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WarnerMedia Faces Big Executive Decisions as It Attempts to Woo J.J. Abrams

Talk about an odd couple.

Former rivals Kevin Reilly and Bob Greenblatt — having now joined forces at AT&T’s WarnerMedia — have begun pitching Hollywood as a united front on the company’s still unnamed, yet-to-be-launched subscription streaming service.

It’s a strange alliance, given that the executives were often locked in heated standoffs, back when Greenblatt oversaw NBC Entertainment and Reilly ran herd at Fox Broadcasting, then TNT and TBS.

But that’s what a mega-merger can do to onetime adversaries. And make no mistake: Greenblatt, WarnerMedia Entertainment chairman, and Reilly, chief content officer of WarnerMedia Direct-to-Consumer, have common cause. They are on the hunt for a huge breadth of original programming, ranging from children’s content to premium HBO-style dramas, as WarnerMedia gears up to do battle with the Disney Pluses and Netflixes of the direct-to-consumer universe.

The team-up comes amid a dizzying array of executive and structural changes at the company. As AT&T tries to acclimate to the entertainment industry, the telecom giant is also looking for a new CEO of Warner Bros. following Kevin Tsujihara’s scandal-ridden exit. Additionally, it’s attempting to woo “Star Wars: The Force Awakens” director and “Lost” co-creator J.J. Abrams with a production deal that could be worth $500 million.

A Warner Bros. leadership decision is expected to be made within the next few weeks, although a source familiar with the discussions says that the company is being deliberative and not rushing the process. Anne Sweeney, former Disney Media Networks co-chair and ex-Disney-ABC TV president, is the industry veteran whose name pops up most frequently both on Warner Bros.’ Burbank lot and at WarnerMedia’s swank new Hudson Yards outpost in Manhattan. Sources say former Yahoo chief Marissa Mayer was suggested to WarnerMedia brass as a possible replacement but not seriously considered. WarnerMedia declined to comment on its ongoing search.

WarnerMedia chief John Stankey is keeping all leadership discussions close to the vest. Some believe that the new entertainment head will either come from corporate parent AT&T or from executive breeding grounds outside the entertainment realm entirely. As Silicon Valley and Hollywood adopt more of each other’s qualities, the selection of a tech veteran would not be entirely out of left field.

Employees at the studio are concerned about the outcome of the search. Tsujihara may have been forced out amid reports that he had used his position to secure auditions for an actress with whom he was having an affair, but he was well liked and respected for his business acumen and knowledge of the digital world. WarnerMedia would like to find a replacement who shares that skill set, but one whose talents don’t overlap with those of Warner Bros. film chief Toby Emmerich or Warner Bros. Television CEO Peter Roth. The fear is that if they bring in an executive whose talents are more creative and less balance-sheet oriented, they risk ruffling Emmerich’s and Roth’s feathers and potentially losing two talented leaders.

There’s also the issue of morale. Staffers say they’ve existed in a state of paralysis for more than a year. First they waited for Time Warner to close its sale to AT&T, a looming leadership transition that left executives wary of making long-term decisions on film or television strategy that could run afoul of new bosses. Then they were faced with Tsujihara’s exit and the possibility that a new Warner Bros. head will ride into town with a much different set of goals and initiatives.

But the incoming leader of Warner Bros. won’t just have to navigate tricky office politics. It will have to be ready to jump into the creation and launch of the new WarnerMedia direct-to-consumer streaming platform. Otter Media CEO Tony Goncalves recently took the helm of development of the product, a service that will charge into the marketplace just months after the November launch of robust competitor Disney Plus.

Disney’s subscription streaming platform will debut with a well-stocked library of TV shows and movies, including coveted titles from its Marvel, Lucasfilm and Pixar archives, as well as nine original TV series. It will need a steady flow of enticing originals to attract viewers in a streaming market already saturated with choices, but the big money seems pleased: An introductory peek at the service at Disney’s investor day in April boosted the faith of institutional investors on Wall Street.

Like Disney Plus, WarnerMedia’s new service will have to leverage original shows and movies to appeal to paying subscribers, and Stankey’s team appears ready to flex its collective muscle.

Given the promise of AT&T’s capabilities, the economics of WarnerMedia’s proffered deals to content creators are attractive, though not as hefty as what Netflix is willing to pay, according to someone familiar with WarnerMedia’s offerings. The telecom giant’s tech infrastructure and massive customer base — more than 100 million consumers in the U.S., including 22 million premium TV subscribers — offer a level of reassurance that others do not.

BTIG media analyst Rich Greenfield believes the original programming on WarnerMedia’s upcoming SVOD service will “dwarf” that of Disney Plus, adding that HBO already outspends what Disney Plus is planning to allocate for originals.

“There’s a tremendous embedded audience” given HBO’s existing subscriber base, Greenfield says. And following The Wall Street Journal’s report that AT&T plans
to bundle HBO and Cinemax with the new service for $16 to $17 a month, Greenfield says the main question for consumers is whether the service will warrant the extra dollar or two per month over what they pay for HBO alone.

HBO will function as the service’s core component, surrounded by content from The CW, Adult Swim, New Line Cinema, Warner Bros. and other brands. WarnerMedia has also signaled that it will add one of the crown jewels of its programming vault — “Friends” — to its service after its licensing agreement with Netflix is up at the end of the year.

At this time, the future of WarnerMedia’s DC Universe is unclear. The recently launched online hub for original DC programming, comics and news has yet to make a significant footprint, and its continued existence is something of a peculiarity as AT&T extinguishes WarnerMedia’s niche streaming products, such as FilmStruck, one by one in the wake of last year’s merger with Time Warner.

The abrupt cancellation of “Swamp Thing” has raised eyebrows. Live-action “Titans” had previously been renewed, the well-received “Doom Patrol” is awaiting word on a second-season pickup and the animated “Harley Quinn” series is supposed to launch this year. But no plans for more original content have been made public since “Stargirl” was announced in July 2018, two months prior to DCU’s launch.

The revolving door of executives going in and out of WarnerMedia has been spinning for months. The company is now minus Richard Plepler at the head of HBO and David Levy as president of Turner. Both of those media brands are enduring their own transformations, with HBO tasked with a content explosion and Turner’s TBS and TNT clarifying their priorities. (TBS is expected to be the primary home for scripted programming; TNT will likely sharpen its focus on sports.)

And Greenblatt and Reilly’s under-the-radar movements are happening while the much more high-profile hunt for Abrams’ business is underway. A multiplatform deal with the über-producer would likely translate to a waterfall of content, given his prolific creative capabilities. That would undoubtedly be a boon for WarnerMedia, with its massive pipeline to fill in the coming months and years.

As Variety has previously reported, the courtship for Abram’s talents has brought out top brass from the major studios, including Disney head Bob Iger and NBCUniversal CEO Steve Burke. Yet WarnerMedia is said to be in the lead, with Stankey heading the charge to ink a deal with the creator. Apple, which greenlighted the Abrams-produced limited series “My Glory Was I Had Such Friends,” starring Jennifer Garner, has emerged as the other major contender.

But Abrams has more of a history with WarnerMedia, given the 13-year partnership between his Bad Robot Prods. and Warner Bros. TV. Bad Robot is producing HBO’s “Westworld” and the upcoming “Lovecraft Country,” and has previously produced shows such as “Lost” and “Fringe.” If WarnerMedia can hold off Disney and Comcast and snag Abrams, it could be a desperately needed shot in the arm, even if it’s a tonic that comes with a half-billion-dollar price tag.

Joe Otterson contributed to this report.

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