Warner Bros. Discovery CEO David Zaslav says the company’s new reporting structure, in which it will separate its linear business from streaming and studios divisions starting next quarter, will provide more “strategic clarity” to both Wall Street and Hollywood.
“We’re always looking at shareholder value, and we really see these as two very different businesses,” Zaslav told an investor conference hosted by Morgan Stanley on Tuesday. “This will give a chance for you all to see all the characteristics of growth and opportunity and challenge that we see. So that will help us get fair value.”
He added that the new structure will also provide an opportunity to more easily respond to changes in the marketplace.
“It’ll give us an opportunity at the right time if we make a determination to go on offense or defense in different ways, because we’re already structured that way,” Zaslav said. “We’ve made a lot of progress in finalizing that structure, so I’m excited about it.”
His comments and the restructuring of the business come as WBD’s linear division saw profit decline 13% to $1.92 billion and revenue tumble 5% to $4.77 billion in the fourth quarter of 2024, driven by continued pay TV subscriber declines and softness in the domestic linear advertising market.
On Tuesday, Zaslav said one way WBD is looking to defend its linear business is by making changes to the way it programs its 29 cable channels to create more shareholder and economic value, including looking at how much content it’s producing and bringing HBO content to TNT and TBS that it doesn’t plan on licensing to competitors.
“Our food team, our home team, our [Investigation Discovery] team, they’re like studios. So instead of looking at them as cable channels, we start to say, what is the productivity of each of their shows, and how does that work in terms of how good is that content around the world? How good is that content on streaming?” Zaslav said. “So we’re not going to be able to fight against this decline, but things like that, using more library, being very measured on what content we produce and how much we produce, which we can change and make variable, and producing more content that works also on our streaming service, I think, will be a real helper to us.”
According to Zaslav, the majority of its content spend is focused on non-sports content, with its commitment to sports at around 15%. He emphasized that WBD is “not going to pay more than we think we can afford or make money on.”
“If we saved a huge amount of money by not doing the NBA, it’s more money that we could spend on the quality content that we can make global, that we think can strategically help us,” he explained. “Our job is to make sure we have enough quality sports so that we’re creating real value for the distributors. And it turns out not doing the NBA is a great decision for us. We picked up College Football Playoffs, we picked up NASCAR in the summer, we have a great lineup globally, and we saved a huge amount of money.”
During the conference, Zaslav also addressed WBD’s forecast that it expects at least 150 million streaming subscribers by the end of 2026.
As of the end of 2024, Max is available in over 70 countries. The company recently struck a nonexclusive agreement to launch on Sky in the U.K. and Ireland, which will bring the streamer to approximately 10 million Sky subscribers by the second quarter of 2026. It also will launch in Germany and Italy in the first quarter of 2026.
“We look at those three markets, and we think, you know, that’s an incremental 10 [million] locked, but another 15 to 20 million subscribers just from that,” he said. “Then we have the traditional rollout. We’re rolling out in Australia this quarter, we’ll roll out in Turkey next quarter and so that extra 50% that we see internationally, we really have a growth business, and we have something that I think is really unique for consumers.”
Zaslav further said WBD would continue to focus on investing in content and the Max product.
“HBO right now has the most robust, strongest lineup over the next 24 months it’s ever had. We have ‘White Lotus’ and ‘The Pitt’ and we’re going to have ‘The Last of Us,’ ‘Gilded Age,’ ‘And Just Like That,’ ‘Euphoria,’ ‘True Detective,’” he noted. “We have more big tentpoles, so that, I think, also will help generate more growth for us, but we’ll figure out what else we need.”
Additionally, he addressed the efforts to improve profitability in the studios and gaming businesses. He stated that monetizing its library is a “big piece” of its studios business and has been “lumpy.”
“We didn’t have much that came up last year. This year, and for the next few years, we’ve got some big slugs coming up,” he shared. “So we know for a fact we’ll see a lot more value coming through our library and we can model that.”
Zaslav also touted upcoming titles including HBO’s “Lanterns,” which is in production; “Supergirl: Woman of Tomorrow,” which is currently filming; and “Clayface,” which is going into production soon. He said the company has a six-to-seven-year plan on animation, including “Cat in the Hat” in early 2026, “The Places We Go” and four or five other movies being worked on.
He added that the gaming business, which took $350 million in write-offs and is expected to turn a profit in 2025, will focus on the “Harry Potter,” “Game of Thrones,” Mortal Kombat and DC franchises going forward.
