Warner Bros. Discovery CEO David Zaslav brought out the big guns during his address to the new company at its first global town hall for employees Thursday. The newly merged company tapped its most famous employee, Oprah Winfrey, to moderate the event and to help introduce Zaslav to Hollywood. But the get-to-know-you didn’t exactly assuage fears that layoffs and deep staff cuts are on the table, nor did it provide much context about how Zaslav plans to simultaneously transform Warner Bros. Discovery into a dominant streaming player while paying down the mountains of debt it has amassed.
“A year from now the company will look very different,” Zaslav said without offering much in the way of context. “We’ve all been through a lot of disruption… the world is changing. But this is an amazing company.”
Winfrey is a longtime supporter of the media mogul, who has championed the Oprah Winfrey Network (OWN) — a cable channel jointly owned by Warner Bros. Discovery and Harpo Studio — alongside her since its launch in 2008. The early days of OWN weren’t easy, but Zaslav helped Winfrey rally the troops and kick the Discovery brand into gear with its landmark Tyler Perry development deal in 2012.
Winfrey acknowledged that the rocky start of OWN, which Discovery took a 95% stake in back in 2020, was a blow coming after “25 years of succeeding,” which made “failing publicly” with OWN an “overwhelming” experience. Winfrey also noted that she had her own connection to the studio where she was (gently) grilling Zaslav. Her first film, “The Color Purple,” was made by Warner Bros., and the company is backing an upcoming musical version of the story, which Winfrey will produce.
Zaslav also evoked Warner Bros.’ nearly a century-long legacy. He grasped Steve Ross’ original padfolio that was gifted to him, telling employees that he plans to keep it on his desk as a way to pay homage to the history of the studio. Ross, a former Time Warner CEO, was a pioneer and innovator in the cable and video business and masterminded a merger between Warner and Time Inc.
Zaslav took employees through the company’s more recent history, a period that included a brief and tumultuous period under the control of AT&T. Zaslav recounted his initial overtures to AT&T, during which he encouraged the telecom giant to spinoff WarnerMedia and merge it with Discovery. When talks briefly stalled, he told Stankey the pair could revisit their discussion in the next six months. To which, Stankey acknowledged that AT&T burdened with debt, required a quicker turnaround. “I don’t think we have six months,” Stankey said. But where some might have seen desperation, Zaslav saw opportunity. Zaslav chalked up the successful marriage of the companies to “karma” and evoked Franklin Delano Roosevelt by noting that the new partners had a “rendezvous with destiny.”
The event was held out at the iconic Warner Bros. lot in Burbank, with employees across the globe — of which WarnerMedia and Discovery each have plenty — attending virtually. Staff in Los Angeles began making their way to the event nearly an hour before things officially started.
The studio’s newly minted owner kicked things off with a sizzle reel with a booming movie trailer-style voiceover declaring “it’s a new chapter.” Winfrey pressed Zaslav for specifics about what that next chapter could look like. What, she asked, was the “vision” for this union?
“The consumer wants easy,” Zaslav said. “Now, when you pull all of these assets together? That’s where we go…one platform that we take everywhere in the world and in every language”
But bringing the companies together comes with risks. Warner Bros. Discovery has billions in debt and Zaslav has pledged to find some $3 billion in synergies. That means that there will be layoffs, and that’s causing a lot of anxiety across the Warner Bros. empire, which also includes HBO, CNN and TNT. Winfrey acknowledged that people feel unsettled and asked Zaslav what people can expect to happen next?
“Be patient with us… we are going to focus on less layers and be more entrepreneurial,” Zaslav said. “In some areas there will be less people…”
Winfrey pressed Zaslav on how he planned to make decisions about those cuts.
“There’s a process and a team from both sides who has been working hard on these plans,” Zaslav said. “In the area where Warner and Discovery have largely different business (i.e. sports, movies) there will be less change.”
Staffers in the room interpreted Zaslav’s remarks to mean that much of the pink-slipping will happen at the cable networks where there is the most overlap between what Discovery does and what Turner and others have historically focused on.
Zaslav is taking the helm as the media business is being upended by new players such as Netflix and Disney, who are laser-focused on streaming, as well as tech giants such as Amazon and Apple who are investing heavily in the content space. Getting bigger is seen as essential to survive.
“We need to lay out ‘what is winning?'” Zaslav said.
The new media mogul pointed to CNN as one of the recent winners, citing its on-the-ground coverage of the war in Ukraine as something that left it ahead of the cable news pack.
Zaslav did give a hint about the type of programming he intends to push, saying that “sports is a big part of our future.” He also told staff that he had been talking to HBO/HBO Max Chief Content Officer Casey Bloys about making the streamer “a sports destination.”
On Monday, the first day Warner Bros. Discovery begins trading on the Nasdaq under the “WBD” ticker, Zaslav visited Hudson Yards for a series of informal meet-and-greets with WarnerMedia employees before heading to Washington, D.C., for a meeting with senior executives and CNN anchors at roughly 6 p.m. On Tuesday, Zaslav went to the company’s Atlanta headquarters.
Some staffers felt that the presentation on Thursday dwelled too much on the past and didn’t provide enough concrete information about how the integration would unfold. Others, however, believed that Winfrey helped personalize Zaslav, getting the mogul to open up about his children, his marriage and his values. At times, the event played less like a corporate event and more like an episode of Winfrey’s talk show, with the host quizzing Zaslav on how he managed to “get it all done” and asking him what movie made him cry recently. The answer to that last query was “CODA,” a film it should be noted that was distributed not by Warner Bros., but by Apple, one of the tech players causing headaches for traditional media companies.