In another cutting costs and restructuring move, Warner Bros. Discovery’s CEO David Zaslav has put into motion yet another set of reductions. This week the company laid off about 26% of the workforce at Warner Bros. Television. Matt Belloni, from Puck News, and Lucas Shaw, from the entertainment news group at Bloomberg, discuss what this means for the company’s future.
Bloodletting at Warner Bros. Discovery
Matt: We've had some bloodletting going on at Warner Bros. Discovery. It's been this kind of slow moving train wreck for the past few months where they are systematically going division by division at this company, and reductions in force are happening all over the place.
This week, it was the TV division, Warner Bros. Television, and the cuts were more significant than some of the other divisions, about a quarter of the staff was laid off.
What is the impact of this?
Matt: It begs the question of how much is this going to impact a company that has been one of the more prolific television suppliers of the past three decades. The Warner Bros. TV studio has been uniquely successful among all of the others, and that they have sold many, many shows to non-Warner Bros. outlets: shows like “ER” and “West Wing” that aired on NBC, “Ted lasso” on Apple, all the CW shows.
Lucas: I answer your question with another question, which is, “What does David Zaslav want Warner Bros. Television to be?
“I suspect Zaslav wants it to sell across the industry…”
Lucas: You mentioned all the different shows that it has sold to other companies. It long thrived in part because it was not affiliated with a broadcast network, so CBS had a big TV studio that sold other people, but really sold to CBS. Disney has a TV studio that sold to other people, but really sells to ABC, and now especially only sells to its streaming service. Comcast, NBC Universal, has a TV studio that sells across, but there is a bias towards NBC, if Warner Bros. can sell to everyone. Under the previous regime, they started to stop that. They wanted Warner Bros. to really focus on HBO Max. I suspect Zaslav wants it to sell across the industry.
… and to cut
Lucas: But he's also looking at this and saying, “I need to cut. Do we need to be making as many shows as we have been? Or are there areas where there's duplication with the assets we already have because we produce a bunch of shows especially in unscripted?” I imagine that they let go of a lot of the unscripted people at Warner Bros. TV.
What is the mood at that company right now?
Lucas: For the mood of the company, I think it's been pretty downtrodden this year, because this is a company that has been bought and sold a couple of times now, and they've had to go through several restructurings and several rounds of layoffs. At a certain point, I think you just become pretty cynical about it all because you don't know when it's going to stop.
Matt: That's definitely the mood that I hear from people. It's just like, “Oh, what today? What next?”
Consolidation of WB’s animation divisions
Matt: David Zasloff, the CEO of Warner Bros. Discovery, he has promised these $3 billion in cuts and that's not easy. We saw a lot of duplication in the two companies, but this goes beyond just duplication.
We've seen the consolidation of different animation divisions and Warner's has a long history of animation from Looney Tunes, to Adult Swim and Cartoon Network, to Hanna-Barbera. And they really are squeezing those and putting them together. We'll see what the impact of that is going to be.
Squeezing as many profits as they can
Matt: The measure right now of success is profitability, squeezing as many profits as they can, and the Zaslav mentality on this is, they want to sell and get the most value for their shows that they can. It doesn't matter where it lives, if it's a sale to Netflix, if it's a sale to Apple, or if it's on HBO max, so right now it's just all about profits, and if they have to cut, they have to cut.