Early last summer, the Discovery Channel’s founder and former chairman, John Hendricks, settled in with his wife and daughter for a movie at his local Regal theater in Fort Lauderdale, Florida. They’d come to see Elvis, the grandiose musical biopic, but the most unexpected thrill came at the very beginning: There on the screen was the new Warner Bros. Discovery logo, with the vintage “WB” shield stylized like one of the King’s jeweled belt buckles, right alongside the Discovery name, as the King’s voice unspooled in a spectral remix of “Suspicious Minds.”
“We all looked at each other when that Discovery brand came up. It was like, wow,” Hendricks says of the company name he first jotted down as a young entrepreneur in 1984. Following the examples of Ted Turner and his Cable News Network (CNN) in Atlanta and Bill Rasmussen in Connecticut with his Entertainment and Sports Programming Network (ESPN), Hendricks was so convinced that there was a place on TV for documentaries and educational films he knew were out there that he initially funded what would become Discovery with cash advances on his credit cards.
When Hendricks stepped down in 2014 as chairman of the company he led for 32 years, Discovery Communications had grown into a massive success as home to the new genre of reality television: Deadliest Catch, MythBusters, Dirty Jobs, Naked and Afraid, the annual Shark Week bloc of man-eating programming. Its lucrative holdings grew to include a variety of other networks, from Animal Planet and TLC to the Oprah Winfrey Network. But what Hendricks witnessed at the movies that day represented something much larger: Discovery was conquering the media world.
Much of that expansion could be attributed to Hendricks’s handpicked successor as Discovery’s president and CEO. For most of his professional life, David Zaslav, 62, was regarded as a smart, media-savvy executive with many famous friends from television, film, and business, including Steven Spielberg, General Electric’s Jack Welch, and former Vanity Fair editor-in-chief Graydon Carter. The married father of three is a news junkie and, during his two decades at NBCUniversal prior to joining Discovery, helped launch the cable news networks CNBC and MSNBC. At Discovery, Zaslav engineered the company’s purchase of a majority interest in Scripps Networks Interactive for $14.6 billion in 2018, adding HGTV, Travel Channel, and Food Network to the company’s roster. “We grew from five to six billion dollars in revenue to close to ten billion dollars,” says Hendricks.“David spearheaded the bulk of that growth.”
Once installed as Discovery’s CEO, Zaslav began quietly hammering out a merger deal with WarnerMedia’s then-owner, AT&T, a nearly yearlong process that became official last April. It was in fact more of a takeover than a merger, allowing Zaslav to expand Discovery’s media properties to include blue-chip brands like HBO Max, CNN, and the 99-year-old Warner Bros. movie studio. Not so long ago, Discovery was dismissed by industry insiders as “trash TV”; now, it was swallowing a large swath of Hollywood. “A lot of people just didn’t focus on the global reach of Discovery,” says Hendricks, noting its many billions in licensing and advertising revenue, collected across more than 140 countries. “Most of us who’ve been close to Discovery knew it had that potential. But a lot of people in the marketplace were a bit surprised.”
When the merger finally closed on April 8, 2022, Discovery landed in Hollywood like an invading force; not even Jason Kilar, then CEO of WarnerMedia, knew about the merger until the news broke. Discovery had acquired the Warner properties from AT&T for $40.4 billion in cash and assumed nearly the same amount in debt. The merger instantly expanded Discovery’s reach in the accelerating streaming wars and included plans for a new service combining HBO Max and Discovery+ in 2023. By now, Zaslav’s pay package had vaulted to an astonishing $246 million, well above the already lofty $37.7 million he earned in 2020.
Once in control, Zaslav took aim at the crushing debt he’d inherited, and many of the cuts hit hard, with layoffs across the combined companies (much as he’d cut 25 percent of staff when he took over as CEO of Discovery). He announced the closing of the CNN+ streaming channel just weeks into its high-profile, $300 million launch, laying off more than 300 newly hired employees. The beloved Cartoon Network was gutted, and a plethora of existing content was removed from HBO Max, including almost 200 episodes of Sesame Street. To some observers, this was just the usual turmoil that follows any major media merger—such as Disney’s $71.3 billion takeover of 20th Century Fox in 2019. Only six years earlier, AT&T had purchased Time Warner for $85.4 billion—and that was after America Online merged with the latter in 2000 for a staggering $165 billion.
“Hollywood never learns from its past, and over and over again, you see people making the same mistakes,” says Stephen Galloway, former executive editor of the Hollywood Reporter and now dean of Chapman University’s Dodge College of Film & Media Arts. “The other thing that happens frequently is one business thinks it can apply its rules to another business. They’re used to regular profit-and-loss businesses, where you can predict revenue to a certain degree. [Hollywood] doesn’t work like that. It’s extremely unpredictable.”
Warner Bros. Discovery may be another case study of why massive media mergers are often so self-destructive. After the deal is done, first on the agenda is always slashing away at some of what made the properties worthwhile, just to service the debt incurred with the purchase. Zaslav has announced his intention to find $3 billion in cuts by the end of 2023 and is already far along, targeting duplication within the combined Warner Bros. and Discovery workforces of about 40,000.
Zaslav announced his intention to find $3 billion in budget cuts by the end of 2023. It’s not lost on Warner Bros. Discovery’s rank and file that in 2021 he received a $246 million pay package.
If the initial layoffs had employees on edge, what came next shook Hollywood’s creative community to its core: Zaslav decided to cancel the feature film Batgirl, a nearly completed, trouble-free production that had finished a seven-month shoot in Glasgow, Scotland and was gliding into postproduction for exclusive release on HBO Max. Cast and crew received no warning before the story landed in the New York Post on August 2; codirectors Bilall Fallah and Adil El Arbi were in Morocco for El Arbi’s wedding when they found out. The nearly completed animated feature Scoob! Holiday Haunt was also scuttled.
It turned out that Batgirl was sacrificed in part because of a “purchase accounting” maneuver that was briefly available now that the studio was under new ownership. That made for a quick and easy $70 million write-off, but the move alarmed filmmakers and other creatives about the intentions of the new regime. Brendan Fraser, who was cast as the villain Firefly, called the decision “disappointing” and told Variety, “So what did we learn from this? Work with trusted filmmakers.” Backstage at the Emmys, Michael Keaton, who would have reprised his Batman role in the film, was diplomatic as he cradled his Best Actor trophy: “I think it was a business decision. I’m going to assume it was a good one.”
Warner Bros. Discovery defended the move as a “strategic shift” away from original features for HBO Max and a re-emphasis on theatrical releases. CFO Gunnar Wiedenfels declared the machinations over canceled shows and disappearing content a media-generated controversy “blown out of proportion.” His insistence that the merged companies offered “one of the best platforms for anyone in the creative space” was a lot less convincing when content could be so blatantly discarded for the bottom line.
“The whole thing with the Batgirl movie shocked everyone—it was a huge slap,” says Galloway. “That said, deep down, everybody knows Zaslav would never have done it if he thought there was a way of recouping [the] money.”
Zaslav’s welcome at the various Warner Bros. properties is now tempered with outrage and suspicion. One insider at the company, who asked not to be identified, expressed genuine sympathy: “I feel like he’s ruined half of his friendships in the last six months. And I hear from other people about the toll that’s taking on him. I can’t help but think that the last great day of his career was the day that deal closed. Every day since has been a shit show.”
Zaslav used to be a reliable presence in the news media and on the New York society circuit. He and his wife, Pamela, frequently entertain at their East Hampton retreat, purchased from ad man Jerry Della Femina for $24.6 million, two years after dropping $25 million on Conan O’Brien’s duplex on Central Park West, according to Dirt. But now, in the year of his greatest triumph, Zaslav has gone quiet (he declined to be interviewed for this story). Last year, he participated in a single significant interview, a barely 17-minute chat on CNBC’s Squawk Box. In September, he was spotted on the red carpet with Harry Styles and Olivia Wilde at the New York premiere of Don’t Worry Darling, a comfortably profitable Warner Bros. release despite (or thanks to) some very public behind-the-scenes sniping between the cast and director.
As Zaslav arrives in Los Angeles, to take charge of the legacy movie studio now part of his media empire, he’s made requisite symbolic gestures, including personal meetings with retired studio chiefs from Paramount’s Sherry Lansing to Disney’s Robert A. Iger—that is, before Iger reassumed his CEO’s throne following the brutal dismissal of Bob Chapek, his handpicked successor, after a devastating billion-dollar quarterly loss spooked the Disney board late last year. There’s also Zaslav’s $16 million purchase of Woodland, the Beverly Hills estate of the late Paramount chief and Chinatown producer Robert Evans. It was not unlike David Geffen’s 1990 purchase of the eight-acre Jack Warner estate (now owned by Jeff Bezos) as a sign of his commitment to the tribe. “These are symbols of where the new court is,” says Galloway. In the case of Zaslav, a native New Yorker, “it said, ‘I’m not just taking over Hollywood. I’m staking my position geographically.’ ”
Zaslav’s apparently genuine love for movies can also be read in the company’s new slogan “The stuff that dreams are made of,” uttered by Humphrey Bogart in the 1941 Warner Bros. classic The Maltese Falcon, a more poetic take on what Zaslav frequently says out loud: “Content has always been our North Star.” It is telling that he wants Warner Bros. to reemphasize theatrical releases, and on that he may be ahead of the curve—as competitor Netflix again chose to walk away from potentially tens of millions in box office by giving the highly anticipated Knives Out sequel Glass Onion only a limited theatrical release in November.
Zaslav recognizes movie ticket dollars as real money, in contrast to the AT&T-backed Warner Bros. regime, which alienated major filmmaking talent (auteurs Christopher Nolan and Denis Villeneuve among them) by announcing at the height of the COVID-19 panic a plan to simultaneously debut feature films in theaters and on HBO Max. That included hotly anticipated films like Villeneuve’s Dune and The Matrix Resurrections. Nolan was quoted lamenting that he went from working for “the greatest movie studio” to feeding content to “the worst streaming service.” (Not for nothing was Zaslav recently spotted at lunch with Nolan and Spielberg.)
That said, Zaslav has no meaningful previous experience running a feature film company. Neither did freshly ousted Disney CEO Chapek, who rose first through the company’s home media and parks divisions before becoming Iger’s chosen heir. After Chapek spent almost 30 years at Disney, his firing was announced on a Sunday, with none of the usual pretenses allowed for a graceful departure—maybe management skills for running theme parks were not transferable to the studio’s core film and television operations after all.
With the industry facing a possible economic slowdown in 2023, a looming contract expiration with the Writers Guild of America that many have concluded will lead to a strike, the startling example of Netflix’s loss of 200,000 paid subscribers in the first quarter of last year and another 970,000 in the second, Zaslav’s leadership will be tested when he is still preoccupied with ongoing fallout from the merger. Puck Newsletter’s Matthew Belloni quoted a banker who declared that, in such a fraught environment, no newly christened media CEO, especially one with a compensation package as lavish as Zaslav’s, is safe: “Chapek is first, but all these guys will be out.”
Still, if the streaming audience has hit a ceiling, Zaslav has diversity of content to lean on. And next to the likely massive box office for new tentpoles like the sequel Aquaman and the Lost Kingdom, the possibility that Batgirl might attract some streaming subscribers was difficult to quantify in numbers recognizable to Wall Street. Zaslav has other ideas for how to fight the streaming wars, and spending $70 million on features for HBO Max made no sense to his bottom line.
What came next shook Hollywood’s creative community to its core: Zaslav canceled the nearly completed feature film Batgirl that was gliding into postproduction after a trouble-free shoot.
“It’s always possible to cut too much and damage that brand connection” with the audience, says Eric Johnson, faculty director at the UCLA Anderson School of Management’s Center for Entertainment, Media & Sports, and a 20-year veteran of Disney-owned ESPN. But with Warner Bros. Discovery’s combination of high-end HBO Max content, adventurous nonfiction Discovery+ programming, and all the assets of the former Turner Sports networks, “You’ve really created a moat around the castle,” Johnson points out. “They’re already one of the leading forces” in streaming.
Nothing in the media portfolio Zaslav oversees has drawn more scrutiny than his stewardship of CNN. (His daughter Ali is a well-liked producer at the network.) “News is critical,” he insisted in an interview with CNBC, citing his years at NBCUniversal. “I’ve been around news for more than half of my career.”
CNN is also a profound responsibility beyond its usual $1 billion in annual profits. Its place in Zaslav’s larger streaming plans is unknown, but he’s expressed a desire to have CNN accessible on personal devices around the world. “That’s differentiating versus a Netflix or a Disney, and it’s core to who I am,” he told Squawk Box. Observes a knowledgeable CNN staffer: “I think Zaslav’s heart is in the right place, but his wallet may be in a different place. He clearly feels he has to make changes that are troubling.”
The first shock came with Zaslav’s sudden shutdown of CNN+, and the loss of hundreds of jobs. A series of high-profile exits of on-air talent followed: White House correspondent John Harwood; legal analyst Jeffrey Toobin; and media reporter Brian Stelter, host of the network’s longest-running show, Reliable Sources, now canceled. The public outcry was swift, with calls on social media to #BoycottCNN. It was a bad look for Zaslav’s budding regime, as was the influence of billionaire John Malone, a major shareholder in Warner Bros. Discovery, and a past Trump supporter. In November 2021, Malone told CNBC: “I would like to see CNN evolve back to the kind of journalism that it started with, and actually have journalists, which would be unique and refreshing.” In the same interview, Malone praised Fox News.
Zaslav’s instrument of change at CNN is network chairman Chris Licht, who replaced Jeff Zucker, who resigned in 2018 after an internal investigation revealed he had not disclosed a consensual relationship with one of his lieutenants. It’s a big job for the former showrunner for Stephen Colbert’s Late Show on CBS. In his new role, Licht has been guiding multiple waves of layoffs and grappling with why “the most trusted name in news” came in last in the ratings among the three major cable news networks during last fall’s suspense-filled midterm elections. While Licht insists to staff that all decisions are his own, the uncertainty about where CNN is headed is a constant source of anxiety in the newsroom. “The conventional wisdom inside CNN is that Chris Licht is not making the decisions, that Chris Licht is really, really good at managing up,” says a CNN staffer, who asked not to be identified. “His entire focus is about his relationship with Zaslav. With the new regime, the complaint that you hear every day is that you don’t know what they want.”
Aside from Toobin, whose career derailed after he exposed himself during a Zoom meeting in 2020, there was no obvious rationale behind the highest-profile exits—except for their willingness to criticize Trump. Harwood’s was especially puzzling, considering his decades of experience across multiple White House administrations and his years of sharp, fair critiques of both sides of the partisan divide. During his final appearance on September 2 last year, Harwood’s commentary on President Biden’s warnings that “the Republican Party right now is led by a dishonest demagogue” and that democracy itself was under threat carried an extra punch when, later that afternoon, he tweeted that it was his final day at the network. CNN was accused of abruptly silencing a journalist for speaking the truth. Former CBS newsman Dan Rather tweeted: “What’s going on at CNN? It’s a serious question. There is a lot of speculation on directives and motives.” Former MSNBC host Keith Olbermann, who knew and disliked Licht from when they were both at the network, replied: “It’s a long story, but the new president is there to cut off the liberal heads.”
[Zaslav] ruined half his friendships in the last sixth months, and I hear about the toll that is taking.The last great day of his career was the day the deal closed. Every day since has been a shit show.
The anonymous CNN staffer says Harwood knew for two weeks that would be his final morning on the network; that CNN chose not to clarify the timing publicly strangely suggested that even if the personnel changes at CNN are not necessarily ideological, management doesn’t mind them appearing that way. The news business in the Trump era is complicated, and CNN is still a long way from attracting MAGA faithful to tune in for Anderson Cooper. (Zaslav has in the past been comfortable schmoozing at parties with Democratic leaders Nancy Pelosi and Chuck Schumer.) So far on HBO Max’s front page, CNN remains virtually invisible, with only Who’s Talking to Chris Wallace? prominently displayed. Meanwhile, the network announced it was cutting back on CNN’s original series and films for cost reasons, not politics, wounding a division that created such acclaimed (and profitable) content as Anthony Bourdain: Parts Unknown and the 2013 documentary Blackfish. Another round of layoffs in December pushed out CNN political pundit Chris Cillizza and Atlanta-based anchor Martin Savidge, who’d been with the network since 1996.
“If the goal is to make CNN this happy, friendly brand that everyone loves so they can be a tile on HBO Max, maybe that’s a great plan,” adds the CNN staffer. “I happen to think it’s impossible.”
When the news broke last March that Warner Bros. Discovery-owned DC Films would be cochaired by director James Gunn, who brings filmmaking chops to the executive offices and a genuine comfort level with DC characters, hard-core comics fans were relieved. Gunn, best known for the irreverent Guardians of the Galaxy and The Suicide Squad, will lead the next wave of DC feature films, TV and animation with producer Peter Safran (Aquaman, Shazam!). Following the Batgirl debacle, the appointments were casual evidence that Zaslav was acknowledging the outsized power of fans to drive the fates of the comics-derived tentpoles dominating the U.S. box office. That same constituency was behind the public pressure that led the AT&T regime to allow Zack Snyder to complete his four-hour director’s cut of Warner Bros.’s Justice League for HBO Max. “Our job is to protect the DC brand,” Zaslav said on an earnings call last year. “And that’s what we’re going to do.”
But that didn’t stop Zaslav from purging dozens of animated series from HBO Max. Creators saw years of work suddenly vanish. After five years on HBO, Summer Camp Island was canceled with an unaired sixth and final season completed. (It will now air in 2023 on Cartoon Network, the series’ original home.) On Twitter, creator Julia Pott vented: “We were a family of hardworking artists who wanted to make something beautiful, and HBO Max just pulled them all like we were nothing.” Adding to the resentment, many of these productions had been created under the trying conditions of peak COVID-19 protocols. Even The Day the Earth Blew Up, an animated feature from Warner Bros. Animation, starring the company’s iconic Looney Tunes characters, was left homeless after being cut as an HBO Max original. That and an animated Batman film coproduced by J. J. Abrams are now being shopped instead to outside networks—sending proprietary legacy characters into the world to generate income to pay down the merger’s debt. The Cartoon Network was hit with a tsunami of layoffs, cutting 125 jobs (a crippling 26 percent of its workforce), and the news that it was being merged with Warner Bros. Animation. While the Cartoon Network channel will remain, the merger marked the likely end of its iconic animation studio as a standalone, artist-driven operation with its own culture, which had created decades of innovative shows, from Johnny Bravo to the grown-up cartoons of Adult Swim. To Cartoon Network viewers, with an emotional attachment to its shows from childhood onward, one of the best-known brands in TV animation was being dismantled in all but name.
Eight years after stepping down as chairman of Discovery, Hendricks, 70, now runs Curiosity Stream, his new documentary subscription network, but remains an admirer of Zaslav as his protégé grapples with the demands and debt of a major conglomerate at a time of unprecedented uncertainty. Hendricks derides the chatter about an imminent media apocalypse as “irrational panic.”
Already, Zaslav has faced rumors that he was eyeing a sale of Warner Bros. Discovery, which he flatly denied (Iger vaguely dismissed similar rumors about selling Disney to Apple as “pure speculation”), particularly after Hollywood suffered its worst-ever non-pandemic Thanksgiving weekend at the box office last year. Zaslav is meanwhile consumed with making his gigantic new streaming service—combining sports and high-end drama, reality TV and international news, wild animals and superheroes—a profitable reality. He’s also shown a willingness to play hardball in negotiations as he eyes all that debt, even suggesting, “We don’t have to have the NBA” on his sports networks if the price is too high. If the fortunes of Warner Bros. Discovery don’t turn around fast enough, then none of his lieutenants should get too comfortable. But if things somehow work out as Zaslav envisions they will look for more expansion and buying of assets, which has been this executive’s fallback since he landed in Discovery’s ranks all those years ago.
“I don’t think there’s anybody more capable than David of pulling that off,” Hendricks says. “David’s very likable, which I think has served him well. He has a way of getting people to a ‘yes.'”
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