David Zaslav is relocating from New York to the Left Coast: The CEO of Discovery, who is set to lead the proposed combo of WarnerMedia and Discovery, said he will primarily be based in Los Angeles by the time the deal is expected to close in mid-2022.
“I’m moving to California,” Zaslav said, speaking Wednesday at the Paley Center for Media’s International Council Summit. He said he’ll have an office on the Warner Bros. lot, because “that’s where the content is made… The better content we have, the better chance we have of being the leading media company in the world.” Zaslav added that he will return regularly to the East Coast to keep tabs on the company’s media businesses based there, including CNN.
Zaslav, interviewed at the Paley event by the New Yorker media writer Ken Auletta, said he will be “very hands-on” in running the merged media and entertainment company, calling the gig a “dream, surreal opportunity.”
Zaslav declined to reveal details of the new management structure of Warner Bros. Discovery — the proposed name of the newly merged media company — keeping his cards close to the vest and saying only “we have ideas” about what that will look like. One change that appears certain is that WarnerMedia CEO Jason Kilar will be out.
AT&T is spinning off WarnerMedia to combine it with Discovery, a transaction expected to close in mid-2022 pending regulatory approvals. Under the planned WarnerMedia spin, the telco will receive $43 billion in cash to pay down debt. Last week, Discovery said it projected that the combined entity will have a debt ratio of 4.5 times annual earnings before interest, taxes, depreciation and amortization, down from a the previously expectation of 5 times EBITDA.
For Warner Bros. Discovery, streaming will be a primary focus. Zaslav, however, hasn’t specifically detailed how the companies’ go-to-market streaming strategy may change under one roof. As he has before, in the Paley interview he labeled Netflix and Disney “formidable” rivals but reiterated his claim that the combined Discovery-WarnerMedia will have a bigger content library than Netflix.
In announcing Q3 earnings, Discovery last week said it had 20 million paid direct-to-consumer streaming subscribers worldwide, including for Discovery Plus. AT&T, in its Q3 report, disclosed that HBO and HBO Max subscribers had 69.4 million combined global subs in the third quarter, up 1.9 million sequentially, as international growth offset a U.S. loss related to the discontinuation of HBO’s distribution on Amazon Prime Channels, and was on track to hit 70 million-73 million by year-end.
During the Paley interview, Auletta asked Zaslav about CNN and the news business. The Discovery chief avowed that news is a “very important” part of the overall portfolio, explaining why the company invested in the U.K.’s right-leaning GB News channel that launched earlier this year.
Asked about Fox News Channel, Zaslav responded that it is “much more of an advocacy network than a news network,” adding that Discovery’s Food Network and HGTV are “advocacy networks” that appeal to fans of those lifestyle subject areas.
