Discovery CEO David Zaslav has taken the first major step in overhauling his business after it acquired WarnerMedia, the company behind it Casablanca, friends and game of Thronesand installed his lieutenants as senior leaders of the combined group.
JB Perrette, who led Discovery’s international and streaming businesses, will assume one of the biggest responsibilities in entertainment: leading the streaming businesses of the combined Warner-Discovery. Kathleen Finch, another Discovery executive, will lead the television channels including TBS and TNT, while Discovery’s Chief Financial Officer, Accounting Officer and People Officer will hold their respective positions in the new group.
The $43 billion Merger of Warner and DiscoverySet to close as early as Friday, Hollywood is the latest epoch-making mega deal as traditional media struggles to survive in the entertainment business whose future is determined by streaming.
Zaslav overhauled Warner’s top ranks, replacing almost all of the senior management team with his own team. Nine Warner executives, including Chief Executive Jason Kilar, announced their exit from the company this week.
Only three of the 13 members of the new executive team are from Warner’s old guard: Casey Bloys, HBO’s longtime head of content, Toby Emmerich, chairman of Warner Bros’ motion picture business, and Gerhard Zeiler, head of international affairs.
The merger is a notable coup for Zaslav, an over-ambitious executive who cites media tycoons like Ted Turner and the Warner brothers as inspiration. The 62-year-old has spent the past decade managing Discovery, a relative minnow with a market value about a tenth of Disney’s market value. He’s now taking charge of a company that makes more revenue than Netflix.
This is Warner’s second restructuring in recent years, after telecoms giant AT&T paid $85 billion to acquire the group and enter Hollywood in 2019, only to pull out and sell the company three years later.
Zaslav wants to cut managerial levels so senior executives will report directly to him, said a person familiar with his mindset. “He wants to be as close as possible to the companies and content leaders,” the person said.
Perrette is tasked with merging the merged companies into a unified streaming service to compete with Netflix and Disney. Warner owns some of Hollywood’s most valuable assets, including HBO, Warner Bros, and CNN, while Discovery has focused on reality programming that spans nature, home improvement, and dating shows.
If Zaslav and Perrette succeed, Warner-Discovery could rival Netflix as one of the few truly global streaming services targeting over 200 million subscribers.
Gunnar Wiedenfels, Discovery’s chief financial officer, told investors in March that once the deal closes, his focus will be “really, really clear on cutting costs.” He’s trying to save $3 billion by eliminating overlaps in technology, real estate and other business costs.
Job losses are widely expected and could be in question given Zaslav’s high salary package. The chief executive received $247 million in compensation last year, including more than $200 million in stock options, a number criticized by proxy advisor Institutional Shareholder Services.
“There’s going to be a lot of restructuring, a lot of heavy lifting that’s not going to be comfortable for anyone, but it has to be done,” said Jessica Reif Ehrlich, an analyst at Bank of America.
“The asset mix is incredible,” she added. “These were undermanaged assets, not just under AT&T, which we all knew wouldn’t be the best manager, but old Time Warner had been decked out for a sale before that.”
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