Discovery said it has completed its $43 billion acquisition of WarnerMedia, which was spun off from AT&T.
The deal creates Warner Bros. Discovery, a giant media company with movie studios, cable TV networks, news and sports operations, and a growing presence in the TV streaming wars.
AT&T, abandoning its efforts to create a media company to sell more mobile phones, created DirecTV last year.
The company will be led by David Zaslav, who was Discovery’s CEO and was already one of America’s highest-paid executives. Zaslav’s total compensation for 2021 was $246 million.
Since AT&T and Discovery announced plans for the deal, Zaslav has bought a house on the West Coast to hang out with Hollywood types who were never comfortable with AT&T executives.
Thusday, Discovery announced the management team who will lead the merged company, with Zaslav filling most of the top positions with executives who have worked with him for years. Most executives brought to WarnerMedia staff by AT&T leavedirected by Jason Kilar, CEO of WarnerMedia, who served just under two years.
When AT&T took over Time Warner in 2018, most senior Time Warner executives left or were replaced.
On the entertainment side, Casey Bloys continues as Chief Content Officer of HBO and HBO Max; Channing Dungey remains chairman of Warner Bros. Television Group; and Toby Emmerich remains chairman of the Warner Bros. group. Pictures. They all report directly to Zaslav with the departure of Ann Sarnoff, who was CEO of WarnerMedia’s studio and network group.
Kathleen Finch, who was Head of Programming at Discovery’s Lifestyle Networks, will also take on a larger role as Chief Content Officer, US Networks Group. Between Discovery and Turner, this group has 40 American networks.
Reporting to Finch are Nancy Daniels, Content Director of Discovery Factual Networks; Brett Weitz, managing director of TBS, TNT and truTV; and Tom Ascheim, chairman of Warner Bros. Global Kids, Young Adults and Classic.
As announced last month, the former Late Show with Stephen Colbert executive producer Chris Licht will lead CNN. replace Jeff Zucker, who was removed from his position from his post after a relationship with a longtime subordinate came to light.
Streaming, important to Warner Bros. Discovery, like other media companies, will be overseen by JB Perrette, who ran Discovery Streaming and International.
To oversee the cash, Discovery chief financial officer Gunnar Wiedenfels will serve as the combined company’s chief financial officer, with revenue generation led by Bruce Campbell. On Friday, Discovery said Jon Steinlauf, director of advertising sales for Discovery who worked at Turner earlier in his career, will be responsible for selling ads in the United States
WarnerMedia’s Gerhard Zeiler will serve as the new company’s international president.
The company said it was looking for a chief diversity officer, as well as a president of its sports business. Lenny Daniels, president of Turner Sports and Patrick Crumb, president of regional sports networks, will report to the newcomer.
Discovery promised Wall Street that it would find about $3 billion in cost cuts to help pay the debt the company would incur to pay AT&T $43 billion for WarnerMedia. This means that many of the people currently working in the company will not be in the near future.
During Discovery’s latest earnings call, Zaslav said Warner Bros. Discovery will compete with Disney and Netflix, but it won’t break the bank when it comes to spending. “Our goal is to compete with the major streaming services, not win the spending war,” he said.
How to bundle the new company’s streaming services, HBO Max, Discovery Plus and the recently launched CNN Plus, remains to be seen.
At an investment conference in March, Discovery CFO Wiedenfels said HBO Plus and Discovery Plus would be merged into one “explosive DTC product”.”, a grouping strategy that many had predicted.
“Right from the start, we are working on preparing the consolidation approach,” Wiedenfels said. “But the main focus will be on harmonizing the technology platforms, creating a very strong direct-to-consumer combined product and platform, and that will take some time.”
Wiedenfels said much of the cost savings would come from streamlining the two companies’ streaming technology stacks.
“We spend about $6 billion on technology and marketing between HBO Max and Discovery Plus,” Weidenfels said. “Obviously, once we successfully migrate these technology stacks in Q1, there will be tremendous opportunity to reduce costs.” ■