In December 2018, John Stankey sat down with HBO CEO Richard Plepler and his leadership team.

Stankey, the AT&T veteran running WarnerMedia at the time, was meeting with division heads to hear ideas on how to combat the threat from Netflix and the secular decline of cable television. This was the first time Stankey had heard from Plepler’s full team about their plan.

HBO was the crown jewel of Time Warner, which AT&T had recently acquired for $ 100 billion with debt. It took two years and a legal battle with the Trump administration to close the deal. It was the biggest media acquisition since the last time Time Warner was acquired in 2000, when America Online paid $ 162 billion. All that effort and money was a bit confounding to people. Why did a telephone company need to own a premium content business?

Stankey was the driving force behind the acquisition, and the clear favorite to take over as the next CEO of AT&T. Its success or failure would hinge on HBO, which already had more than 30 million subscribers and a sterling reputation in Hollywood and with consumers.

According to five people familiar with the meeting, Plepler laid out a simple path forward:

First, give HBO more money to spend on content.

Second, augment the Cinemax premium TV channel with more family-friendly original, library, and licensed children’s programming.

Third, sell HBO and Cinemax together for a couple dollars more than HBO — around $ 17 per month.

Fourth, hammer out a deal with Comcast, the largest U.S. cable company, allowing the broadband distributor to sell HBO Go directly to broadband-only customers.

Finally, and most importantly, don’t blow HBO up.

Plepler’s team estimated this plan would guarantee $ 7.5 billion in annual revenue plus future upside depending on the success of the new content.

Stankey heard them out. Then, he ignored their advice. Stankey had bigger ambitions for streaming video. Less than three months later, Plepler announced he was leaving WarnerMedia.

Instead, Stankey decided to use HBO as the centerpiece for a new mission: Build a true Netflix competitor, dubbed HBO Max. When Stankey took over as AT&T’s CEO this year, he passed that goal to new WarnerMedia CEO Jason Kilar, who previously launched Hulu. HBO Max launched in May.

Along the way, Stankey has dismantled the old Time Warner, spurring dozens of executives from all parts of the company to depart. He is attempting to funnel all of the company’s resources from cable, film, and HBO into HBO Max, as he told CNBC last year.

Disney, Comcast’s NBCUniversal and ViacomCBS are all going through similar changes now to prepare for a world where subscription streaming services overtake cable as the world’s primary form of television consumption. Stankey — the MBA-buzzword, deep-voiced phone guy — was ahead of the trend.

Still, his vision has irritated some veteran WarnerMedia executives, who question Stankey’s knowledge of media. The execution of his mission, which Kilar has overseen since May, has so far been marred by strategic confusion and culture clashes, according to more than a dozen high-ranking WarnerMedia employees, about half of whom have left the company in the past six months.

For now, investors don’t like what they see. AT&T is trading near a 10-year low. Meanwhile Verizon, AT&T’s closest competitor, is trading near an all-time high. The most glaring difference between the two companies? Verizon didn’t spend $ 170 billion buying Time Warner and DirecTV in the past five years.

This is the story of the transition from Time Warner to WarnerMedia, and the bumps that have happened along the way.

Alhough Stankey was new to media, he suffered the same disease as every other media executive: Netflix envy.

He thought Plepler was aiming too low. Plepler’s plan to generate $ 7.5 billion in annual revenue was 12% more than HBO’s eventual 2019 revenue. But it was a far cry from the $ 20 billion Netflix generated.

Stankey told Plepler he wanted a direct-to-consumer solution that could get to at least 60 million subscribers in five years, according to people familiar with the matter. HBO subscriptions had fallen from about 37.5 million in 2017 to 34.5 million in 2019. Over the same time, Netflix global subscriptions jumped 50%, from 111 million to 167 million.

If Stankey could convince investors that HBO Max would mirror Netflix’s growth trajectory, he might be able to capture a higher trading multiple for AT&T. This is the holy grail for media companies this decade — convincing Wall Street that streaming growth will make up for the decline of legacy businesses like cable TV and movie theater viewing. It’s also a strategy supported by AT&T’s most notable investor, activist hedge fund Elliott Management, which last year bet $ 3.2 billion that divesting non-core assets and focusing on streaming could lead to a surge in AT&T shares.

Stankey thought Plepler was attached to a fading distribution model — a wholesale approach where companies like Comcast and Amazon could sell HBO programming along with other linear networks or streaming services. Stankey viewed these companies as competitors more than partners. The battle would be keeping viewers in the AT&T ecosystem instead of Apple‘s or Amazon’s or Comcast’s.

This difference in approach showed up last month, when WarnerMedia struck a deal to put HBO Max on Amazon Fire TV. As a condition of that agreement, HBO is pulling its content off Amazon’s Channels interface next year, people familiar with the matter told CNBC. Several WarnerMedia executives who worked on the deal blamed Plepler for previously giving Amazon too much control over HBO programming, making the new Fire TV agreement much harder to complete.

Stankey initially wanted to keep Plepler at HBO, but the relationship started to fray around the end of 2018, said people familiar with the matter. Stankey set up an L.A. meeting with Casey Bloys, then president of HBO programming, without inviting or notifying Plepler. Plepler felt disrespected and told Stankey as much. Stankey saw Plepler as stoking an unnecessary turf war.

Around the same time, Stankey held a meeting with senior executives at the Time Warner Center boardroom in New York.

An outside consultant, Peter Cairo, who had spent the last few months interviewing 65 WarnerMedia executives, presented a number of problems with Time Warner’s siloed approach. Many of the senior leaders in attendance thought the presentation was doctored to support Stankey’s view that the company’s leadership was standing in the way of progress. Cairo, who had a history of working with Time Warner’s leadership team, told the group HBO was particularly resistant to working with other parts of the company.

Several veteran executives, including Bernadette Aulestia, head of HBO’s global distribution and Donna Speciale, president of WarnerMedia’s ad sales, spoke up to defend Time Warner’s history of success while questioning the way AT&T was handling staff morale.

The meeting ended tersely with Stankey cutting off dialogue early, three of the people said.

When the presentation ended, Plepler held a private meeting with Stankey. Soon after, Plepler revealed to a small group of people he was leaving HBO. He made his departure public in Feb. 2019.

Both Plepler and Stankey declined to comment for this story. A WarnerMedia spokesperson added, “As CEO of WarnerMedia and now CEO of AT&T, John Stankey has made it a habit to visit with talented employees throughout the company. That’s what good leaders do and is a common practice at well-run companies.”

HBO Max launched in May at a cost of $ 14.99 a month — the same as HBO — and an ambitious tagline: “Where HBO meets so much more.” It combines 31 new originals with library programming, including DC Comics content, from cable networks like CNN, TNT, Adult Swim, and the Warner Bros. studio. Stankey also licensed popular TV series including “South Park,” “The West Wing” and “The Bachelor.”

AT&T’s grand plan is to pair HBO Max with its wireless service — AT&T customers with premium plans already get HBO Max for free today. Wireless service has become a commodity in most markets, with AT&T, Verizon and T-Mobile all offering similar speeds and pricing plans. HBO Max is meant to help AT&T stand out from the pack and reduce churn while giving the wireless company viewership data for marketing and targeted advertising.

Since taking over, Kilar has accelerated Stankey’s burn-it-down strategy to boost HBO Max. As part of the restructuring, WarnerMedia has conducted several rounds of layoffs, including more than 1,000 employees in November. Kilar has even dismissed employees Stankey brought in, including Bob Greenblatt, who took over as chairman of WarnerMedia entertainment in March 2019.

He ended Conan O’Brien’s late night show on TBS and moved it over to HBO Max exclusively. He’s making the blockbuster Warner Bros. film “Wonder Woman 1984” available on HBO Max the same day it hits theaters on Dec. 25. This week, he announced every Warner Bros. movie slated for release in 2021, including “Dune,” “Matrix 4,” Lin-Manuel Miranda’s “In the Heights,” and “The Sopranos” prequel “The Many Saints of Newark,” will launch on HBO Max at the same time they’re released in theaters.

In an interview, Kilar told CNBC that killing the decades-old theatrical window, where movies got exclusive runs in theaters before coming to home video platforms, would make customers happy, even if it hurt the movie theater industry.

“The best way to find success in business, and certainly with the Internet, is to start with the customer,” Kilar said. “If we start our days and end our days focused on the customer, we’re going to lead the industry.”

Almost all of the executives who spoke to CNBC — including several still at WarnerMedia — felt the HBO Max experiment isn’t going particularly well so far. Only 8.6 million people have signed up to activate the service since it launched in May. Compare this to Disney, which has signed up 73.7 million people for Disney+ in less than a year.

“Jason’s belief is — wrongly — if any piece of content available anywhere other than HBO Max, it cheapens HBO Max,” said one recently departed executive. “Jason is forgoing billions in revenue by turning his back on licensing to preserve content for HBO.”

By pricing HBO Max the same as HBO, Stankey seemed to assume HBO users would simply switch to HBO Max over time. But the transition has been slow, as pay TV and streaming distributors — once HBO’s needed partners — have little incentive to market HBO Max to the millions of people who already get HBO.

“The risk here is that they end up pouring all of their Warner Bros. Studios content into HBO Max only for it to continue to be a premium service that serves only the top third of households,” said MoffettNathanson analyst Craig Moffett. “There’s a real risk that 1+1+1=1 here, and that all that will be left of Warner Media when they are finished is an HBO division that is more or less the same size as it was when they started.”

One problem is HBO Max has no tent-pole original series to jumpstart subscribers, like Disney+ has with “The Mandalorian.” That’s partly because, after the delay from the battle with the U.S. government, Stankey wanted to get the service out fast, according to people familiar with the matter. The coronavirus pandemic lockdowns in 2020 also delayed the creation and filming of new material.

The rushed launch has also affected distribution. WarnerMedia held out on a streaming distribution deal with Amazon for months to get friendlier terms and still hasn’t reached a deal with Roku. Kilar’s decision to release the 2021 Warner Bros. slate of movies on HBO Max concurrently with theater distribution could put more pressure on Roku to reach a deal. (Spokespeople at WarnerMedia and Roku declined to comment.)

Then there’s the confusing branding around HBO Max, which initially joined a plethora of similarly named services, including HBO, HBO Go, and HBO Now. Although WarnerMedia finally got around to retiring HBO Go and changing HBO Now to simply ‘HBO’ in June, several employees in charge of marketing and branding acknowledged the changes should have come much sooner, before HBO Max ever launched.

Kilar may also roll out separate streaming products, such as a CNN-related product and a free entertainment service featuring content from TNT and TBS, The Information reported.

There’s even been talk internally of changing the name of HBO Max — either internationally only or globally — once it rolls out worldwide in 2021, according to three people familiar with the matter. Executives have batted around several names with “Warner” as the title brand, rather than “HBO” — which makes even more sense if the service builds brand equity around having films the day they hit theaters. A WarnerMedia spokesperson said that a name change isn’t being actively considered at this time.

Elliott, which sold $ 150 million in AT&T shares at a loss last month, has pushed Stankey to divest assets. Still, CNBC has learned AT&T recently passed on a couple deals that could have brought in billions of dollars for the debt-laden company.

Just as Kilar was taking over WarnerMedia in May, DraftKings floated the idea of acquiring Bleacher Report from AT&T. The Bleacher Report executive team was privately hoping Stankey and the board would approve a deal, because it was clear AT&T’s focus would be on HBO Max, according to people familiar with the matter. But AT&T never seriously considered the sale, these people say. A DraftKings spokesman declined to comment. Since then, a number of high ranking Bleacher Report executives have left WarnerMedia, including CEO Howard Mittman.

Kilar also decided to keep Warner Brothers Interactive Entertainment, the company’s video gaming unit, after AT&T fielded bidders earlier this year.

“Any chart about gaming usage is up and to the right,” said Kilar. “It’s one of the most impressive trends in U.S. consumer behavior in the last 20 years. When we take a look at the next 5, 10 or 15 years with WarnerMedia, I’m very excited with the role gaming will play in our future.”

Most of the WarnerMedia executives CNBC spoke with for this story agreed that Stankey and Kilar’s bolder strategy makes more sense than Plepler’s more conservative alternative.

But many of the same executives, who still own a lot of AT&T stock, are scared that Time Warner’s path will mirror DirecTV’s.

In the years after acquiring DirecTV, Stankey eliminated most of the company’s top leaders, changed the satellite TV strategy to digital-first, and ended marketing campaigns touting the advantages of legacy technology.

The results have not been good.

AT&T ended the third quarter with about 17 million legacy TV subscribers (both DirecTV and U-Verse), down more than 16% from a year earlier. While all pay-TV distributors have lost customers in recent years, AT&T has lost the most — about 8 million video subscribers since early 2017. For comparison, Comcast has lost about 3 million residential video customers over the same period, dropping from 22.5 million to 19.2 million.

The digital product has been a non-starter. Last quarter, the company reported an anemic 683,000 customers for AT&T Now — the new name for DirecTV Now. That’s a drop of 40% from last year.

AT&T is currently in late-stage sale talks with private equity firms to sell a minority stake in the company’s pay-TV distribution business for a valuation that could be less than $ 15 billion, people familiar with the matter told CNBC.

Some of this decline may be a strategic choice. Stankey has purposefully steered AT&T’s business away from DirecTV, realizing that selling a bundle of linear channels — even digitally — isn’t the future of television. It’s possible DirecTV will serve as template of what not to do, even though Stankey has refused to call the DirecTV deal a mistake.

Even if Stankey can learn from the strategic errors AT&T with DirecTV, many former executives feel the damage to HBO’s internal culture is irreparable.

HBO has churned out critically acclaimed material for nearly two decades. Series like “The Sopranos,” “Sex and the City,” and “Game of Thrones” are credited with sparking a new golden age of television and supplanting movies as the most prestigious form of video storytelling.

This run of success has convinced many of the world’s most popular and glorified creators to work at HBO.

“Culture eats strategy for breakfast,” Plepler would frequently say to co-workers, quoting legendary management consultant Peter Drucker, according to people familiar with the matter.

Some employees fear Stankey and Kilar don’t appreciate how long it took to build those relationships. Several noted that Kilar and his deputy Andy Forssell have technology backgrounds that don’t always mix with the established creative culture.

Kilar said any employees harboring that concern shouldn’t be worried.

“I don’t define culture,” Kilar said. “You’re talking about a culture that ultimately goes back 97 years.” (Warner Bros. was founded in 1923.) “That’s not going to change because a few individuals are no longer present. Culture is the decisions we make when no one else is looking. If you think that’s going away, you’re not giving enough credit to culture.”

Kilar has retained some key HBO executives from the past two decades, including Bloys, who is now in charge of HBO Max content. Meredith Gertler, a 16-year HBO veteran, is executive vice president of content strategy. Amy Gravitt, who joined HBO in 2004, heads up comedy programming. Nina Rosenstein remains an executive vice president of programming after more than two decades with the company.

But former executives point to Stankey’s push to add advertising to HBO Max, slated for the second quarter of 2021, as potentially ruinous, according to people familiar with the plans. Would brands have been comfortable associating with “Game of Thrones” beheadings or rape scenes in “The Sopranos”? HBO never wanted to find out and risk having to compromise its content to keep advertisers happy.

“If HBO stood for anything, it was making a product for the customer, not the advertiser,” said one former HBO executive. “It’s not as though John is unpleasant. He doesn’t throw stuff. He just knows much less about television than he thinks and won’t be debated.”

Both present and past employees are optimistic that Bloys and his team can keep churning out original programming hits for HBO Max. Bloys is moving beyond the classic HBO tropes and trying to turn series that revolve around DC Comics characters or reboots like “Gossip Girl” into hits.

Still, many of those people predict AT&T will eventually sell off WarnerMedia, either in pieces or together, because legacy media assets will continue to weigh on AT&T’s stock rather than help it. Several said AT&T’s board will ultimately balk at giving Kilar the money he needs to compete with Netflix, Amazon and Disney.

The day after AT&T announced its deal for Time Warner in 2016, then-CEO Randall Stephenson appeared on CNBC to explain the deal’s logic.

“Why put the two companies together?” Stephenson said. “The world of distribution and content is converging, and we need to move fast, and if we want to do something truly unique, begin to curate content differently, begin to format content different for these mobile environments — this is all about mobility. Think DirecTV Now, the new product we’re bringing to market. What can you do with Time Warner content really fast and very uniquely for our customers? Can you begin to integrate social into that content? Can you give the capability to…I’m watching content, I want to clip it, I want to send it via social media to my friends. Can we iterate on that quickly, and can we give a unique experience to our customers?”

Whatever Stephenson was talking about in that answer, it hasn’t happened. There’s a sense — even among top executives still at the company — that AT&T’s WarnerMedia transformation is about making lemonade from assets in danger of becoming lemons.

But no one forced AT&T to buy Time Warner in the first place. The same can be said for DirecTV. Stephenson and Stankey made those decisions.

It will take at least a year or two more to judge HBO Max as a success or failure. In that time, WarnerMedia could develop a culture and a product that breed loyal employees and make the gripes of the old-timers seem petty and irrelevant.

To borrow a line from “The Sopranos,” “‘Remember when’ is the lowest form of conversation.”

Then again, it’s concerning to hear the same anxieties from so many WarnerMedia executives. To use a different “Sopranos” line, “One thing you can never say is that you haven’t been told.”