from the fail-upward-trust-fund-brunchlords dept
You might recall how the Warner Brothers Discovery merger promised everyone amazing new synergies for the media sector. Instead it wound up being a giant sloppy turd of a deal resulting in endless layoffs, the shuttering of numerous popular media brands, the cancellation of a long line of popular programming, higher consumer prices, and lower product quality from HBO to CNN.
The man in charge of this hot mess, CEO David Zaslav, has steadily been rewarded for his incompetence with gigantic, ever-escalating pay packages that never reflect his lack of real-world competence.
Warner Bros. Discovery lost $11.5 billion last year. The company is in the process of firing another round of workers for its executives mistakes. Its streaming service increasingly consists of reality TV slop and C-tier content. The merger was so pointless, and traditional cable TV channels are so worthless, Time Warner and Discovery are planning to unwind the disastrous partnership:
“Warner Bros. Discovery, the film and TV colossus behind HBO and CNN, announced on Monday that it would cleave itself into two companies, separating its cable networks and streaming businesses.”
The NYT coverage of the split only faintly hints at Zaslav’s incompetence, and doesn’t even mention the word “layoffs” despite another round hitting only just last week.
They’re currently squabbling over how to split the debt between the two “new” companies, created predominately by the pointless merger. At the same time, Zaslav is poised to get a massive $52 million pay package, comprised of a cash bonus of $23.9 million and $23.1 million in performance-based restricted stock grants. Zaslav will continue to lead the company’s most important assets: its streaming business and movie studios.
Company investors are increasingly raising eyebrows at Zaslav’s pay package, recently issuing a symbolic vote against Zaslav’s outsized compensation. Zaslav will get paid anyway, but the CEO is seeing increased criticism, even in media trade magazines like Variety that tend to soft sell executive incompetence, labor abuses, and outsized executive compensation for fear of losing access.
A major justification by the Warner Bros. Discovery board for Zaslav’s pay package was the savings Zaslav created through mindless consolidation and layoffs, Variety notes:
“One of those goals for Zaslav was to “Complete integration pipeline; Implement cost controls to adjust cost to serve in declining linear [TV] revenue environment.” On this front, Zaslav “Achieved incremental cost savings of $1.8B in 2024, significantly overdelivering against internal goal,” according to the WBD compensation committee. (Those savings were achieved in part through major layoffs.) The committee determined Zaslav had met the outlined strategic goals at 115% of his target.”
But executives like Zaslav are purely extractive animals. They temporarily goose stock valuations and generate tax breaks by cannibalizing their own brands through pointless consolidation that may save a little money through cuts, layoffs, and illusory “synergies,” but very clearly harm the overall survivability of the brand and longer term quality.
Zaslav has made it very clear that he sees more media consolidation coming under Trumpism, which will rubber stamp your problematic mergers provided you demonstrate to the king that you’re suitably racist and promise that your reporters won’t engage in any serious journalism critical of the regime.
That means more price hikes and bad decisions are right over the horizon as the company pursues impossible growth through bottomless price hikes, even more layoffs, and further quality erosion. Distorted financial motivations made possible by financial shell games ensure nobody learns from experience or faces accountability for decisions harmful to workers, employees, or the brand.
Filed Under: consolidation, david zaslav, executive compensation, journalism, media, mergers
Companies: warner bros. discovery
