6 Burning Questions After WarnerMedia’s Massive Restructure

One day after WarnerMedia underwent a seismic shift, we’re still catching our breath. On Friday, newly-minted CEO Jason Kilar shattered the traditional walls of the studio, television and premium cable divisions, rolled all content creation into one operation, while also creating a separate focus on HBO Max that places the nascent streamer at the forefront of its business strategy. Kilar’s moves came just one day after NBCUniversal made a similarly convention-shattering change. Two highly respected executives,  Bob Greenblatt and Kevin Reilly, were ousted. Andy Forssell, Ann Sarnoff and Casey Bloys were given more prominent roles, positioning them as Kilar’s new brain trust along with Jeff Zucker, who still heads up news and sports and was the only division left unaffected. With all of this disruption, TheWrap has some burning questions: What is the fate of individual networks? What’s in a TV network? We’re not sure anymore. WarnerMedia combined its studios and networks, meaning that people behind “Wonder Woman” and “Game of Thrones” are on the same floor. While that could allow While that could allow them to be more strategic about where to direct development — this also allows an easier pathway for development to shift between film and TV — it could dilute individual networks and turn them into promotional vehicles for HBO Max. Former AT&T CEO Randall Stephenson mused before his departure about the possibility of eliminating original programming from its basic cable networks and turning its focus fully on HBO and HBO Max. If all the content will eventually ends up on HBO Max anyway, does that turn networks like TNT and TBS into glorified content hubs? Is HBO as a premium brand a thing of the past? TheWrap has written before about the possibility of HBO getting subsumed by HBO Max, where it serves as a key provider to the streaming service rather than a standalone entity. Friday’s move appeared to take that a step further. Casey Bloys, who had been running HBO following legendary CEO Richard Plepler’s departure last year, was handed oversight of content creation across Turner networks and HBO Max. So putting Bloys in charge of Max content could assuage critics’ worries that HBO would dilute its prestige brand. At the same time, HBO is even more than before part of a larger ecosystem in the same sandbox as its basic cable siblings. Under Plepler, HBO was its own kingdom. Now it’s just another room in the WarnerMedia house of content. How does AT&T feel about the early HBO Max results? Reilly and Greenblatt were tasked with getting HBO Max off the ground. While Kilar explained the changes as not having anything to do with performance, the service didn’t get off to the same roaring start as other streaming newcomers. It amassed 4.1 million subscribers in its first month. Disney blasted out of the gate in its first nine months, revealing more than 60 million subscribers in its earnings call last week. HBO Max was beset by confusion even before it launched as it attempted to transition its current HBO subscribers into Max. Both cost the same price and the branding-soup became the subject of public mockery. Kilar has entrusted Andy Forrsell to supercharge the service’s global rollout. The two have a long relationship going back to their days atop Hulu. Forrseell’s expertise is in growing a subscriber-based business. His hire and their ouster may signal that AT&T is unhappy with the early results. Are WarnerMedia and NBCUniversal providing a blueprint for operating in streaming era? It’s not every day you see two major media companies wholly change how their business operates, but 2020 continues to be unlike any normal year. Just a day before Kilar’s changes, NBCUniversal transformed its television and streaming operation by combining the NBC broadcast network with its cable siblings, while separating content development from business operations. Both reorganizations were designed to consolidate development under one roof and put streaming front and center. WarnerMedia went a step further by merging film and TV content creation into one group. The other thing both restructuring have in common: They were both instituted by new chief executives not shy of throwing out the status quo. Shell’s reorganization Thursday was already his second this year, and there figures to be more downstream changes as the new division leaders fill out their teams. Kilar blew up WarnerMedia’s old structure just 90 days into his tenure. They stand in stark contrast to the other new CEO, Disney’s Bob Chapek, who has mostly kept to the status quo, with the exception of losing streaming boss Kevin Mayer to TikTok. Are we in for another wave of layoffs? The changes this week have already resulted in a few high-profile pink slips. Along with Greenblatt and Reilly, Paul Telegdy was removed as NBC Entertainment chairman following damaging accusations of creating a toxic work environment. The reason for Greenblatt and Reilly’s departure are much more benign. “You have to make the tough choice to decide who is going to be the leader in a certain area,” Kilar told TheWrap on Friday. “Obviously, I had to do that, and I did that with content in terms of Ann Sarnoff. These are not easy decisions, these are not performance-oriented decisions.” But further layoffs will happen as they continue to reform under the new structure, which Kilar acknowledged while declining to offer a notion of scale. “You’re not going to have two people doing the same thing,” Kilar said. Earlier this week, NBCU began layoffs of its own that only figure to continue. Speaking of Bob and Kevin… what happens to them? The reorganization made both longtime television executives free agents. Greenblatt’s old stomping grounds, NBC, is looking for an executive to run its entertainment programming unit, a role that sounds very similar to Greenblatt’s WarnerMedia role. However, Greenblatt was in charge at NBC Entertainment during much of Telegdy’s tenure running the alternative programming department, which dampens chances of a return. Reilly saw his star rise after he first took over Turner networks. A veteran of NBC, FX and Fox, Reilly in theory should have no shortage of suitors looking for a veteran programming executive. Anyone feel like starting a network?