursday closed its $85 billion deal to acquire media company Time Warner Inc after US antitrust regulators indicated they would not seek a delay.

The deal, first announced in October 2016, was opposed by President Donald Trump. AT&T was sued by the Justice Department, but won approval from a judge to move forward with the deal on Tuesday following a six-week trial.

The Justice Department still has 60 days to appeal the decision by US District Judge Richard Leon, even though the deal has closed.

Leon of the US District Court for the District of Columbia ruled on Tuesday that the deal to marry AT&T's wireless and satellite businesses with Time Warner's movies and television shows was legal under antitrust law. The Justice Department had argued the deal would harm consumers.

US President Donald Trump, a frequent critic of Time Warner's CNN coverage, denounced the deal when it was announced in October 2016.

In its lawsuit aimed at stopping the deal, filed in November 2017, the Justice Department said that AT&T's ownership of both DirecTV and Time Warner, especially its Turner subsidiary, would give AT&T unfair leverage against rival pay TV providers that relied on content like CNN and HBO's "Game of Thrones."

The AT&T ruling is expected to trigger a wave of mergers in the media sector, which has been upended by companies like Netflix Inc and Alphabet Inc's Google.

The first to come was Comcast Corp's $65 billion bid on Wednesday for the entertainment assets of Twenty-First Century Fox Inc.

AT&T had been worried about closing its deal ahead of a June 21 deadline if the government won a stay pending an appeal. Any stay could take the deal beyond a June 21 deadline for completing the merger, which could allow Time Warner to walk away or renegotiate the proposed transaction with AT&T.

The government may have a difficult time winning on appeal because of the way Judge Leon wrote his opinion, four antitrust experts said.

"I don't think this would be overturned. It is so rooted in the facts that I would be surprised if an appellate court overturned such a fact-laden opinion," said Michael Carrier, who teaches law at Rutgers.

In a scathing opinion, Leon found little to support the government's arguments that the deal would harm consumers, calling the evidence for one argument against the deal "gossamer thin" and another "poppycock."

The merger, including debt, would be the fourth largest deal ever attempted in the global telecom, media and entertainment space, according to Thomson Reuters data. It would also be the 12th largest deal in any sector, the data showed.

source: news.abs-cbn.com

Huawei says botched US deal a loss for consumers

Chinese electronics giant Huawei has rued how a planned partnership with US carriers fell through, saying it deprived consumers of the "best choice."

On the eve of the launch of Huawei's flagship Mate 10 Pro at the Consumer and Electronics Show in Las Vegas, media reports said a deal with AT&T fell through, leaving the Chinese firm to sell the phone unlocked and without carrier subsidies.

"I think it's a big loss for us and also for carriers, but more (a) big loss for consumers because consumers don't have the best choice," said Richard Chen, CEO of the company's consumer division.

Chen said Huawei in recent years had risen from an unknown brand to the world's third largest smartphone vendor, next only to market leader Samsung and Apple.

"We are winning the trust of global consumers, Europe and developing countries," Chen told his audience at the CES in Las Vegas. "Unfortunately, we cannot have this from (US) carriers."

Huawei has "improved our security, privacy protection," Chen said.

Lawmakers in the US had expressed concerns over data privacy regarding Huawei, which also provides telecommunications infrastructure, according to a letter from the US House and Senate intelligence panels that was seen by news agency AFP.

An editorial in the official China Daily last week attributed the termination of the Huawei-AT&T deal to political pressure instead of business considerations, and said this scuppers the kind of win-win deals China has always sought.

"This is not the first time US politicians have stooped to mudslinging to prevent the entry of Chinese high-tech companies into the US market on the pretext they pose national security threats," said the China Daily.

China's commerce ministry also said protectionist sentiment was rising in the United States after Chinese company Ant Financial's plan to buy US money transfer firm MoneyGram International Inc collapsed.

In the Philippines, Huawei sells its phones unlocked and through carriers Globe and Smart.

Smart parent PLDT Inc said it forged a $28-million ($1.4 billion) deal with Huawei to improved its services.

source: news.abs-cbn.com

US sues to block $85 billion AT&T-Time Warner merger

WASHINGTON - The US government filed suit Monday to block AT&T's merger with Time Warner, setting up the biggest antitrust court clash in decades over the $85 billion tie-up.

The deal announced more than a year ago would merge vast content of Time Warner units like premium cable channel HBO and news channel CNN with the massive internet and pay TV delivery networks of AT&T.

"This merger would greatly harm American consumers. It would mean higher monthly television bills and fewer of the new, emerging innovative options that consumers are beginning to enjoy," said Makan Delrahim, head of the Justice Department's antitrust division.

Delrahim said AT&T with its DirecTV satellite operations and Time Warner's content "would have the incentive and ability to charge more for Time Warner's popular networks and take other actions to discourage future competitors from entering the marketplace altogether."

Critics of the deal had said it would give too much power over the media industry to a single firm and enable AT&T to withhold key content from rivals or raise prices.

AT&T said it planned to challenge the government's lawsuit, arguing that it was seeking a "vertical" merger without competitive overlap which should be approved based on legal precedent.

Randall Stephenson, AT&T's chairman and chief executive, said the antitrust enforcers were ignoring "decades of clear legal precedent" and failed to take into account the "radical change" in the sector in which internet platforms like Netflix are transforming how media is consumed.

ALL ABOUT CNN?

The deal has also stirred up political concerns: Reports earlier this month said the government was prepared to approve the deal if AT&T would divest CNN, which has been a frequent target of President Donald Trump, who has attacked the network as "fake news."

During the election campaign, Trump vowed to blocked the merger that would have some 142 million subscribers and a vast catalog of television, film and sports content.

Stephenson, at a news conference, reaffirmed his opposition of divesting CNN to win approval.

"There's been a lot of reporting and speculation whether this is all about CNN, and frankly i don't know," he said.

"But nobody should be surprised that the question keeps coming up, because we have witnessed such an abrupt change in the application of antitrust law."

AIMING FOR SYNERGIES

Stephenson said he would have preferred a negotiated settlement with the Justice Department, but that any deal would not involve the divesting of CNN or the HBO premium video channel.

That is because AT&T -- one of the largest telecom and pay TV operators -- wants to boost its ability to marry content and advertising and better compete with the likes of Facebook, Google and Netflix.

"That's where the synergies come from," Stephenson said last week.

AT&T has also argued its merger would mirror a similar merger between cable giant Comcast and media-entertainment group NBCUniversal, which won approval with certain conditions.

But last week, Delrahim said in a speech he wanted to avoid "behavioral" remedies in mergers, stating "antitrust is law enforcement, it's not regulation."

Daniel Petrocelli, a lawyer for AT&T, said the government had the burden of proof to show it would hurt competition.

"This is a classic vertical merger, combining of two companies that do not compete with each other," he said. "It should pose no antitrust problem."

But Gene Kimmelman of the consumer group Public Knowledge welcomed the lawsuit, warning a merger would hurt consumers.

"The combined company would have the incentive and ability to harm rival video distributors and programmers, threatening the competitive future of online video, while giving the new company the ability to withhold programming or drive up prices for other satellite and cable players," Kimmelman said.

Craig Aaron of the consumer group Free Press said "blocking this merger is the right thing to do -- and we hope the Justice Department is doing it for the right reasons."

BTIG Research analyst Richard Greenfield said the Comcast-NBCU deal might have "poisoned the water" for AT&T, noting that there was a perception Comcast has stretched the interpretation of its agreements.

"While the Department of Justice chose to approve the Comcast NBCU transaction, it put in place a seven-year consent decree to protect competitors, and ultimately consumers, from the antitrust risks posed by the transaction," Greenfield added.

source: news.abs-cbn.com

AT&T, Verizon join Google ad boycott

WASHINGTON - AT&T and Verizon on Wednesday joined global firms pulling ads from Google, saying they did not want their brands associated with inappropriate content on the internet giant.

The moves by the two US telecom giants came despite a pledge by Google this week to offer new tools for companies to avoid placing ads alongside undesirable websites or videos.

"We are deeply concerned that our ads may have appeared alongside YouTube content promoting terrorism and hate," an emailed statement from AT&T said, indicating it was removing non-search ads from Google.

Verizon said it discovered its ads were appearing on "non-sanctioned websites," and that it takes "careful measures to ensure our brand is not impacted negatively."

A Verizon spokeswoman said in an email: "We took immediate action to suspend this type of ad placement and launched an investigation. We are working with all of our digital advertising partners to understand the weak links so we can prevent this from happening in the future."

The announcements follow similar actions from the British arm of Havas, one of the world's top advertising agencies, as well as banking giant HSBC, retailer Marks & Spencer, the BBC and the Guardian newspaper group.

On Monday, Google apologized for the placement of ads on extremist content and pledged it would address the concerns.

"We know advertisers don't want their ads next to content that doesn't align with their values," Google's chief business officer Philipp Schindler said in a blog post.

Asked about the latest actions, Google said in a statement to AFP it did not comment on specific customers but noted that "we've begun an extensive review of our advertising policies and have made a public commitment to put in place changes that give brands more control over where their ads appear."

The company added that it is "raising the bar for our ads policies to further safeguard our advertisers' brands."

The boycott began last week after the Times newspaper of London found BBC programs were promoted alongside videos posted by American white supremacist and former Ku Klux Klan member David Duke as well as videos by Wagdi Ghoneim, an Islamist preacher banned from Britain for inciting hatred.

The analysis found more than 200 anti-Semitic videos, and that Google failed to remove six of them within the 24-hour period mandated by the EU when it anonymously signalled their presence.

The British government subsequently put its YouTube advertising on hold on Monday, saying in a statement, "it is totally unacceptable that taxpayer-funded advertising has appeared next to inappropriate internet content -- and that message was conveyed very clearly to Google."

source: news.abs-cbn.com

AT&T unveils DirecTV Now streaming service ahead of Nov. 30 launch

NEW YORK - AT&T Inc., the largest US TV provider, took the wraps off its new DirecTV Now streaming service on Monday, two days before it enters the online video service market to win subscribers who shun pay-television subscriptions.

DirecTV Now will launch at prices ranging from $35 a month for over 60 channels to $70 for over 120 channels, AT&T said. For a limited time, more than 100 channels will be available for $35, the company said.

AT&T announced the subscription video service in March, promising on-demand and live programming from many networks over the Internet, similar to Sling TV and PlayStation Vue. But details on the service had been limited.

AT&T is counting on the mobile video market for new revenue as most US consumers already have wireless service and further growth is limited. AT&T acquired DirecTV for $48.5 billion last year, making it the largest US pay-TV operator with 25.3 million video subscribers, in an effort to diversify into the media and entertainment business.

AT&T also plans to buy Time Warner Inc. for $85.4 billion to gain control of premium content from networks such as HBO, as online video competition is expected to heat up.

"It is really important to understand that this is the foundation for how we are going to do things in the future," John Stankey, chief executive of AT&T's entertainment group, said at a media event in New York.

DirecTV Now will help AT&T target a new market segment, including consumers who cannot pass credit checks for pay-TV subscriptions and those who shun pricey pay-TV connections, Stankey said.

DirecTV Now content will include live and on-demand video from Walt Disney Co., Twenty-First Century fox, Viacom Inc. and Scripps Networks Interactive, AT&T has said. The company is actively working to bring CBS Corp. programming to its service, executives said on Monday.

source: news.abs-cbn.com

AT&T to buy Time Warner for $85 billion, create telecom-media giant

NEW YORK - AT&T Inc (T.N) said on Saturday it agreed to buy Time Warner Inc (TWX.N) for $85.4 billion, the boldest move yet by a telecommunications company to acquire content to stream over its high-speed network to attract a growing number of online viewers.

The biggest deal in the world this year will, if approved by regulators, give AT&T control of cable TV channels HBO and CNN, film studio Warner Bros and other coveted media assets. The tie-up will likely face intense scrutiny by U.S. antitrust enforcers worried that AT&T might try to limit distribution of Time Warner material.

AT&T will pay $107.50 per Time Warner share, in a combination of cash and stock, worth $85.4 billion overall, according to a company statement. AT&T said it expected to close the deal by the end of 2017.

Dallas-based AT&T said it and Time Warner were determining which Federal Communications Commission licenses, if any, would be transferred to AT&T in the deal.

Several U.S. lawmakers were already worried about cable company Comcast Corp's (CMCSA.O) $30 billion acquisition of NBCUniversal, creating an industry behemoth. They argued for close regulatory scrutiny of the AT&T deal.

U.S. Republican presidential nominee Donald Trump, who has complained about media coverage of his campaign, said at a rally on Saturday he would block any AT&T-Time Warner deal if he wins the Nov. 8 election.

"It's too much concentration of power in the hands of too few," said Trump.

Representatives of his Democratic rival, Hillary Clinton, did not immediately respond to a request for comment.

CONTENT PLUS DELIVERY

AT&T, whose main wireless phone and broadband service business is showing signs of slowing, has already made moves to turn itself into a media powerhouse. It bought satellite TV provider DirecTV last year for $48.5 billion.

It had about 142 million North American wireless subscribers as of June 30, and about 38 million video subscribers through DirecTV and its U-verse service.

New York-based Time Warner is a major force in movies, TV and video games. Its assets include the HBO, CNN, TBS and TNT networks as well as the Warner Bros film studio, producer of the “Batman” and “Harry Potter” film franchises. The company also owns a 10 percent stake in video streaming site Hulu. The HBO network alone has more than 130 million subscribers.

The deal is the latest in the consolidation of the telecom and media sectors, coming on the heels of AT&T's purchase of NBCUniversal. AT&T's wireless rival Verizon Communications Inc (VZ.N) is in the process of buying internet company Yahoo Inc (YHOO.O) for about $4.8 billion.

Time Warner Chief Executive Officer Jeff Bewkes rejected an $80 billion offer from Twenty-First Century Fox Inc (FOXA.O) in 2014.

5G IS COMING
Owning more content gives cable and telecom companies bargaining leverage with other content companies as customers demand smaller, hand-picked cable offerings or switch to watching online. New mobile technology including next-generation 5G networks could make a content tie-up especially attractive for wireless providers.

"We think 5G mobile is coming, we think 5G mobile is an epic game-changer," Rich Tullo, director of research at Albert Fried & Co, said in a research note, adding that mobile providers would be in position to disrupt traditional pay-TV services.

A previous Time Warner blockbuster deal, its 2000 merger with AOL, is now considered one of the most ill-advised corporate marriages on record.

(Additional reporting by David Shepardson, Liana Baker, Malathi Nayak and Diane Bartz; Writing by Bill Rigby; Editing by David Gregorio)

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