In 2021, David Zaslav had a dream. The CEO wanted to take the newly-merged Warner Bros. Discovery and create a streaming app to compete at the same level as Netflix and Disney+. WBD had $50 billion in debt, though, and somehow the way forward became buying HBO Max, rolling out one app to rule them all in 2023 in which brand names were left behind in favor of just “Max,” and dropping promising TV series and movies for tax write-offs. We mocked Zaslav mercilessly for the asinine move of taking the HBO out of HBO Max, let alone his insistence on having all of Warner, Discovery, HBO, CNN, Food Network, HGTV, TCM, Cartoon Network, etc, housed in one app. But the joke was on us! Because here we are two years later and… Max is being renamed its original name, HBO Max. And it turns out that announcement was just the beginning: on Monday WBD revealed a new plan to split into two companies, one focused on streaming and content production, the other on traditional television. Luckily, John Oliver still gets to make fun of both.
Warner Bros. Discovery CEO David Zaslav will remain as the leader of the streaming-focused entity, while Gunnar Wiedenfels, the company’s CFO who has become known for finding new ways to cut old costs, will lead the TV company. The separation is expected to be completed by mid-2026, subject to closing and other conditions, and the bulk of the current company’s debt — nearly $38 billion — will be assigned to the TV entity.
“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 company is emulating a strategy recently put into place by rival Comcast. That conglomerate is breaking up NBCUniversal, with plans to place the bulk of its cable networks in a new publicly-traded spinoff called Versant while keeping its broadcast and streaming assets under the better-known entity, NBC.
Warner has had to contend with many obstacles since being formed by the combination of AT&T’s WarnerMedia — the company once known as Time Warner — and the former Discovery Communications. Under Zaslav, Warner has fiddled with streaming strategies and deprived top cable networks TNT and TBS of the original content they need to flourish. Warner recently lost long-held rights to televise NBA games, a contract that gave its networks a major sporting franchise that drew large crowds on the regular. And it has written down the value of its cable properties.
Warner has recently appeared to find some rhythm. The Max service has developed solid audiences for programs including “The Pitt” and “White Lotus,” and the company has recently articulated a strategy of targeting audiences interested in premium content, rather than a broader crowd. And Warner has struck new distribution deals with cable and satellite companies that call for what are seen internally as favorable terms, despite the loss of the NBA.
The streaming company will encompass the Warner TV and movie studios, HBO and HBO Max and a games and experiences division. The company will focus on building out the HBO Max streaming service and investing in programming. Meanwhile the TV company will include Warner’s TV networks around the world along with specific digital brands tied to the TV entities, including Discovery+, Bleacher Report and CNN’s new streaming products.
“Gunnar Wiedenfels… who has become known for finding new ways to cut old costs,” is one of the more chilling sentences I’ve read. The language is so plain, so innocuous… so ominous. And speaking of Herr Wiedenfels, people are saying it’s almost a guarantee that since his TV side is assuming most of WBD’s remaining $38 billion debt — canning all those projects for tax write-offs only shaved off $12B of their original debt! — it means the company is hoping for an acquisition deal. As for Zaslav, remember shortly after the writers’ strike in Hollywood when he was asked to comment, and his oh-so-gracious reply was, “I’ve never regretted overpaying for great talent”? If only Dave had opted to “overpay” for some talented business managers, maybe we wouldn’t be in this full circle moment now, in which nothing has been gained and plenty has been lost. And suffrin’ succotash, I think you know where I’m headed now. Where does all this leave our beloved Looney Tunes?! What’s up, Dave? Quit being so dethpicable and give us back our looney friends; you can’t deny there’s gonna be new space for them to jam on the app!
Photos credit: Getty, JPI Studios/Avalon, Jeffrey Mayer/Avalon
😂😂. That’s all folks.
Zaslav is like the Christopher Lloyd villain in Who Framed Roger Rabbit, he’s forcing cartoon characters and beloved stories into the green vat of acid dip. Gaahh.
That is a chillingly awful line. So, more garbage coming on the tv side too, then (and movies?).
Why does Zaslav still have a job? Im thinking any of us could have run this better than “only” saving $12 billion in debt. And wouldn’t have lost NBA rights for TNT.
It’s such a (horrifically) perfect example of the world right now. These fuckwits think they’re masters of the universe but they’re so dumb and cruel and just make everything worse. They don’t understand or appreciate art so they’ll happily destroy it with AI and/or stupid streaming and shelving plans.