On Friday, people left work, came home and sat down with their friends and/or family, and watched something on TV. But John Stankey, the CEO of AT&T, and David Zaslav, the Discovery CEO, were holed up in the latter’s house hammering out a multi-billion dollar deal that would forever change the face of Hollywood. And three days later, all we know is that WarnerMedia and Discovery are now merging, and if you work at one of those companies, you came back to work today wondering what the hell is going on? Unfortunately, it doesn’t look like we have a lot of answers.
According to AT&T, the telecom giant has decided to strike a deal to combine its WarnerMedia company with Discovery to create this mega-union of media giants that now includes CNN, TBS, TNT, HGTV, Food Network, Discovery Channel, Warner Bros. film studio, and streaming services HBO Max and Discovery+. The new company will be lead by Discovery CEO David Zaslav, who will oversee the combined media output of the venture, which according to THR, is said to spend roughly $20 billion per year on content.
But again, there are some major questions that we still don’t have solid answers for. And even after an interview with THR, CEO Zaslav isn’t able to really confirm much of anything other than this is a big deal (literally) and it’s expected to close in 2022 after shareholders voting and whatnot.
The one thing that Zaslav will speak confidently about is the fact that the “number one priority” of the new company is to build relationships with creators. This is something that WarnerMedia got flack for after its controversial deal to send WB’s 2021 film slate to HBO Max without letting the creators provide input.
“I will be anywhere in the world the creatives are, to strive to create the best creative culture,” Zaslav said. “We want our company to be the place where people that want creativity, they want flexibility, they want stories, they will come to us.”
Outside of that? Again, the future is unclear. And if you’re Jason Kilar, current CEO of WarnerMedia, you woke up today not sure what your future is going to hold. With Zaslav acting as the CEO of the combined WarnerMedia/Discovery venture, that doesn’t seem to leave much room for Kilar. However, when asked about this, Zaslav understands that Kilar can be a solid asset to have around. But much like the status of a lot of workers at WarnerMedia and Discovery, the future of who will survive the merger isn’t fully understood right now.
“Jason is a fantastic talent,” Zaslav said. “The focus will be on talking to everybody at Discovery and everybody at WarnerMedia and we will be trying to figure out how to get the best people to stay.”
For consumers, the immediate impact of this merger is also up in the air. Obviously, until the deal is done in 2022, there won’t be any noticeable changes. But there are two massive elephants in the room when it comes to consumer-facing products from WarnerMedia and Discovery, namely their respective (fairly new) streaming services, HBO Max and Discovery+. Both of these services seem to be building their brands and subscriber base at a respectable rate. And both of these seem to be (on paper) very different beasts, as far as content goes, with HBO Max focusing on Warner Bros.’ library combined with HBO Max-branded scripted originals and Discovery+ primarily appealing to unscripted content including a ton of “90-Day Fiance” spinoffs. But outside of Disney, who owns Disney+, Hulu, and ESPN+, there’s not much proof that one media company can competitively market and run multiple streaming platforms.
All that to say, what the hell is going to happen to HBO Max and Discovery+? Will they combine? Will they be separate platforms? Again, all Zaslav can do is shrug and offer non-committal words.
“We will have enormous flexibility in how we package our streaming services,” Zaslav said. “we will look at the range of options to unlock value here in the U.S. and around the world.”
Look, I wish there was something that you could hang your hat on and say, “THIS is what this deal means to the future of entertainment!” Unfortunately, it just feels like the foundation has been laid with this merger. We know the builders (for the most part). We just don’t have any idea what the actual building is going to look like. But we do know this is going to be a skyscraper.