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Zaslav’s Split Decision

Warner Bros. Discovery boss David Zaslav is positioning his company for some dealmaking by announcing a restructuring. But the timing has raised eyebrows.

Author

Oliver Darcy
December 12, 2024

David Zaslav. (Photo by Kevork Djansezian/Getty Images)

On Thursday evening, New York-based Warner Bros. Discovery employees gathered on the west side of Manhattan for the company’s annual holiday party. They enjoyed alcoholic beverages, mingled with their colleagues, and — this year — speculated about a new elephant in the room: The future of their corporate home.

Earlier in the day, of course, the David Zaslav-led media conglomerate announced that it will split its assets into two internal divisions: a unit comprised of streaming and studios, and another made up of its legacy cable channels. Or, put more plainly: A unit that is growing and a unit that is in inexorable decline.

The cable assets have been a drag on the company's earnings as consumers cancel costly cable packages in favor of streaming services. Earlier this year, WBD took a $9.1 billion write down on its networks (TNT, TBS, CNN, HGTV, etcetera), acknowledging the assets are worth far less today than they were just a few years ago, even though they do still remain lucrative. Thursday’s announcement of a reorganization, which is expected to be completed in 2025, will please investors.

Indeed, the company's reorganization announcement sent its shares soaring 15%. The stock closed the trading day at $12.49, the highest it has been all year and up a whopping 60% in the past six months.

While The Street was thrilled, the move left people inside WBD wondering what Zaslav has up his sleeve. Those in the linear division, particularly, expressed feelings of anxiousness, wondering if they are now part of the so-called "bad assets" division of the company and destined to be cleaved off from the mothership, SpinCo style. At the WBD holiday party, which Zaslav attended, I'm told…

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The Fourth Estate

The CNBC logo. (Courtesy of CNBC)

Status Scoop | The Name Game: Since Comcast announced that it will spin off its cable assets, one particular question has been top of mind for employees of the news channels: Will they be allowed to keep their names? With regard to CNBC, the powers at be have rendered a decision. I’m told by a person with direct knowledge of the matter that CNBC will be permitted to keep its name when SpinCo gets off the ground next year. The fate of MSNBC’s name, however…

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