AT&T Names John Stankey C.E.O. as Randall Stephenson Plans to Retire

AT&T, the telecommunications giant that has moved into media and entertainment, announced a changing of the guard on Friday.

John Stankey, a veteran of the company, will become its new chief executive starting July 1. He will take the reins from Randall L. Stephenson, who has led AT&T since 2007.

Mr. Stankey, 57, became the chief operating officer last October and has managed the bulk of the company’s operations since then. Before that, he led AT&T’s move into the media and entertainment industries after its $85.4 billion purchase of Time Warner, the home of CNN, HBO and the Warner Bros. movie studio, in 2018.

Mr. Stephenson, 60, will stay on as executive chairman of the board through this year, the company said in a statement.

“I’ve worked closely with John for well over 20 years,” Mr. Stephenson said in a video addressed to the company’s 244,000 employees on Friday. “I’ve asked him to take on some of our biggest challenges, and each time he’s delivered.”

Mr. Stankey called it a “privilege” to work at AT&T. In a separate statement, he added: “I can honestly say I didn’t see this in the cards nearly 35 years ago when I joined the company handling customer requests for phone service.”

Mr. Stankey, a California native, started his career in 1985, at Pacific Bell. He has spent much of his time in Texas, working out of AT&T’s former headquarters in San Antonio until the company moved its main offices to Dallas in 2008. A self-described “Bell-head,” he is known for a deep voice, blunt manner and a tendency to speak in technical jargon. He once led AT&T’s wireline operations and oversaw DirecTV, the satellite TV service acquired by the phone giant in 2015.

That division has suffered major declines as customers have defected to cheaper, online alternatives such as Netflix. The migration of viewers to streaming prompted AT&T’s acquisition of Time Warner and the multi-billion-dollar development of HBO Max, the streaming service that is scheduled to make its debut on May 27.

As the leader of AT&T’s WarnerMedia division from the time of the merger until recently, Mr. Stankey stepped out of the relatively anonymous role of telecommunications executive and into the media glare. He made visits to New York, Washington and Los Angeles as he brought the AT&T ethos to CNN, HBO, the Turner cable channels and Warner Bros.

In his 20 months at the WarnerMedia helm, Mr. Stankey refashioned the division to focus on streaming and dissolved the borders between the conglomerate’s separate units. On his watch, the gregarious longtime HBO chief Richard Plepler left the company and signed a five-year deal to produce shows and films for Apple TV Plus.

Mr. Stankey has had his detractors. Not long after he was named to lead the media business, Elliott Management, one of Wall Street’s biggest and most aggressive hedge funds, bought a $3.2 billion stake in AT&T and sharply criticized its strategy. Elliott took direct aim at Mr. Stankey.

After he was named chief operating officer and president in October, the hedge fund noted with disapproval that Mr. Stankey “would now also be responsible for an additional $145 billion of revenue as the president and C.O.O. of the entire company.”

The tone has shifted since then. Elliott backed off after Mr. Stephenson agreed to some of its suggestions, and on Friday, the hedge fund announced its support of Mr. Stankey’s appointment as chief executive.

“We look forward to working with John as he begins his term as C.E.O.,” said Jesse Cohn, the Elliott partner who led its investment in AT&T.

The timing of Mr. Stankey’s appointment was a surprise. In October, Mr. Stephenson outlined a three-year plan designed to increase the company’s revenue that included his staying on as chief executive through 2020, rather than bowing out earlier, as he had planned. At the same time, the company started searching for a new chief executive, as well as someone to replace Mr. Stankey as head of WarnerMedia. For the WarnerMedia job, AT&T settled on Jason Kilar, the former head of Hulu. He will take charge of that part of the company in May.

The board concluded its search for a new AT&T chief executive this month, much earlier than planned, and decided to announce Mr. Stankey as the new head right away. The company said Mr. Stephenson had said he would remain in the job for a year to give the board time to conduct its search.

President Trump, who has repeatedly lashed out at CNN for its coverage of him, called Mr. Stephenson’s departure “Great News!” on Twitter. In the first years of his presidency, as he railed against the news network on social media and at rallies, the Justice Department unsuccessfully sued to block AT&T’s merger with Time Warner. AT&T declined to comment on Mr. Trump’s remarks.

For most of his career, Mr. Stankey was little known outside the telecommunications sphere, but quickly drew attention after AT&T’s blockbuster acquisition of Time Warner. He learned just how heavily the media industry was scrutinized when video of a sometimes awkward and tension-filled town hall gathering of HBO employees featuring Mr. Stankey and Mr. Plepler was leaked to The New York Times.

After the initial splash, Mr. Stankey went to work behind the scenes, installing his own leadership team piece by piece.

He inherits an empire that encompasses telecommunications, media, technology and distribution. The company’s valuation exceeds $209 billion, but its key wireless business has started to slow down as pricing wars with its competitors Verizon and T-Mobile have dampened revenue. T-Mobile became a hefty challenger when it closed its acquisition of Sprint this month.

The fight for customers among the major wireless carriers has driven subscription prices downward. The average monthly wireless bill has fallen by over 25 percent in the past decade, according to data from the Bureau of Labor Statistics. Wireless carriers still enjoy fat profits, but they have flattened or declined in recent years.

AT&T, the nation’s second-largest wireless carrier, with 79 million customers, took a hit from the coronavirus pandemic in the first quarter, with revenue falling by $600 million and profit down by $360 million, mostly because of the loss of sports programming at its Turner division. But the company also clawed back some of the licensing fees it paid the N.C.A.A. after the annual men’s basketball tournament was canceled, accounting for the bulk of $420 million in cost savings at Turner.

Mr. Stankey is also the heir to the plan laid out by Mr. Stephenson in October. It calls for a review of AT&T’s sprawling set of businesses to see which ones can be sold, including DirecTV, and an assurance it would pay the debt associated with its acquisition of Time Warner.

HBO Max, the planned streaming service that will be the exclusive online home of HBO’s “Game of Thrones,” the Warner Bros. sitcom “Friends” and the Warner Bros. “Harry Potter” film franchise, is also crucial to the company’s success. To prevent customers from defecting to other wireless carriers, AT&T plans to bundle HBO Max into its higher-end plans and offer promotional discounts for its lower-priced tiers.

Mr. Stephenson departs with a windfall retirement package. He has a pension valued at $64 million with an additional $27.6 million in deferred earnings.

Mr. Stankey made $17.8 million in compensation for 2019, but his employment agreement as chief executive will likely be higher. The company has yet to announce his new pay.