Pandora's Box, page 31
WBD was generally interpreted as an admission that AT&T’s acquisition of Time Warner was a failure. According to Kara Swisher, the doyenne of tech, Stankey is “the worst media strategist in recent memory.”1 Meanwhile, it left the Discovery Channel, the minnow that bought the whale, saddled with a $55 billion debt, leaving Zaslav to face the knotty conundrum that in one way or another now plagues the entire industry: spend too much, the debt runs up, gutting the price of the stock; spend too little, the debt goes down, gutting the product.
The abyss between WarnerMedia—with its twin jewels, HBO and Warner Bros.—and Discovery was almost as wide as the yawning chasm between AT&T and Time Warner. As Richard Rushfield described in The Ankler, it was like wedding Tiffany to Walmart. Discovery had always been something of a joke, with dumb reality shows like Sex Sent Me to the ER and Here Comes Honey Boo Boo. Since then its streamer, Discovery+, has been spruced up with how-to-tie-your-shoelaces hits like My Feet Are Killing Me and Dr. Pimple Popper: This Is Zit, as well as a sprinkling of science-based documentaries.
High-octane Zaslav had come up through NBC and taken over Discovery in 2006. Joke though it may have been, under Zaslav, Discovery’s profits were no laughing matter. He turned a $5 billion company into one valued at $22 billion in a matter of years.
Still, if HBO and to a lesser degree HBO Max are synonymous with quality, Discovery is synonymous with—well, whatever it is, it ain’t quality. The audience for the former tends to be diverse, single, social media savvy, with few to no kids; the audience for the latter is predominantly comprised of empty nesters, grandparents, white widows and widowers, and strangers to social media. A headline in Daily Beast read, “Laid-Off HBO Max Execs Reveal Warner Bros. Discovery Is Killing Off Diversity and Courting ‘Middle America.’”2
Still, Discovery and WarnerMedia are not the worst match in the world. The fact that they are so different could work to their advantage. Together they could be a more formidable foe for the Big Three streamers than either was alone, poor as they are in live content. Netflix lacks sports, Disney+ lacks reality shows, and Amazon Prime Video doesn’t do news, while WBD does all three.
Solidly built, athletic, with short, curly hair going on gray, Zaslav is no outlier; he’s one of the new old guard, online in regular Zoom meetings soliciting advice from the giants of the recent past, like Iger, Bewkes, and music industry heavy Irving Azoff.
Zaslav bought and salvaged the legendary Beverly Hills home that belonged to Bob Evans. The house had seen its share of drugs, sex, and rock ’n’ roll, had succumbed to weeds, rot, and decay, and become a fitting gravestone for the New Hollywood of the ’70s. By paying $16 million for it, Zaslav laid claim to the legacy of Evans—a mixed blessing, to say the least (he was convicted of cocaine trafficking, and pleaded the Fifth in the so-called Cotton Club Murder)—which committed him to salvaging Warner Bros. as Evans had salvaged Paramount.
One cynical producer, applying a can opener to Zaslav’s psyche, thinks he is still trying to pop the pimple of his legacy at Discovery. “I think Zaslav sees in [Evans] a direct connection to . . . an old school Hollywood mogul, [because] he thinks he won’t be taken seriously as the Discovery guy. Also, he can’t get credit for HBO because Casey Bloys is already doing a good job. But changing Warner lets him rebrand himself and get invited to the Met Ball and Vanity Fair party.”3
Like everyone else in the business, Zaslav has his detractors. “He’s really, really tough. If he likes you, he loves you. And if he doesn’t like you, he doesn’t want to know that you exist,” says one source. “He chews through people and they’re scared of him.”4
Working for Zaslav is “a revolving door, and most people who went out that door had a very bad experience, because the one thing about him is he’s a little bit of a ready-aim-fire guy,” says another source. “He kind of just gets a notion in his head and doesn’t let the facts get in the way.”5
Zaslav had no qualms about making a deal with Stankey. When the two first met, he recalls, “Right away I thought, ‘This is someone that I could do a lot of business with.’ We became friends, we played golf.” Even though Zaslav’s pal Bewkes would come to see Stankey as a buzzard, picking over the innards of his company, Zaslav was impressed that he had been an Eagle Scout, saying, “He was very honest, straightforward, and transparent about, ‘I can do this, I can’t do that, I’m willing to pay this, and if you could do that, I can do more.’ He was quick to create a road map to what could get a deal done.”6 In other words, it all boiled down to a headline in Reuters, “How a Golf Tournament Led to the Merger of Discovery, WarnerMedia.”7
Zaslav implies Bewkes was naïve in assuming that Stankey would be hands-off Time Warner. “You don’t buy a company and have the existing people run it,” he says. “You buy a company because you think you can make it better. Of course John got in there and made changes.” (Bewkes declined to comment.) He continues, “I never consider who’s selling it to me. It’s not about Jeff Bewkes. It’s not about John Stankey. It’s, ‘What are the assets?’ What IP does Warner own—Batman, Superman, Wonder Woman, Green Hornet, The Joker, Harry Potter, Looney Tunes, HBO with Game of Thrones—they have the greatest portfolio of IP anywhere. Together with Discovery’s global reach, we are not just formidable, we could be the best entertainment company in the world.”8
If nothing else, Zaslav thinks big. “Netflix and Disney seem to be running the table, and everybody else is trying to figure out, ‘Am I going to be able to catch them?’” he said to Stankey. “You got two wars going on. You got a war with Verizon and T-Mobile, and you have a war with Disney, Netflix, and Amazon. Wars are expensive, and you are highly leveraged. You need a lot of artillery and you need a strong stomach.”9 Zaslav thought he could furnish the artillery and the stomach Stankey needed. Deal done.
Zaslav, a Democrat, was nevertheless mentored by John Malone, Discovery’s biggest shareholder, a libertarian who donated $250,000 to Trump’s inauguration, although he later repudiated him. Known as the “cable cowboy,” although Al Gore once called him “Darth Vader” on the floor of the Senate, Malone advised Rupert Murdoch when he started Fox News. He is America’s largest landowner—2,200,000 acres—putting John Dutton to shame. Malone is rumored to have also had a hand in the purge of the so-called CNN left, Fox News–baiters like Jeff Zucker, Brian (Reliable Sources) Stelter, and finally John Harwood, shutting them down under the cover of “both-siderism.”
Says Fuchs, “If you were in Sun Valley, you’d see Zaslav following Malone around like a fucking puppy.”10 According to The New York Times, Zaz, as he is familiarly called, reportedly asked him for permission to buy WarnerMedia. Malone reportedly gave him the go-ahead.11
Zaslav is nothing if not unsentimental, and Ann Sarnoff was out before the ink had dried, added to the mass grave that was WarnerMedia. He replaced Sarnoff with former MGM-ers Mike De Luca and Pam Abdy. They fit into his strategy of abandoning expensive theatrical movies in favor of midbudget movies that can make money in both the theatrical and streaming markets.
Despite Zaslav’s upbeat predictions and reputation for shrewdness, in a cards-on-the-table moment, he admitted, re: Warner, “You opened up the closet, things fell out. There were a lot of things that were worse than we thought.”12 J. K. Rowling had to be dragged screaming and kicking to revive the Harry Potters, and the DC Extended Universe, which is the only hive of superheroes that could conceivably challenge the MCU, is no treat, either: see 2016’s embarrassing Batman v. Superman: Dawn of Boredom (oops, that’s Justice). Zaslav booted DC’s boss and replaced him with James Gunn and Peter Safran of Suicide Squad fame. Straight-shooting Gunn wasted no time saying that DC was “fucked up,” and that they were “giving away IP like they were party favors to any creators that smiled at them.”13
Fuchs thinks Zaslav is out of his depth. “Zaslav is like a joke,” he says. “He comes in to run things that he knows nothing about. Two layers of management have been cut out”—Reilly and Greenblatt—“but Zaslav is having every division report to him, particularly when you’re running assets you’ve never run before—scripted entertainment is a completely different culture than reality-based programming—it’s impossible, unless you’re Superman.”14 (Zaslav has an estimated eighteen executives reporting directly to him.)
Whoever Zaslav thinks he is, he apparently knows he’s not Superman. He brought back former Warner president Alan Horn, who is “credited,” if that’s the right word, with the tentpole strategy that “siloed” Warner in his day into powerful baronies called Harry Potters, Dark Knights, and Hobbits. Horn successfully implemented that strategy when he moved to Disney, whose divisions (Marvel, Pixar, etc.) were ready-made for siloing. In other words, Zaslav wants him back, to silo Warner in the image of Disney that Horn had remade in the image of . . . Warner. And so it goes.
Zaslav has positioned WBD to be the antithesis of Netflix, insisting that WBD “will not overspend to drive subscriber growth,” thereby rejecting the latter’s romance with Wall Street based on viewer numbers at the expense of profits.15
Unlike Kilar, who seemed to see the Warner Bros. movies as no more than finger food for the streamers and trampled on exhibition in favor of the small screen, Zaslav smartly sees theatrical as an asset, “‘the top of the funnel’ for drawing eyeballs to lucrative direct-to-consumer services.”16 He nixed Kilar’s plan to produce big-budget movies for direct-to-Max consumption. They will play at theaters first.
The biggest hurdle WBD faces is money. With Wall Street downgrading its stock, chipping away at the $55 billion debt by dropping a show or axing an employee here and there won’t do it. (There are well over one thousand employees.) Personnel-wise, according to a source, Zaz’s approach boils down to “If they are old Discovery people they stay, if they’re old Warner Bros. people they go.”17
Worse, a WBD career ad on the internet touts the company as “Home to the World’s Best Storytellers,”18 but the financial interests of the owners with their debt load and the creative interests of filmmakers are at odds, as illustrated by the Batgirl fiasco in 2022.
Batgirl was intended to be the latest iteration of the Batman franchise, Zaslav’s best shot at mighty Marvel. It was slated for theatrical release and then streaming on HBO Max. Not only was it nearly finished, it brought back Michael Keaton, everyone’s favorite Batman, it featured a Latina actress in the lead, a trans actress in a supporting role, and was written and produced by women and directed by two Muslim men (Adil El Arbi and Bilall Fallah), making it a showcase for diversity. Its $90 million cost, however, apparently led Zaslav to believe it was too big—that is, too expensive—for streaming, but too small for theatrical. In an unprecedented move he decapitated it, refusing to release or air it. Adding insult to injury, he said it was most valuable as a tax write-off. Pointing to the company’s $55 billion debt, Rushfield wrote in The Ankler, “What did people expect? A ceiling on paperclips?”
The problem is that producing entertainment involves creatives, not paperclips, and managing WBD for Wall Street may seem prudent, but it has its downside, to say the least. The burial of Batgirl sent a message to the “best storytellers” they didn’t like, earning Zaslav the sobriquet of “Zaslav the butcher,” the anti-Evans. The careers of Batgirl’s co-directors were set back, if not destroyed. Said filmmaker Kevin (Clerks) Smith, “There was a time when the . . . worst thing a director had to worry about was that, Oh, maybe they don’t take it theatrical, maybe it goes straight to video . . . Now [it’s like] ‘We may not release it at all.’”19 Added John Oliver, one of Zaslav’s employees courtesy of his HBO show Last Week Tonight, “Hi there, new business daddy,” referring to his boss, “I get the vague sense that you’re burning down my network for the insurance money.”20
Subsequently, the creatives that Zaslav wants to attract are beginning to depart for greener pastures. Legendary Entertainment, the producer of the Dune remake and Godzilla vs. Kong, fled WBD, while Aquaman producer James Wan followed Christopher Nolan to Universal after merging with Blumhouse, all bad news for Zaslav. Aladdin producer Dan Lin says that diversity will take the biggest hit. “A recession is coming, budgets are tightening and I’m really worried that diversity is going to be the first thing that goes,” he said. The danger is summed up in the phrase, “go woke, go broke.”21
One of Zaslav’s weaknesses, as someone put it, is that he “doesn’t know what he doesn’t know.”22 (For the record, CAA head Bryan Lourd says the opposite: “He knows what he doesn’t know.”)23
Zaslav seems like he’s ready to go to any extreme to reduce his debt, save, in the words of Puck’s Matthew Belloni, putting Evans’s house “on Airbnb,”24 including taking the ax to the heretofore untouchable HBO Max. He killed Plepler and Lombardo’s high-profile and expensive tentpole Westworld, after the fourth season of what was supposed to be a five- or six-season run, after the numbers fell off dramatically at the end of Season 3. (Season 1 cost at least a no-figure-is-too-much $100 million.) To some degree, the show was a victim of superfans, aka “stans,” who kept guessing and blogging about the plot twists, forcing the showrunners, Jonathan Nolan and Lisa Joy, to complicate the plots to the point that those very same fans complained the shows were incomprehensible.
Reportedly, Zaslav had nothing to do with these decisions, but they’re certainly in line with the cost-cutting fervor that has seized WBD since he acquired it. Generally, HBO and other services like to give creators time to tie up the finales of their important series to avoid upsetting fans—the Deadwood backlash—whereas dropping them midstory reflects badly on the streamer.
Zaslav’s protestations to the contrary, one jaded executive claimed, “This is going to be about finding a suitor [for WBD] and riding off into the sunset with even more multi-generational wealth than he already has.”25
Meanwhile, over at Disney, Chapek was finding Iger a hard act to follow. It seemed like every time he opened his mouth he put his foot in it, but when he kept it shut, he made things worse, a case in point being his initial reticence regarding the furor over Florida governor Ron DeSantis’s so-called Don’t Say Gay bill, which potentially criminalized discussion of sexual orientation and gender with children below the third grade and older if considered age-inappropriate, while empowering aggrieved parents to sue to enforce it. Iger seconded President Joe Biden, who called it a “hateful bill” because it was rightly interpreted as an attack on the LGBTQ community.26
Chapek, on the other hand, said nothing, and is rumored to have worried that Disney could be perceived as too liberal, turning it into a “political football.” He appointed several close advisors to George W. Bush to high-level posts in the company, and refused to join Amazon, Apple, and 148 other corporations in condemning the bill,27 and put his money where his mouth wasn’t, donating to the war chest of every sponsor and co-sponsor of the bill to the tune of $250,000 or more.28 Still, the bill’s supporters accused Disney of favoring “grooming.”
In line with its public face as the “happiest place on earth,” Disney had zero tolerance for controversy. But his silence with regard to DeSantisizing got Chapek in trouble with many of Disney’s employees, especially Gen Z-ers who, prior to the growth of social media, would never have taken up arms against their bosses. A Variety headline blared, “Disney Censors Same-Sex Affection in Pixar Films, According to Letter from Employees,”29 when the studio ditched a scene from Lightyear featuring two women kissing, then restored it after an uproar. Michael Paull, the current head of Disney streaming, acknowledged his employees’ discontent, and unhelpfully suggested they use Disney’s Employee Assistance Program to find therapists!30
Belatedly, Chapek commented, “We were opposed to the bill from the outset,”31 but claimed it was more effective to pressure DeSantis quietly, behind the scenes. Eventually, Chapek actually apologized, saying, “I am sorry,” and pledged $5 million to the Human Rights Campaign (HRC), which fights for LGBTQ rights groups.32 HRC turned it down.
DeSantis’s response was to mock the company as “Woke Disney.” And, as of this writing, seventeen members of Congress have indicated they will not support an extension of the copyright on the Steamboat Willie version of the company’s Mickey Mouse trademark, which has earned it billions in licensing fees. It expires on January 1, 2024.
For its part, Disney has joined Netflix, Paramount, Sony Pictures, Apple, Amazon, and the SAG-AFTRA union in defraying costs for those of their employees who need to travel out of states like Georgia and Texas for abortions.
Meanwhile, the tension between Iger and Chapek escalated. Chapek seemed to endorse the idea that Disney should be a data-driven company. At a June 2021 retreat in Hawaii, Iger gave a talk rejecting the reliance on data as a driver of production decisions, popularized by Big Tech companies like Netflix. Data, he said, “should not be used to determine what stories are told.” He likes to say that had Henry Ford been able to run the data on what people wanted in 1903, they would have said “a faster horse”; instead he gave them the Model A. He added, “If we had tried to mine all the data that we had at the time to determine whether we should make a superhero movie that was essentially about an Afrofuturistic world with a Black cast, the data probably would have said, ‘Don’t do that.’ Black Panther never would have been made.”33
Iger’s statement was interpreted by some as an admission that he regretted selecting Chapek, and a signal that Disney was moving in the wrong direction. One source feels that Iger misjudged his new, handpicked CEO, much like Jeff Bewkes misjudged Stankey.
Nevertheless, the Disney board of directors gave Chapek a three-year extension on his contract in 2022, despite a 60 percent decline in Disney stock as of the summer of that year, and skepticism that he would be able to meet his projection of more than 230 to 260 million subscribers to Disney+ by 2024, given his failure to get the rights to Cricket League matches in India.
