Sharon Waxman On the Business of Entertainment
The founder and editor of TheWrap’s take on life on the left coast, high culture, low culture and the business of entertainment and media. Waxman writes frequently on the inside doings of Hollywood, and is is also the author of two books, Rebels on the Back Lot and Loot
The shape of the new Warner Bros. Discovery conglomerate is emerging as Discovery is finally rolling up its sleeves to take charge ahead of an expected takeover in April, about two months sooner than originally planned.
On the priorities list? Streamlining systems and rebuilding company culture. “The company has been siloed for 30 years,” one insider with knowledge of the company told me. “No one has time for that anymore. The turf wars gotta go. One team. One mission.”
According to my intel, what that means is this: WarnerMedia CEO Jason Kilar, who was promoted just two years ago after John Stankey took over as CEO of current Warner parent AT&T, will definitively be leaving along with his team — to be replaced by Discovery CEO Davis Zaslav and his top executives. While this was previously presumed by many, insiders tell me that this is now expected as a done deal.
Also, the door is not open for the return of former CNN chief Jeff Zucker, who resigned last month, despite his years-long friendship with Zaslav. The very idea of his coming back for a top executive role is “silly,” according to my top source, after Zucker concealed a romantic relationship with CNN’s top communications and marketing executive. More on this later.
The executive team at the top of combined Warner Bros. Discovery will be the team currently leading Zaslav’s cable networks: COO David Leavy, CFO Gunnar Wiedenfels, streaming chief JB Perrette and Chief People and Culture Officer Adria Alpert Romm, among others including top counsel Bruce Campbell.
That team will soon be based in Los Angeles — leading to redundancy for top executives currently at Warner, such as CFO Jennifer Biry (formerly of AT&T). This leaves the fate more than uncertain for HBO Max leader Andy Forssell, a close Kilar deputy, as well as chief communications and inclusion EVP Christy Haubegger and others. Expect significant layoffs in finance, administration and tech as the merged companies will not need two tech teams and platforms for a unified streaming effort.
What’s still undecided is the status of creative leadership, and here things gets interesting because it leaves some key executives on the bubble: Ann Sarnoff, Chair and CEO, WarnerMedia’s Studios and Networks Group; Channing Dungey, CEO of Warner Bros. Television; HBO leader Casey Bloys; and the interim triumvirate leading CNN post-Zucker, Ken Jaust, Amy Entelis and Michael Bass.
“For the next 60 days, it will be [about] getting into who will lead the new company,” this insider said.
My guess is that most of these executives will stay, though CNN leadership remains in transition. Former ABC and Netflix exec Dungey was a huge get for Warner television, and the division needs her. Sarnoff is well-liked and a relatively recent arrival. But one insider noted that it is hard to judge Sarnoff’s leadership skills since her tenure has come during the highly atypical COVID era. Bloys is more or less the golden boy for his recent programming successes at HBO, from “Hacks” to “Euphoria” to “Mare of Easttown.”
No similar changes are expected for the Discovery creative leadership teams.
The lack of a role for Kilar is not entirely a structural issue. Kilar’s energetic cheerleading around the streaming service HBO Max has been noted, as have the strong results that have driven the service to an impressive 74 million subscribers.
But Zaslav is not impressed by Kilar’s leadership style, according to a senior individual with knowledge of his thining. In particular, Kilar has come under scrutiny for his abrupt announcement in late 2020 that all Warner movies would debut on HBO Max in 2021, a move that led to collateral damage to key relationships around Hollywood because partners were not warned in advance. Veterans of the business saw it as a rookie move made without sufficient consideration of the ripple effect it would have on A-list actors, financial partners, agents and producers.
“That really hurt him with Hollywood – he did things that made no sense,” said one insider with knowledge of Zaslav’s thinking. Another insider agreed, saying that Zaslav was looking for a “fresh start” with Hollywood’s core power players in getting projects done, especially top talent agents and financial partners like Legendary, which co-financed 2020 Warner tentpoles “Dune” and “Godzilla vs. Kong” and was furious at being left out of the decision-making process.
Zaslav was also unimpressed that Kilar had a “way too distant” relationship with CNN in general and Zucker in particular, as one insider put it to me, since he only learned about the relationship with network EVP Allison Gollust as it emerged because of disclosures in the investigation into fired anchor Chris Cuomo. An individual close to Kilar confirmed that he had no previous knowledge of Zucker and Gollust’s relationship.
Zaslav’s impression of Kilar is that the young, tech-focused executive did not have personal relationships with the team at CNN and that this contributed to a lack of cultural cohesion overall, according to my senior insider.
That’s not to say Zucker comes out looking too rosy in Zaslav’s view. According to two Discovery insiders, the ousted CNN president put the network at unnecessary risk by refusing Chris Cuomo’s demand for a severance payout while he had a relationship with a subordinate (he could have chosen to move Gollust to report elsewhere, it has been pointed out) and also while WarnerMedia was under a microscope from federal regulators who needed to approve the merger.
Consequently, both morale at the news network and the brand itself have been damaged.
Culture is the byword of the day. Zaslav prides himself on having stable leadership over two decades in the case of many top executives, some stretching back to his time as the head of NBCUniversal’s cable services before joining Discovery as CEO in 2007. Leavy, for example, has risen to COO after many years as the top communications executive. Warner, by contrast, has been buffeted by a series of ownership changes over three decades, from independence as TimeWarner (1990-2001) to the AOL merger (2001-03) to the AOL un-merger (2003-18) to the acquisition by AT&T (2018-21) to the imminent merger with Discovery.
But this new transition is another case of the minnow swallowing the whale. Warner is the bigger company, and the more prestigious brand. And knives are already out for Zaslav’s old-fashioned embrace of moguldom and an Old Hollywood approach to the industry. He bought legendary producer Robert Evans’ Beverly Hills estate and is taking meetings at a bungalow at the Beverly Hills Hotel. He drives around town in a vintage convertible with the top down. One wag told me that when Zaslav was asked at an early Warner Bros. meeting what his favorite HBO shows are, he responded: “Entourage” — a niche series that has been off the air for more than a decade and is not exactly a model of diversity and inclusion.
My personal take is that it’s all a gamble. Warner had a very stable culture under Jeff Bewkes for a decade until 2018, but he failed to see the tech revolution coming – or if he did, he realized it too late to respond. Since then, the company has seen nonstop turnover and the exit of too many valuable executives which has made it hard to grasp who is leading the place.
My insider asked a key question about stability: “Can Discovery bring our DNA to the culture?”
We’ll see. And we’ll see if it’s the right DNA for one of Hollywood’s legacy studios.
