Top entertainment execs lash out at Warner Bros CEO: 'He's done a terrible job'

Daily Mail​

a day ago

Warner Bros. Discovery CEO David Zaslav has been ripped by top entertainment executives over the massive 'waste of time' caused by his decision to cleave the company in two.
In a move to 'maximize its potential', Zaslav announced on Monday a plan to split Warner Bros. Discovery into two companies to separate streaming services from cable.
HBO and HBO Max would lead one of the new companies while Turner-Discovery channels would be in the other, according to Warner Bros. Discovery.
'By operating as two distinct and optimized companies in the future, we are empowering these iconic brands with the sharper focus and strategic flexibility they need to compete most effectively in today's evolving media landscape,' Zaslav said in a statement.
The Warner Bros. split will, according to Zaslav, 'invigorate each company by enabling them to leverage their strengths and specific financial profiles.'
Yet, it has seen an almost 60 percent drop in shares over five years, including during its attempt to compete in streaming with Netflix and Disney+ in 2022. Its latest move has received further backlash from fellow entertainment insiders.
'This whole thing was a waste of time,' an executive anonymously told WaxWord. 'They lost tremendous shareholder value. It was a failure. It's a deal that never had a shot and shouldn't have been done. But they've also done a terrible job running the company.'
Another added that 'the cable bundle has been rotting the business for the past eight years'.
They claimed the move was made by Zaslav and shareholder John Malone in an attempt to exit Discovery at the expense of employees, who have already faced waves of layoffs and increased uncertainty, The Wrap reported.
A third executive, however, said that the cable channel spin off 'is a huge problem off [Zaslav's] plate. It gives it to Gunnar [Wiedenfels, the company's CFO]. Everyone is doing it - Lionsgate, Comcast, now Warner Bros. and the last person who'll figure it out is [Disney CEO] Bog Iger.'
They also pointed out that another deal in 2022 with AT&T - which merged WarnerMedia and Discovery and cost the company $43 billion - might not have been beneficial for the company but that it ultimately helped Zaslav.
'He's still at the table. If he hadn't done the deal, he'd own Scripps and Discovery, and those things are the great disappearing act. So he paid way too much, but he's still at the table,' they said.
'In the end, for him, it was great. For the shareholders, it's a disaster.'
The question now, however, is how the move will drag the company out of its $37 billion debt, especially considering it is requiring a $17.5 billion short-term loan to buy back debt from bondholders, the New York Times reported.
Warner's whopping debt is said to be divided between the two separated companies, the release said.
'It's safe to assume that the majority of the debt is going to live with global networks and a smaller portion, but not insignificant portion on streaming and studios as well,' said CFO Gunnar Wiedenfels, CNBC reported.
One former HBO executive labeled the move as 'another [sad] attempt to salvage a sinking ship.'
'I have spoken with a few of my former surviving colleagues from the "glory" days and they are quite concerned that this is another nothing-burger that gets press and does not move the needle as a long-term strategy,' the exec continued, citing current employees concerns of cuts and 'devaluation of their work.'
But another executive believes the move is setting the company up for an inevitable future.
'Anyone who thinks that Warner-HBO thing is going to continue as an independent company is missing what's going on here,' they said.
'That thing is extremely attractive. It's small enough in net value for any of those [streamers] - Netflix, Amazon, Disney - to buy it. Which they will.'
Rich Greenfield, an analyst at LightShed Partners, told the NYT that the split could entice a technology buyer with TV and movies that aren't tied to cable networks.
Greenfield added, however, that the split should have happened 'years ago,' and the move will likely cost Warner many employees in its cable business to make it more profitable.
All three executives agreed, that the move announced on Monday was inevitable and the company failed to head the warnings years ago.
Greenfield referred to Robert Iger, CEO of Disney, who warned of declining ESPN subscribers.