AT&T CEO Steps Down After Bungled, Megamerger-Fueled TV Failure

So we've noted a few times how giant telecom providers, as companies that have spent the better part of the last century as government-pampered monopolies, are adorable when they try (then inevitably fail) to innovate or seriously compete in more normal markets. Verizon's attempt to pivot from curmudgeonly old phone company to sexy new ad media darling, for example, has been a cavalcade of clumsy errors, missteps, and wasted money.

AT&T has seen similar issues. Under CEO Randall Stephenson, AT&T spent more than $150 billion on mergers with DirecTV and Time Warner, hoping this would secure its ability to dominate the pay TV space. But the exact opposite happened. Saddled with so much debt from the deal, AT&T passed on annoying price hikes to its consumers. It also embraced a branding strategy so damn confusing -- with so many different product names -- it even confused its own employees.

As a result, AT&T lost 3,190,000 pay TV subscribers last year alone. Not exactly the kind of "domination" the company envisioned.

Stephenson's failures on this front were so pronounced, even the company's investors got angry about how much money AT&T spent on questionable mergers. And late last week, Stephenson himself announced (not coincidentally) he'd now be retiring, though AT&T's farewell letter understandably addresses none of these recent headaches:

"Randall has done an outstanding job as CEO in transforming AT&T into a leader in communications, technology, and media and entertainment. His strong leadership and strategic investments during a period of unprecedented customer demand for mobile communications and premium entertainment have positioned the company extremely well for the years ahead. We look forward to Randall continuing to lead the Board and working with John to ensure a smooth leadership transition."

Until now, it's only AT&T customers and employees who had to pay the price for Stephenson's missteps. You'll recall AT&T received a whopping $42 billion in savings from the Trump tax cuts, promising a universe of new jobs and investment in return. In reality though, AT&T has laid off some 37,000 employees and slashed its 2020 CAPEX by some $3 billion as it attempts to dig out from under the mountain of debt Stephenson's merger ambitions helped create.

Stephenson, who pulled in $32 million in compensation last year despite his TV face plant, spearheaded no shortage of other controversies during his tenure. Like that time his top lobbying and policy man, Bob Quinn, was busted paying $600,000 to Trump "fixer" Michael Cohen to gain additional access to the President. Or AT&T's lobbying attack on net neutrality, privacy rules, and the FCC in general, which netted AT&T billions in regulatory favors, to be sure, but pissed off the majority of Americans -- especially the part involving ample fraud and identity theft by K street firms employed, in part, by AT&T.

Under Stephenson's watch AT&T has also been: fined $18.6 million for helping rip off programs for the hearing impaired, fined $10.4 million for ripping off a program for low-income families, and fined $105 million for helping "crammers" by intentionally making such bogus charges more difficult to see on customer bills. And that's before you get to the fines AT&T had to pay for failing to secure sensitive user wireless location data.

Ah, memories! Stephenson't replacement, John Stankey, is being lauded by the press as "blunt" for statements such as these:

"When pitching AT&T’s new HBO Max streaming platform, he told the audience that anyone unwilling to pay $15 a month for the service had a low IQ. At a town hall with HBO employees last year, Stankey said the network had to dramatically increase its programming output, comparing the work ahead to childbirth. Once, when a Time Warner veteran criticized an idea during a meeting, Stankey replied, “I know more about television than anybody."

Great. Good luck with that.