The Blockbuster Discovery, WarnerMedia Merger Has Closed

Discovery Inc. and WarnerMedia closed their megamerger Friday afternoon, adding a new behemoth to the entertainment industry. The two companies will combine television, movie and news operations that draw revenue of nearly $50 billion, forming one of the biggest media companies in the country, reports The NY Times.

The decision by AT&T, WarnerMedia’s parent company, to spin off its entertainment division and merge it with Discovery — in a deal announced in May — will be felt throughout the media world in the months to come. It could push smaller competitors to hunt for deals to beef up in size. And it means that rivals like Netflix, Disney, Amazon and Apple now have a new ferocious competitor for streaming dominance.

David Zaslav

The job of making the merged company a success falls to David Zaslav, the garrulous 62-year-old veteran cable TV executive who has been running Discovery for 15 years. He will take over as chief executive of the new company, which will be called Warner Bros. Discovery in a nod to the Hollywood studio started nearly a century ago.

“Today we begin to write an exciting next chapter for both companies as Warner Bros. Discovery, a pure-play storytelling company that brings together the most cherished content, brands and franchises,” Mr. Zaslav wrote to his new employees in an email late Friday afternoon.

Zaslav’s Discovery has been no slouch. The company owns cable networks like Food Network, HGTV and TLC and has the rights to an enormous array of nonfiction programming ranging from the highbrow (natural history programming like “Serengeti”) to low (“My 600-lb. Life” and “My Feet Are Killing Me”).

📺Understand the Turmoil at CNN

• Chris Cuomo: The star anchor was fired for trying to help his brother, Andrew Cuomo fight off a sexual harassment scandal. He is now seeking $125 million from CNN for wrongful termination.
• Jeff Zucker Resigns: The network’s president stepped down after failing to disclose a workplace relationship revealed during the Chris Cuomo inquiry.
• A New Leader: Chris Licht, a veteran television producer who helped create “Morning Joe” at MSNBC, is set to succeed Mr. Zucker.
• Direction in Flux: WarnerMedia, CNN’s parent company, is expected to merge with Discovery Inc. in one of the nation’s largest media mergers.
• The Streaming Race: CNN+, a late arrival at the streaming party, is on a hiring spree. Can it get viewers already overwhelmed with options to pay?

But now Zaslav is entering a much bigger, and more rarefied, position in the entertainment world. Unlike his more understated predecessors at AT&T, he has been bursting with enthusiasm for the last year while coming closer to taking over a powerhouse that will include HBO, CNN, TBS, TNT and the huge film and TV studios of Warner Bros.

Zaslav, one of the highest-paid chief executives in media, earned a compensation package valued at $246.6 million last year.

According to Bloomberg, the merger with AT&T Inc.’s media division gives Discovery Chief Executive Officer David Zaslav control of a huge portfolio of assets, including the cable channels HBO, CNN and TBS, as well as the Warner Bros. film and TV studio. Combined, the new Warner Bros. Discovery Inc. will have projected revenue of $54 billion next year. Here are some of the decisions investors will likely hear about in coming weeks.

The company will hold its upfront presentation in May, revealing a combined brand strategy for advertisers. It will announce a new price for selling its two main streaming services, HBO Max and Discovery+, jointly as a bundle. Eventually the two will be combined, but that could be months away.
While the main leadership team was announced Thursday, one key role has not yet been filled. The company plans to announce a new head of its sports division, a role formerly held by Jeff Zucker, who resigned in February. The company will be a powerhouse in live sports, with broadcast rights to professional basketball, baseball and hockey in the U.S., the men’s college basketball tournament, and the Olympics in Europe, as well as cycling, tennis, motorsports and golf.

Discovery has promised $3 billion in cost synergies that will help reduce the company’s debt load. Much of those savings are expected to come through layoffs in areas like ad sales, engineering, corporate finance and legal. Employees at HBO and Warner Bros. are expected to mostly be spared.

Zaslav, 62, will embark on a listening tour next week that will have him meeting with employees in New York, Washington, D.C., Atlanta and Los Angeles.