AT&T Shakes Up WarnerMedia Unit, Cuts Costs and Consolidates Operations

Former NBC Entertainment Chairman, Robert Greenblatt appointed as Programming Czar

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AT&T Inc. said it is shaking up its WarnerMedia unit, doing away with an outdated structure in a bid to make the company more competitive in an entertainment industry reshaped by consolidation and technology.The reorganization announced Monday breaks up the company's Turner unit, whose parts will be absorbed by other divisions. In another significant move, a programming czar has been put in place to guide the creative operations at HBO, Turner and a new streaming service WarnerMedia is launching later this year.

Former NBC Entertainment Chairman Robert Greenblatt, who was appointed to that programming position Monday, will have full discretion when it comes to deciding where any WarnerMedia-produced content runs, WarnerMedia Chief Executive John Stankey said in an interview. When AT&T agreed to buy it in 2016, the company -- then known as Time Warner -- owned three businesses that all produced content but operated with full autonomy: HBO, Turner and Warner Bros.

That structure, Mr. Stankey said, was a relic of a bygone era and prompted the company to make some changes. The unit once known as Turner -- which included TNT, TBS, CNN and the Cartoon Network was essentially dissolved. TNT, TBS and other channels will be part of Mr. Greenblatt's entertainment business, alongside HBO. Cartoon Network, Adult Swim and their merchandise and licensing units will be absorbed by Warner Bros., while CNN will be part of a newly created sports and news division.

The overhaul significantly expands the portfolio of Warner Bros. Chairman and Chief Executive Kevin Tsujihara, who on top of Turner's animation business will gain oversight of Turner Classic Movies. By combining Turner's animation operations with Warner Bros.' DC Entertainment, AT&T is looking to create a new global children's programming and videogame behemoth. The moves also raise the profile of CNN chief Jeff Zucker, who became chairman of WarnerMedia News and Sports, and of Turner's president of international operations, Gerhard Zeiler, now chief revenue officer in charge of distribution and advertising for the cable-networks group. All three men will report directly to Mr. Stankey, the WarnerMedia CEO, as will Mr. Greenblatt.

In a written statement, Mr. Stankey said Messrs. Greenblatt, Zucker, Tsujihara and Zeiler "collectively have more than 80 years of global media experience and success."The restructuring of WarnerMedia is expected to lead to cost-cutting and staff reductions, people familiar with the matter said. Trimming costs and streamlining operations are crucial for AT&T, which is saddled with about $170 billion in net debt, the most of any nonfinancial U.S. company. After AT&T announced its plans to acquire Time Warner in 2016, it projected $1.5 billion in annual cost savings and a further $1 billion in "revenue synergies."

The deepest cuts are likely to occur at Turner, which accounted for roughly as much operating income at Time Warner as HBO and Warner Bros. combined. The consolidation could force more jobs to relocate from Turner's longtime base in Atlanta, where AT&T had already been closing offices in its own telecom division before the merger, choosing to focus on its Dallas headquarters as well as expanding its presence in New York and Los Angeles.

The moves are AT&T's first significant steps since it closed on its $80 billion-plus acquisition of Time Warner in June. Last week, in anticipation of the changes, HBO Chairman and Chief Executive Richard Plepler and Turner President David Levy announced their resignations.