Market Overview

AT&T Acquires Full Ownership of Otter Media

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AT&T*
has acquired The Chernin Group's controlling interest in Otter
Media
, the joint venture between the two companies. Otter Media, a
leading subscription, advertising and content company, comprises
wholly-owned subsidiaries Ellation, an online subscription video service
provider, with offerings under the Crunchyroll and VRV brands, as well
as a full-service digital media company, Fullscreen, and its Rooster
Teeth brand. Otter also has ownership stakes in global content studio
Gunpowder & Sky, as well as Hello Sunshine, a media company founded by
Reese Witherspoon.

Otter Media will be a part of AT&T's WarnerMedia unit and Tony
Goncalves, who was appointed Otter CEO earlier this year, will continue
to run the company, reporting to WarnerMedia CEO, John Stankey.

"We are thrilled to incorporate the Otter Media brands and talent into
WarnerMedia," said John Stankey, WarnerMedia CEO. "Working with Tony, we
look to harness Otter's expertise in feeding the passion of online
audiences to augment our portfolio of digital assets and help us further
engage, connect and entertain consumers around the globe."

AT&T and The Chernin Group founded Otter Media in 2014 to invest and
develop platforms and properties that capitalized on the growth of
direct-to-consumer subscription and advertising models, as well as the
rise of new digital media brands.

In the four years since Otter Media's founding, interest in consuming
video online and via mobile devices has only accelerated. In that time,
the company has established a global audience of more than 93 million
unique monthly consumers and is on pace to deliver over 75 billion video
views this year. Additionally, the company is one of the top-ten
subscription video on demand (SVOD) providers with more than 2 million
paying SVOD subscribers.

"From the outset, Randall
Stephenson
and John Stankey championed the Otter strategy and
vision, and AT&T has been an ideal partner in building the business —
smart, creative and supportive," said Peter Chernin, CEO, The Chernin
Group. "With AT&T's direct-to-consumer relationships, vast data and
varied content, I believe they can accelerate Otter's growth. The
combination with WarnerMedia will create a new-era media company,
serving customers with every type of content delivered through every
possible distribution channel."

"The Chernin Group's support and expertise has helped us expand Otter's
capabilities and refine our strategy over the past several years, and
today's news is a testament to our team's dedication to super-serving
passionate audiences across multiple platforms," said Tony Goncalves,
Otter Media CEO. "Otter's digital-native talent pool understands that
today's viewers want their entertainment mobile, social and
community-centric. We plan to harness Otter's talent and scale to engage
and entertain fans around the world on their own terms. And we will
continue to be agile and nimble — a hallmark of Otter Media's culture —
so we can deliver the digital, social-first content that our audiences
want."

"Otter is delivering on our mission to build a leading portfolio of
direct-to-consumer media brands that have passionate fans and a
multi-pronged business model," said Jesse Jacobs, President, The Chernin
Group. "With AT&T's portfolio in media, distribution and content,
combined with Tony's leadership, we believe full ownership by AT&T will
take these businesses to the next level."

The Otter Media companies have built large networks of talented creators
and influencers and have deep libraries of video content. The Otter
Media portfolio includes Ellation, a transformative entertainment
company and home of industry-leading platforms Crunchyroll
and
VRV
. Crunchyroll is a SVOD service that gives millions of fans
access to a vast library of anime content. VRV aggregates and
distributes content from multiple over-the-top content providers,
including Crunchyroll and Rooster Teeth.

Another key part of the Otter Media family, Fullscreen,
is a digital media company that empowers talent and brands to build and
monetize highly engaged, social-first audiences through best-in-class
strategy, creative services and technology. Fullscreen began as a
network of creators, social influencers and YouTube stars that is now
4,500 strong. Since its inception, it has diversified to include branded
content, traditional advertising and social media marketing.

Rooster Teeth serves up original shorts, series, comedies and animation
for a diverse gaming audience through an owned and operated SVOD service
and website, as well as by licensing content to third parties.

AT&T's WarnerMedia unit was created after the close of the Time Warner
acquisition in June 2018. The terms of the deal were not disclosed, but
it did not have a material effect on AT&T's first-half 2018 results when
the majority of the deal was funded. This acquisition does not change
the company's plan to reduce its net-debt-to-adjusted-EBITDA ratio to
the 2.5x range by the end of 2019 and to its historical range by the end
of 2022.

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 might 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 and revise statements contained in this news
release based on new information or otherwise.

*About AT&T

AT&T Inc. (NYSE:T) is a diversified, global leader in
telecommunications, media and entertainment, and technology. It executes
in the market under four operating units. WarnerMedia's HBO, Turner and
Warner Bros. divisions are world leaders in creating premium content,
operate the world's largest TV and film studio, and own a world-class
library of entertainment. AT&T Communications provides more than 100
million U.S. consumers with entertainment and communications experiences
across TV, mobile and broadband services. Plus, it serves more than 3
million business customers with high-speed, highly secure connectivity
and smart solutions. AT&T Latin America provides pay-TV services across
11 countries and territories in Latin America and the Caribbean, and is
the fastest growing wireless provider in Mexico, serving consumers and
businesses. AT&T ad and analytics provides marketers with innovative,
targeted, data-driven advertising solutions around premium video content.

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.
Additional information is available at about.att.com.
© 2018 AT&T Intellectual Property. All rights reserved. AT&T, the Globe
logo and other marks are trademarks and service marks of AT&T
Intellectual Property and/or AT&T affiliated companies. All other marks
contained herein are the property of their respective owners.

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