Excerpt

Inside the Merger That Could Have Ended HBO as We Know It

When telecom giant AT&T inherited the most prestigious brand in American TV in 2018, all eyes were on two men: HBO CEO Richard Plepler and his new boss, consummate company man John Stankey. As Felix Gillette and John Koblin report in this exclusive excerpt from their new history of the network, Plepler and Stankey’s brief, tenuous time together straddled a crucial moment in HBO history—and saw both depart within a matter of years.
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Richard Plepler stood onstage at a theater at HBO’s New York headquarters and gazed around the bustling room. Dozens of HBO employees were taking their seats. It was midday on a Tuesday in June 2018. Only five days earlier, a federal judge had ruled in AT&T’s favor over the Justice Depart­ment, paving the way for the phone company to complete its $85.4 billion acquisition of HBO’s parent company, Time Warner.

After twenty months stuck in perilous limbo, HBO staffers were finally ready to meet the new owners.

Plepler, in a blue sport coat with a bright white pocket square, welcomed everyone to the town hall meeting. By that point, he had clocked 26 years at the network, and had been the network’s chief executive since 2013. For more than two decades, he had been the network’s top cheerleader. For the next hour, he explained, he’d be discussing the future with his new boss, John Stankey, a top AT&T execu­tive who was leading the telephone company’s charge into the programming business.

Since the deal was announced in 2016, Plepler had one consistent message to AT&T executives: Leave HBO alone. At the time, Plepler said that “the last thing they have any interest in doing is messing with a winning game,” and urged AT&T executives to maintain a “Chinese wall” between its Dallas operations and HBO’s properties in New York and California. Some HBO executives wondered whether that would be an effective strategy. Now there was an opportunity to see how Plepler and Stankey were getting along.

Stankey, a bald-headed, broad-shouldered Texan, was wearing oval glasses, a drab sports jacket, and pleated, brown dress pants. He climbed onstage and folded his sturdy six-foot-five-inch frame into a seat next to Plepler. Stankey had been a veteran of the telecom industry since the mid-1980s. Just recently, he had completed stints as AT&T’s chief technology officer and as the head of its struggling DirecTV unit. In front of the HBO crowd, Stankey referred to himself as a “Bell head”—a telecom lifer. It was a term that sounded altogether alien to the HBO crew.

In nearly every way, Stankey and Plepler came across as opposites. Plepler was on the board of the Council on Foreign Relations; Stankey sat on the board of UPS. Plepler was a creature of New York and Connecticut who played tennis; Stankey lived in Dallas and enjoyed the occasional bird-hunting or fly-fishing expedition. Plepler was a cultural omnivore; Stankey watched college football and little else. Plepler was an avowed Democrat; Stankey was a longtime donor to Republican campaigns.

Looking out over the room of progressive New Yorkers, with his big hands occasionally chopping the air in front of him for emphasis, Stankey spoke about corporate culture and compensation and potential human re­source redundancies. In a deep baritone voice, he invoked “efficiencies,” “mar­ginal cost structures,” and “binomial distributions.” With a note of chagrin, Stankey grumbled about how newspapers were suddenly so interested in his personal life. “You’re now in the entertainment business, John,” Plepler interjected. “There are no secrets.”

VeepFrom Alamy.

Together, HBO and AT&T could conquer this brave new world, he con­tinued. But to succeed, the network needed to reach more customers: 35 to 40 percent of the U.S. market was no longer enough. HBO would need to transform its premium brand into something more broadly appealing. The era of ruling Sunday nights had passed. One night a week would no longer cut it. “We need hours a day,” Stankey said. “It’s not hours a week, and it’s not hours a month.”

Plepler noted that, in recent years, the network had done the best job it could with the hand he was dealt. At times, he said, the network had been outbid for programming, which was frustrating. He cited House of Cards as an example. “I don’t need to tell you what Netflix is spending internation­ally,” Plepler said. Stankey appeared sympathetic, to a point. Yes, Plepler was right. To compete on a global level in the new streaming era of home entertainment, AT&T would need to step up investment in the network. “We’ve also got to make money at the end of the day, right?” Stankey said.

“We do that,” Plepler responded.

“Yes, you do,” Stankey said. “Just not enough.”

“Oh no,” Plepler said. “Be careful.”

As the tension in the room simmered, both men kept fidgeting, speak­ing with their hands and recrossing their legs. There was little eye contact. The next year, Stankey told the crowd, would be a difficult one for HBO. The old way of doing business wouldn’t cut it anymore. The industry was being disrupted by Silicon Valley. He didn’t mention Netflix by name. But he didn’t have to. “You will work very hard, and this next year will—my wife hates it when I say this—feel like childbirth,” he said.

Afterward, some HBO staffers walked out of the room in a bit of a daze. Plepler would later tell people it was apparent to him after that first, fraught town hall meeting with Stankey that it was not going to work out for him. He would leave the network eight months later.

Tall and gregarious, Plepler was always described in the press, without fail, as perma-tanned, an apt description, which he hated. Plepler grew up in Manchester, Connecticut, just outside of Hartford, the elder brother in a liberal family that was active in Democratic politics. He attended Franklin & Marshall, a small liberal arts college in Lan­caster, Pennsylvania, where he studied government and played on the tennis team. After graduating in 1981, he moved to Washington, D.C., to work for Christopher Dodd, the U.S. senator for Connecticut.

Plepler moved to New York in 1984, and soon began working for John Scanlon, a charming, well-read publicist with a bottomless appetite for networking. Scanlon seemed to know everybody in media, entertainment, and journalism. His electric group of close friends included the Irish poet Seamus Heaney, the newspaper col­umnist Pete Hamill, and ABC Evening News anchor Peter Jennings. “John played a huge role in my inauguration to the city,” Plepler says.

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Working under Scanlon, Plepler gained an orientation toward the news profession that would guide his future career. Some of Scanlon’s competitors were merely publicists, says Plepler. Scan­lon was a strategist. Within two years, Plepler branched out on his own, opening a public relations firm with a fairly grandiose name belying his relative inexperience: RLP International. At the beginning, Plepler was its sole employee. With time, his clients grew to include a wonky mix of Democratic politicians and highbrow media outlets like Mort Zuckerman’s Atlantic Monthly and HBO.

Plepler joined Time Warner as a full-time public relations executive in 1992 and began working closely with HBO’s powerful chairman, Michael Fuchs. Plepler, like Scanlon, was a fervent believer in the power of personal relation­ships to advance one’s cause. At HBO, Plepler became an advocate for a strategy that he sometimes called the “permanent campaign.” The basic idea was that you didn’t wait until the feverish onset of a crisis to figure out who you needed to court and win over to defend you publicly in your moment of need. It was much more effective to have already invested the time and energy, under cooler circum­stances, in courting those influential members of public opinion, much bet­ter to have already forged a bond.Every lunch, every dinner, every film premiere was an opportunity to sit down with someone of note in public office or the press and start building a foundation of mutual understanding and respect.

Plepler would tell his colleagues that, unlike the free broadcast networks, HBO couldn’t afford to take a single day off from advancing its cause. There was no off-season for HBO. If a customer wasn’t satisfied with the network, they could cancel the service just like that. HBO, Plepler would say, “needed to be elected every month.” Before long, Fuchs was regularly taking counsel from Plepler, who quickly became known inside the company as much more than a public relations guy. He was a key HBO strategist and Fuchs’s esteemed consigliere.

“I saw myself in those early days as a campaign manager,” Plepler says. “And Michael was the candidate.”

When Fuchs was fired in 1995, Plepler grew close to his successor, Jeff Bewkes. In the decade that followed, with HBO broadcasting series like The Wire, The Sopranos, and Sex and the City, the company’s fortunes soared. As did Plepler’s.

By June 2007, HBO was adrift.

The media, already churning with speculation on how the network could survive the coming end of The Sopranos, escalated into a frenzy over its uncertain future in the wake of the sudden departure of chief executive Chris Albrecht, days after he was arrested in Las Vegas for assaulting his girlfriend. (He later pleaded no contest to misdemeanor battery.) With the network at a risky crossroads, HBO named Bill Nelson, the network’s in-house risk manager, as his successor.

Beneath Nelson, HBO appointed a troika of co-presidents: Eric Kessler, the head of marketing and sales, Harold Akselrad, the network’s general counsel, and Plepler. Of HBO’s three new co-presidents, it was Richard Plepler whose job description was changing the most. In addition to running HBO’s commu­nications, he would now be overseeing HBO’s programming decisions. He would be helped on the West Coast by Michael Lombardo, a lawyer who had joined the network in the 1980s and spent much of his career working on business affairs.

Because HBO was traditionally a creative-led company, the move set Plepler up to possibly take over the network for good—that is, if HBO’s lineup didn’t flop miserably. Which was no sure thing. For the first time in forever, the slate of future shows looked dreary. “There was nothing coming out in 2007 that was stunning,” Nelson says. Within months of taking over, Plepler and Lombardo met with skeptical TV critics and reporters at a press conference for the first time.

True Blood Courtesy of HBO. 

“I can remember sitting up onstage with Lombardo and somebody es­sentially saying, ‘Hey, your big shows are off the air, what do you got?’ And the implicit question was: ‘Who are you guys? What do you know?’” Plepler says. “I said, look, there’s not a Bewkes philosophy or a Chris Albrecht phi­losophy, or, for that matter, a Richard Plepler or Lombardo philosophy. There’s an HBO philosophy. And that philosophy is to bet on great writers and great talent and to have a shared vision of what constitutes an original voice.”

That bet paid off. Piece by piece, over the next decade, Plepler and Lombardo would rebuild HBO’s lineup. The period included series like True Blood, Boardwalk Empire, Girls, Veep, Silicon Valley, and Game of Thrones. Over the decade there would be challenges—Netflix ascended into a Hollywood heavyweight, HBO gingerly entered the streaming wars after a series of technological setbacks—but Plepler survived. Until AT&T came along.

Shortly after assuming power, Stankey sent out a memo to top Time Warner execu­tives, including Plepler, describing the ways he preferred to in­teract with staff. The memo was awkwardly titled “Operating Cadence and Style.” “I am not a big fan of meetings,” wrote Stankey.

Entertainment executives often preferred to convene at a relaxed pace over lunch or dinner. Stankey did not work that way, he now made clear. Instead, he liked to keep meetings short, 30 minutes at most because of the “discipline it drives for indi­viduals to pre-mediate their points and get to the crux of the issue.” In other words: Please skip the personal talk.

Texts would not be a good way to get in touch with him. “I try to seg­ment text messages to my personal life,” he explained. “Use it sparingly when you really need my attention on something short fused.” Other written com­munications would be difficult too. “I am not a prolific e-mailer . . . go fig­ure,” he said. As the memo circulated among company executives, it was met with grumbles. It struck some as oddly condescending, imperious, and impersonal. Trying to get to know Stankey in a professional setting was like trying to free climb Yosemite’s El Capitan. There was nothing easy to latch on to.

Stankey, it seemed, was not the only AT&T executive who preferred to avoid meetings. During AT&T’s courtship of the company and afterward, Randall Stephenson, the company’s chief executive, failed to invite Plepler to lunch, dinner, or coffee. HBO’s convivial leader told several friends that the snub surprised and hurt him.

There were other sources of growing tension. Plepler and his closest associates were beginning to suspect that for a group of newly empowered cultural gatekeepers, the AT&T folks were nothing more than a bunch of Philistines. “They didn’t regard television as art,” says one former HBO ex­ecutive.

The misgivings were mutual. According to a person close to Stankey, the towering Texan thought that many of the executives he inherited in New York and Los Angeles had been managing the company on autopilot for years. Due to perversely engineered financial incentives and perks, they’d been maintaining the status quo in order to pump up their bonuses and pad their gluttonous expense accounts off the backs of shareholders, while shirking the gnarly task of reinvention that needed to get done, pronto. Suggestions to put aside their bitter, inter­necine rivalries and to work together collaboratively with an eye on the stream­ing future, they resisted. On top of that, Stankey didn’t even know if he could trust them. He felt that anything he put in email could be leaked to the press and twisted into a maddening narrative about AT&T’s numbskul­lery. Caricature, not facts.

In the coming months, the “Chinese wall” that Plepler had hoped to keep between AT&T and HBO crumbled. Piece by piece, with Stankey’s bless­ing, AT&T was beginning to muck with the business functions under Plepler’s purview, ranging from distribution to data analysis to finance.

With their expanding control, AT&T executives set about installing their plan. If Time Warner had historically been a holding company for a bunch of independent entities that each had distinct cultures and identities, those days were over. AT&T decided Time Warner would get a name change and would now be known as WarnerMedia—one word. The balkanized divisions inside the company would now be required to work cooperatively toward a single goal. It was essentially the same task that had tempted and frustrated company executives all the way back to the early days of the Time Warner’s disastrous merger with AOL.

Often, Plepler would sit at his corner booth at the Midtown Manhattan restaurant, The Lambs Club, and en­gulf that day’s guest with a circular screed about how the AT&T guys—Stankey, in particular—just did not get it. “Richard was incensed,” says one lunch companion. “And he was just on a loop. On a loop!”

“You could easily see Richard was distracted,” says Quentin Schaffer, HBO’s longtime communications executive. “Clearly there was a different mindset uptown with John Stankey. And Richard was telling John where he disagreed with him, where he felt he was wrong: ‘John, that’s not going to work.’ And I could see Richard’s frustration that he wasn’t being listened to. It just kept building.”

Money was a frequent source of irritation. Among other disagreements, Plepler and Stankey did not see eye to eye on the company’s plans for a direct to consumer streaming service. Stankey was intent on building a Netflix-like competitor. Plepler told associates that he felt that AT&T had nowhere close to the resources or money needed for it. Instead, Plepler wanted AT&T to make improvements to HBO and let it broaden out its programming slate.

In October 2018, with such disputes still largely out of the public’s sight, AT&T announced that it would be launching a new giant streaming service. It would be bigger and broader than HBO Now and HBO GO, and de­signed to better take on the likes of Netflix, Hulu, Amazon Prime Video, and the forthcoming one from Disney. HBO Max was at least a year away. There was a lot to work out.

Stankey started assembling a team to lead the new service. A cast of AT&T functionaries, newly arrived at WarnerMedia, set about concocting a convoluted, tortuous multi­tiered pricing model for the new streaming service, which left many people inside and outside of the company scratching their heads. Months later, the pricing plan would have to be scrapped for something simpler.

From the sidelines, Plepler took it all in with growing dissatisfaction. By early 2019, Plepler de­cided it was time to bring his 27-year run at the network to a close.

On February 26, 2019, The Hollywood Reporter broke the news that War­nerMedia was considering Bob Greenblatt, the former Showtime and NBC executive, for a major new role. Two days later, Plepler announced his depar­ture.

“Essentially, he was disgusted by them and wanted out,” says Frank Rich, an executive producer of Succession and Veep, of Plepler and AT&T. “And those of us who were left were extremely worried about what would happen to the HBO culture under these guys.”

Those fears were mostly unwarranted. Over the next two years, with a mounting debt, AT&T mostly stayed out of HBO’s programming department’s way. The programming executive that Plepler installed, Casey Bloys, reliably kept turning out unexpected hits. HBO Max premiered in 2020, and after a prolonged stretch of hiccups, began to catch on, even if it was vastly behind Netflix in terms of subscribers.

Plepler would start a production company, and began supplying series to Apple TV+. And just over two years after Plepler left, Stankey began to make his exit, as well. AT&T spun off HBO’s parent company, combining it with Discovery Inc. By 2022, Stankey, as well as many of the executives he brought in, were goners.

What AT&T did for HBO, Stankey says, is take a “respected but static” content provider and transform it into a much larger global business. “HBO Max would not be where it is today if not for the AT&T and Time Warner merger,” Stankey says.

Producers in HBO’s stable of auteurs thought otherwise.

“They never got it, and they were gone,” Rich says of AT&T. “Thank God. But it could have gone on much longer. And then, who knows?”

From the book IT’S NOT TV: The Spectacular Rise, Revolution, and Future of HBO by Felix Gillette and John Koblin. Copyright © 2022. Published by Viking, an imprint of Penguin Publishing Group, a division of Penguin Random House, LLC.


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