AT&T, along with many other telecoms umbrellas, is having a hard time in 2021. As of the end of 2020, the entertainment and telecom giant was saddled with $164 billion in outstanding debt from various ventures and subsidiaries. And as 5G wireless continues to grow in demand, the company wants to focus on that. The company has been spinning off assets to pay down a record high of $190B in debt, and it will continue to do so.
Rooster Teeth was part of Otter Media, before AT&T stepped in and rolled the brand into Warner Media in an $85 billion takeover of Time Warner Inc. in 2018. In that time, the company has weathered a fair amount of problems and drops in revenue; but it appears that their time with AT&T may be ending soon.
AT&T reportedly wants to sell Rooster Teeth, the American video production company that was the genesis of machinima popularity and YouTube success. The entertainment company has come a long way from Red Vs Blue, its most popular machinima based on the video game Halo. Since then, animation has become an even bigger part of the Austin giant’s plans, with shows like RWBY finding a core audience within anime fans.
AT&T and Rooster Teeth have both felt a similar crunch from the COVID-19 pandemic. According to Bloomberg, Rooster Teeth was struggling before the pandemic, falling to a low of $50 million in revenue in 2019. 2020 numbers are no doubt much worse, although we don’t have details on that. The media giant has expanded in the last 18 years to include merchandising, conventions and so much more. That has not been without issues though.
That same animation department that has been key to Rooster Teeth’s success saw a major paring back of staff in 2019, accounting for 13% of its entire workforce being fired. Following that, multiple scandals rocked the company. There were accusations of withering and endless crunch which resulted in executive departures. And the train of misery didn’t stop there. Adam Kovic and Ryan Haywood, two personalities for the companies brands, were caught in various scandals of a sexual nature and were fired.
It’s unclear how much AT&T is looking to sell Rooster Teeth for, but if negotiations do happen, we will be sure to let you know. It’s likely that the brand and most employees of the biggest brands will survive such a transition, although branding changes may intensify. Geoff Ramsey, Executive Creative Director of the RT Direct division, spoke during the recent 18th-anniversary celebration about refocusing the company. One of the directions they wanted to take the company in was to move the Rooster Teeth brand into a more umbrella role, allowing the various shows and channels to retain their own branding and style.