Discovery’s chief executive David Zaslav has taken the first big step to overhaul its business after it acquires WarnerMedia, the company behind Casablanca, Friends and Game of Thrones, installing his lieutenants as senior leaders of the combined group.
JB Perrette, who has led Discovery’s international and streaming businesses, is set to take on one of the biggest jobs in entertainment: running the streaming businesses of the combined Warner-Discovery. Kathleen Finch, another Discovery executive, will run the television channels including TBS and TNT, while Discovery’s chief financial officer, accounting officer and people officer will hold the equivalent jobs at the new group.
The $43bn merger of Warner and Discovery, which is set to close as early as Friday, is the latest era-defining mega-deal for Hollywood, as traditional media fights for survival in the entertainment business whose future will be ruled by streaming.
Zaslav has overhauled Warner’s top ranks, replacing almost all of the senior management with his own team. Nine senior executives from Warner, including its chief executive Jason Kilar, announced their exit from the company this week.
Only three of the 13 members of the new leadership team come from Warner’s old guard: Casey Bloys, the longtime content chief for HBO, Toby Emmerich, chair of Warner Bros’ movie business, and Gerhard Zeiler, head of international.
The merger is a remarkable coup for Zaslav, a hyper-ambitious executive who lists media tycoons such as 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 that is about a tenth that of Disney. He now takes charge of a company that makes more revenue than Netflix.
This is the second restructuring for Warner in recent years after telecoms group AT&T paid $85bn in 2019 to acquire the group and launch itself into Hollywood, only to retreat and sell the company three years later.
Zaslav wants to eliminate management layers so that senior executives report directly to him, said a person familiar with his thinking. “He wants to be as close to the businesses and content leaders as possible,” the person said.
Perrette is tasked with combining the merged businesses into a unified streaming service to compete with Netflix and Disney. Warner owns some of the most prized assets in Hollywood, including HBO, Warner Bros and CNN, while Discovery has focused on reality programming spanning nature, home improvement and dating shows.
If Zaslav and Perrette succeed, Warner-Discovery could rival Netflix as one of the few genuinely global streaming services aiming for 200mn-plus subscribers.
Gunnar Wiedenfels, Discovery’s chief financial officer, told investors in March that he would be “really, really clearly focused on cost” reduction after the deal closed. He is seeking to cut $3bn by eliminating overlaps in technology, property and other corporate costs.
Job losses are widely expected and may come into scrutiny given Zaslav’s large pay package. The chief executive received $247mn in remuneration last year, including more than $200mn in stock options, a figure criticised by proxy adviser Institutional Shareholder Services.
“There’s going to be a lot of restructuring, a lot of heavy lifting to be done, which isn’t going to be comfortable for anybody there, but it has to be done,” said Jessica Reif Ehrlich, an analyst at Bank of America.
“The asset mix is incredible,” she added. “These have been undermanaged assets not just under AT&T, which we all knew wouldn’t be the best steward, but the old Time Warner had been dressed up for a sale before even that.”