Hollywood is abuzz with speculation approaching Warner Bros. Discovery’s first quarterly earnings since becoming the nation’s No. 2 entertainment giant on Thursday. Multiple insiders told TheWrap they expect Chief Executive Officer David Zaslav to announce a major restructuring of marquee streaming platforms HBO Max and Discovery+ during its results or soon after.
The move will result in a gutting of HBO Max, significant layoffs for its executives and staff to minimize redundancies with HBO and a combined streaming service with Discovery+ with a harder line separation between the scripted and unscripted content operations.
Zaslav and his surrogates have been quietly telegraphing to top showrunners and talent that HBO content chief Casey Bloys will take a more senior role as the two streaming platforms are combined, according to a top Hollywood manager.
We’re told Bloys, the hitmaker who nabbed HBO 140 Emmy nominations and is set to launch the “Game of Thrones” prequel “House of the Dragon” on Aug. 21, will certainly take charge of all scripted content.
“HBO is very safe. If this was ‘Game of Thrones,’ Casey Bloys won,” a Hollywood agent with knowledge of the plans said.
Bloys may also take responsibility for content overall, including Discovery’s slate of unscripted shows. But other insiders tell us that unscripted will most likely fall under an executive on the Discovery side of the company, which has built its brand with nonfiction content produced for cable channels Discovery, TLC, Animal Planet, Food Network, HGTV, History and more. Whomever leads the content is expected to report directly to Zaslav.
WBD is in a precarious situation when it comes to appeasing Hollywood’s top creators, which was made even more urgent on Wednesday after the studio killed the DC Comics film “Batgirl.” The entertainment industry was caught by surprise that the mostly completed film staring Leslie Grace, which cost about $90 million to make, won’t be seen theatrically or on its streaming services.
Speculation that layoffs were at hand began rippling through HBO offices late Tuesday afternoon, with one insider stating the pay-TV channel’s employees are “all freaking out” and that “all I know is they’re folding HBO Max into HBO, and there will be redundancies.”
“Everyone in Warner Bros. Discovery is nervous at the moment, and [they’re] starting to look at alternative job options in case they get the axe,” a company insider said. “Sounds like they’re not doing HBO Max scripted shows anymore with HBO taking over, so less scripted shows overall.”
HBO Max development is expected to be especially hard hit with layoffs with two sources placing the amount of dev staff cuts at 70%. “HBO Max has a development team, which is a lot of overhead,” the agent with knowledge explained. “And why do you need a development team at HBO and HBO Max? It’s redundant. Just have Casey Bloys’ team do all the scripted TV development.”
A representative for Warner Bros. Discovery didn’t respond to TheWrap’s request for comment.
Wall Street has been expecting that Warner Bros. Discovery would soon make some major moves to realign the company’s streaming assets, which also includes news powerhouse CNN. But Zaslav and his top deputies have been tight-lipped about the timing or structure its streaming strategy would take. And there’s been plenty of speculation of what the new service will be called — keeping the HBO and Discovery brands, or potentially a new name that nods to the iconic Warner Bros. studio.
It’s unclear what Zaslav’s streaming plans are for CNN. Chris Licht, a personal friend of Zaslav’s who was hired to replace Jeff Zucker at CNN, has the indomitable task of overhauling the news network’s streaming fortunes after the debacle called CNN+. It remains to be seen if that will be bundled in some way with the new combined Discovery-HBO streaming service.
HBO and HBO Max has 76.8 million subscribers, as of the end of March, while Discovery+ has 24 million. By comparison, Netflix has 220.7 million subscribers while Disney+ has 137.7 million.
Zaslav, who cobbled together Discovery’s $43 billion deal to buy WarnerMedia and was paid $246 million for doing it, on Thursday releases the new combined company’s first quarterly results. Wall Street will be hanging on his every word about a promised $3 billion in merger cost savings, and any details about film slate ambitions.
Warner Bros. Discovery stock has spiked 12% in just the past three trading sessions and continued to move higher on Wednesday. But there is uneasiness in the market about how successful Zaslav can be in trying to completely overhaul a bloated studio system at the same exact time a recession is expected to careen into the economy.
Zaslav’s been in the fast lane since taking power about 100 days ago.
His ouster of Warner Bros. head Toby Emmerich led to a new lineup of the film industry’s heavy hitters. He brought on former Disney film chief Alan Horn last week to help shepherd the company’s theatrical strategy along with new studio chiefs Michael De Luca and Pamela Abdy.
Zaslav has thrown down the gauntlet by breaking the studio into three distinct divisions — Warner Bros. and New Line, DC Entertainment and Warner Animation Group — with a Disney-style structure that reports directly up to him. This new three-silo system gives Zaslav the ability to run Warner Bros. “like an old-school film mogul,” one Warner insider said. Even this weekend’s $23 million launch of “DC League of Super-Pets” didn’t do too shabby for the doldrums of the summer’s pandemic-era box office period.