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Discovery Closes $43 Billion WarnerMedia Acquisition

Warner Bros. Discovery blue logo

Discovery said it closed its $43 billion acquisition of WarnerMedia, which was spun off from AT&T.

The deal creates Warner Bros. Discovery, a giant media company with movie studios, cable TV networks, news and sports operations, as well as a growing presence in TV’s streaming wars.

AT&T, abandoning its effort to build a media company in order to sell more mobile phones, last year spun off DirecTV.

The company will be run by David Zaslav, who was Discovery's CEO and was already one of America’s highest-paid executives. Zaslav’s total compensation for 2021 was $246 million.

Since AT&T and Discovery announced plans for the deal, Zaslav has bought a house on the West Coast to hobnob with the Hollywood types who were never comfortable with AT&T’s executives. 

On Thursday, Discovery announced the senior executive team that will run the combined company, with Zaslav filling most top jobs with executives who have worked with him for years. Most of the executives brought in to staff WarnerMedia by AT&T are departing, led by WarnerMedia CEO Jason Kilar, who served just under two years.

When AT&T took over Time Warner in 2018, most of the top Time Warner executives left or were replaced.

On the entertainment side, Casey Bloys continues as chief content officer of HBO and HBO Max; Channing Dungey continues as chairman of Warner Bros. Television Group; and Toby Emmerich continues as chairman, Warner Bros. Pictures Group. They all report directly to Zaslav with the departure of Ann Sarnoff, who was CEO of WarnerMedia’s studios and networks group. 

Also reporting to Zaslav is Kathleen Finch, who was head of programming at Discovery’s Lifestyle Networks and will be taking on a larger role as chief content officer, US Networks Group. Between Discovery and Turner, that group has 40 U.S. networks. 

Reporting to Finch are Nancy Daniels, chief content officer of Discovery Factual networks; Brett Weitz, general manager of TBS, TNT and truTV; and Tom Ascheim, president Warner Bros. Global Kids, Young Adults and Classic. 

As was announced last month, former Late Show with Stephen Colbert executive producer Chris Licht will run CNN. replacing Jeff Zucker, who was removed from his post after a relationship with a long-time subordinate was disclosed.

Streaming, important to Warner Bros. Discovery as with other media companies, will be overseen by JB Perrette, who ran Discovery Streaming and International.

To watch the money, Discovery chief financial officer Gunnar Wiedenfels will be the combined company’s CFO, with revenue generation is headed by Bruce Campbell. On Friday, Discovery said Jon Steinlauf, Discovery’s ad sales chief who worked at Turner earlier in his career, will be in charge of selling ads in the U.S.

WarnerMedia’s Gerhard Zeiler will serve as president international for the new company.

The company said it is looking for a diversity chief, as well as a chairman of its sports business. Lenny Daniels, president of Turner Sports and Patrick Crumb, president of regional sports networks, will report to the new guy.

Discovery has promised Wall Street that it will find about $3 billion in cost cuts to help pay for the debt the company will take on to pay AT&T $43 billion for WarnerMedia. That means a lot of people with the company now won’t be in the near future.

On Discovery’s last earnings call, Zaslav said Warner Bros. Discovery will be competing with Disney and Netflix, but it won’t break the bank on spending. “Our goal is to compete with the leading streaming services, not to win the spending war,” he said.

Still to be figured out is how to bundle the new company’s streaming services, HBO Max, Discovery Plus and the recently launched CNN Plus.

At an investment conference in March, Discovery CFO Wiedenfels said that HBO Plus and Discovery Plus would be merged into one “blowout DTC product,” a bundling strategy many had predicted.

“Right out of the gate, we’re working on getting the bundling approach ready,” Wiedenfels said. “But the main thrust is going to be harmonizing the technology platforms, building one very strong combined direct-to-consumer product and platform, and that’s going to take a while.” 

Wiedenfels has said a lot of the cost savings will come from rationalizing the two companies’ streaming tech stacks.

“We’re spending roughly $6 billion for technology and marketing between HBO Max and Discovery Plus,” Weidenfels said. “Clearly, once we have successfully migrated those technology stacks in Q1, there is going to be tremendous opportunity to reduce costs.” ■

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.