The Chernin Group and AT&T Create New Venture to Acquire, Invest in and Launch Online Video Businesses

DALLAS & LOS ANGELES–(BUSINESS WIRE)–April 22, 2014–

AT&T* and The Chernin Group, which manages and invests in media businesses around the world, today announced the formation of a venture to acquire, invest in and launch over-the-top (OTT) video services. The Chernin Group and AT&T have committed over $500 million in funding to the venture. Further financial terms of the transaction have not been disclosed.

This alliance positions AT&T and The Chernin Group to take advantage of the rapid growth of online video and OTT video services, with each party bringing significant and complementary strengths. The strategic goal of this initiative will be to invest in advertising and subscription VOD channels as well as streaming services.

“AT&T and The Chernin Group are combining our skill sets to address the growing consumer demand for accessing content how and when they want it,” said John Stankey, Chief Strategy Officer at AT&T. “Combining our expertise in network infrastructure, mobile, broadband and video with The Chernin Group’s management and expertise in content, distribution, and monetization models in online video creates the opportunity for us to develop a compelling offering in the OTT space.”

The Chernin Group brings assets as well as expertise to the venture, including contribution of its majority stake in Crunchyroll, a leading subscription video on demand service.

“A critical part of The Chernin Group’s strategy has been our significant focus on the online video industry, and joining forces with AT&T only further underscores our strategic commitment in this area as operators, investors and programmers,” said Peter Chernin, Chairman and CEO, The Chernin Group. “Consumers are increasingly viewing video content on their phones, tablets, computers, game consoles and connected TVs on mobile and broadband networks. AT&T’s massive reach on those platforms across mobile and broadband and their commitment to the online video space make them the perfect fit for this venture with us.”

AT&T’s network resources bring enhanced opportunities for this new content alliance to create compelling offerings for consumers. AT&T has invested more than $119 billion in the United States over the last six years in part to stay ahead of the exploding consumer demand for wireless and wireline broadband data consumption, with more than 50% of global Internet traffic driven by video. AT&T has over 110 million wireless subscribers, more than 16 million total broadband subscribers, is a leader in connected devices and continues to win awards for its wireless and wireline services. J.D. Power awarded AT&T the “Highest Ranked Customer Service Performance Among Full-Service Wireless Providers” and “Highest Satisfaction with the Purchase Experience among Full-Service Wireless Providers” in their 2014, Volume 1 studies.¹

*AT&T products and services are provided or offered by subsidiaries and affiliates of AT&T Inc. under the AT&T brand and not by AT&T Inc.

¹ AT&T received the highest numerical score among full service wireless providers in the proprietary J.D. Power 2013 (Vol. 2) and 2014 (Vol. 1) Wireless Customer Care Full Service and Full Service Wireless Purchase Experience Studies^SM. Study based on 7,195 (Customer Care) and 8,525 (Purchase Experience) consumer responses measuring 4 full service wireless providers and measures opinions of consumers who purchased a wireless product or service within last 6 months. Proprietary study results are based on experiences and perceptions of consumers surveyed July-December 2013. Your experiences may vary. Visit jdpower.com.

About AT&T

AT&T Inc. (NYSE:T) is a premier communications holding company and one of the most honored companies in the world. Its subsidiaries and affiliates – AT&T operating companies – are the providers of AT&T services in the United States and internationally. With a powerful array of network resources that includes the nation’s most reliable 4G LTE network, AT&T is a leading provider of wireless, Wi-Fi, high speed Internet, voice and cloud-based services. A leader in mobile Internet, AT&T also offers the best wireless coverage worldwide of any U.S. carrier, offering the most wireless phones that work in the most countries. It also offers advanced TV service with the AT&T U-verse^® brand. The company’s suite of IP-based business communications services is one of the most advanced in the world.

Reliability claim based on data transfer completion rates on nationwide 4G LTE networks. 4G LTE availability varies.

Additional information about AT&T Inc. and the products and services provided by AT&T subsidiaries and affiliates is available at http://about.att.com or follow our news on Twitter at @ATT, on Facebook at http://www.facebook.com/att and YouTube at http://www.youtube.com/att.

About The Chernin Group

The Chernin Group, LLC (TCG) is a privately held, independent media holding company founded by Peter Chernin and based in Los Angeles, CA. TCG has built, managed, operated and invested in businesses in the media, entertainment and technology sectors around the world since 2010. TCG’s assets include Chernin Entertainment, which produces feature films and television programs; a majority stake in Hong Kong-based CA Media, which builds, manages and operates media, entertainment and technology businesses across Asia; and strategic investments in digital media companies including Fullscreen, Crunchyroll, Pandora, SoundCloud, Flipboard, Scopely, MiTú, Base79, Medium, and Tumblr (sold to Yahoo!). Providence Equity Partners LLC; Qatar Holding LLC; Victor Koo (founder and CEO of Youku) and Chengwei Capital; and other shareholders are strategic partners of and investors in TCG.

Peter Chernin sits on the Boards of American Express, Pandora and Twitter, and is a senior advisor to Providence Equity Partners.

^© 2014 AT&T Intellectual Property. All rights reserved. AT&T, the AT&T logo and all other marks contained herein are trademarks of AT&T Intellectual Property and/or AT&T affiliated companies. All other marks contained herein are the property of their respective owners.

Cautionary Language Concerning Forward-Looking Statements

Information set forth in this news release contains financial estimates and other forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. A discussion of factors that may affect future results is contained in AT&T’s filings with the Securities and Exchange Commission. AT&T disclaims any obligation to update or revise statements contained in this news release based on new information or otherwise.

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for AT&T
Roberta Thomson, 214-205-4102
roberta.thomson@att.com
or
for The Chernin Group
Melissa Zukerman, 323-658-1555
melissa@pcommgroup.com