While Warner Bros. Discovery CEO David Zaslav expressed a lot of excitement for the future of his newly merged company on Thursday during a company town hall with Oprah Winfrey at the Warner Bros. Burbank lot, he was vague on details for some immediate issues, including where $3 billion in planned cuts will come from.
When asked by Winfrey about the cuts, Zaslav said that his transition team is still in the process of sifting through assets from both sides of the new company to determine where such cuts could be made. The transition team is also in the process of integrating teams with the plan to create a company structure with “less layers,” as Zaslav put it.
“[The transition team] worked on what we’re going to do day one, what are we doing [the] first 30 days. It’s not perfect. We don’t know exactly how it’s going to work,” he said.
But Zaslav did share some broad ideas of where a good portion of the cuts will likely come from: streaming and television. Since WarnerMedia and Discovery Inc. each have a large portfolio of TV networks and their own streaming services, the merger of the companies will likely lead to cost-cutting measures via consolidation.
“We have 20 channels, Warner has 20 channels as [Warner Discovery U.S. networks chairman] Kathleen Finch runs that whole business. How do we put that together?” Zaslav said. “You have an ad sales team, we have an ad sales team, there’s a lot of one over one.”
Zaslav also said that he expects that a great deal of the cuts will come from “investment avoidance.” As Warner Bros. Discovery is expected to merge its streaming platforms — which include HBO Max, Discovery+ and CNN+ — into a single platform, that will free the company from increase advertising costs from promoting multiple services and also reduce the number of additional engineers the company will have to hire as the platforms are merged.
“For instance, we were going to spend $800 million promoting Discovery+, Warner was going to spend $800 million to a billion dollars promoting HBO Max. If we have one platform, we just don’t promote twice,” he said. “We had in our plan to hire a lot more engineers. Now when we come together, we have thousands of engineers, another platform who has thousands of engineers, so we don’t have to hire many more thousands of engineers”
But when asked by Winfrey when employees will know more about how this restructuring and cost-cutting will shape up, Zaslav asked workers to “be patient.”
“It’s going to take us a little bit of time and we’re going to try and be as transparent and honest and direct with you as possible. We’ve been a company that’s grown by acquisition,” he said.
