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AT&T-Owned CNN to Resolve TVS Dispute With $76M Settlement

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In one of “largest monetary remedy” in the history of the National Labor Relations Board, AT&T Inc. T-owned news channel CNN has decided to settle its long-pending dispute with camera operators Team Video Services (“TVS”). The settlement, involving a backpay of $76 million, draws the curtains on a 16-year long contract dispute with TVS.

The bone of contention stemmed from the fact that CNN terminated the contracts of unionized camera operators in 2003, without taking into consideration the two unions that represented about 300 retrenched employees. Thereafter, CNN reportedly hired new non-union employees as replacement to perform the jobs of video technicians and other technical and support functions, sparking a trail of litigation with the National Association of Broadcast Employees and Technicians and Communications Workers of America (NABET-CWA). The NABET-CWA is a labor union representing employees in television, radio, film, and media production.

With the amicable settlement of the litigation process, AT&T is likely to focus more on the upcoming launch of the HBO Max streaming service this Spring. HBO Max will offer about 10,000 hours of premium content, leveraging an extensive collection of exclusive original programs and the most sought-after shows from WarnerMedia’s vast portfolio of beloved brands and libraries. These include the exclusive streaming rights for popular shows such as Friends, The Fresh Prince of Bel Air and Pretty Little Liars. In addition, it will showcase programming from Warner Bros., New Line, DC Entertainment, CNN, TNT, TBS, truTV, The CW, Turner Classic Movies, Cartoon Network, Adult Swim, Crunchyroll, Rooster Teeth and Looney Tunes.

With an unrivaled bouquet of premium and exclusive content for an impressive direct-to-consumer experience across the age group, HBO Max will likely equip AT&T to play catch-up with avant-garde media firms, like Netflix, Inc. NFLX and The Walt Disney Company (DIS - Free Report) , in order to secure a bigger pie of the streaming service market.

Notably, AT&T has been ramping up its streaming services with the launch of live TV channels DirecTV Now in 2016, and a cheaper live-TV service WatchTV in 2018. With modest successes in both these ventures and continued subscriber loss in its DirecTV satellite TV business as users tend to shift to Internet video services, AT&T intends to focus more on video-streaming content. With the launch of HBO Max, while continuing with HBO Now as a separate subscription-based streaming service, AT&T aims to bring stiff competition to its rivals within this space.

The stock has gained 26% in the past year compared with a rise of 10.6% for the industry.

AT&T presently carries a Zacks Rank #3 (Hold). A better-ranked stock in the industry worth considering for long-term investment is Gogo Inc. GOGO, sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Gogo delivered an average positive earnings surprise of 39.1% in the trailing four quarters, beating estimates on each occasion.

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