Here's everything you need to know about the world of television for Wednesday, August 21st, 2024:
FIVE QUESTIONS I'D ASK WARNER BROS DISCOVERY CEO DAVID ZASLAV
I think it's fair to say that David Zaslav is an embattled chief executive. The company has lost much of its stock value since the merger several years ago, its streaming service Max continues to struggle with slow growth and excessive churn, TNT looks to have lost its NBA package in part due to Zaslav's misreading of the negotiations. And this is a partial rundown of the challenges facing the company right now.
In general, the CEOs of Hollywood's biggest media companies don't like to give interviews or talks outside of a few carefully curated appearances at investor conferences or the annual conversation with a favored and predictable CNBC host. They worry that they'll be asked an uncomfortable question or that they'll say something which the markets will misread and that it will affect the stock price.
But if there is one thing I learned from my days as a financial reporter, it is that there are times when a CEO needs to change the conversation. They need to engage with a different audience and face some tough questioning. Because that is the best way to turn around a growing lack of confidence in the executive's ability to successfully lead the company.
Today, Warner Bros. Discovery announced that Chairman and CEO David Zaslav will present at the Goldman Sachs Communacopia + Technology Conference on September 12th. And that Warner Bros. Discovery Chief Financial Officer Gunnar Wiedenfels will present at the Bank of America Securities 2024 Media, Communications & Entertainment Conference on September 4th.
These events are safe places for the duo, who will likely face some carefully curated questioning while having the opportunity to provide a relatively unfiltered pitch to the audience that they have a clear path forward for success. But aside from a few headlines, it's unlikely that either appearance will have a noticeable impact on the conventional wisdom about the future of the company and their role in its fortunes - or lack thereof.
But I'll argue that David Zaslav should sit down with someone outside of his media safe space. There are a number of journalists I think would do a good job with the interview, but this is my newsletter. So I'll break my normal interview guidelines and include the ten questions I would most like to ask David Zaslav. Although I can't promise that I won't have some followups:
1) I recently looked at EBITDA projections from the time of the merger and the projection was that the combined company would have around $13.6B in EBITDA in 2024. And the latest projections are around $9.7 billion. Even worse, about 85% of WBD's EDITDA comes from the company's linear TV business, and that business has been shrinking by nearly 20% annually. So when you look at those numbers, what do you see as the best path forward in order to stabilize the company's fortunes in both the near and mid-term?
2) In order to make the merger a reality, WBD was left with nearly $40 billion in debt. And while you've argued that the majority of that debt is long-term and at relatively low interest, that debt has also meant that you have been limited on the size of strategic moves you can make. The company has also spent billions buying back bonds and aggressively reducing debt. What do you say to critics like myself who argue the company would have been better off devoting some of that money to spending on content and other things that would likely have grown your still-struggling streaming business?
3) Can you walk me through your thought process about the negotiations to renew the NBA deal? You had the contractual ability to match the deal for the package won by Peacock. And while the reported $2.5 billion a year is a lot of money, those games are also the centerpiece of TNT Sports. And those games have helped keep that network's carriage fees extremely high. Losing those games means TNT's carriage fees are likely to drop substantially during upcoming carriage negotiations. So given that scenario, how did you come to the decision to not match Peacock's offer? Was it primarily an inability to come up with that price or have you made the calculation that reduced carriage fees for your linear channels will be offset by the savings from not spending $2.5 billion a year on the NBA while also spending some lesser amount on some other sports rights fees?
4) Even before the merger was completed, you said in interviews that you planned on shutting down Discovery+ and roll those subscribers into Max. You later delayed that move and instead also added the bulk of current Discovery networks programming to Max as well as Discovery+. Can you talk about the future of Discovery+ and whether shutting it down is still the ultimate goal? How many subscribers do you think might be unwilling to make the move?
5) Given the significant drop in the stock price of Warner Bros. Discovery since the merger, how do you answer complaints from some investors that shifting your bonus compensation to one based of free cash flow instead of the company's stock price or some other metric that has lagged under your leadership provides you and the company with the wrong incentives for defining success?
And that doesn't even touch on any of my questions about decisions on the theatrical business or the international television markets.
Somehow, I don't think I'll be interviewing him anytime soon.
AD BREAK
For a limited time, Paramount+ annual plans start at $29.99/yr. That’s like $2.50/mo for 12 months. Cancel anytime, effective at end of billing cycle. New & former subscribers only. 18+. T&Cs apply. Offer only valid through this link
SOME COMMENTS FROM READERS
I don't mention the comment section of this newsletter nearly often enough, but I wanted to highlight some of the feedback from yesterday's newsletter, most of which centered around streaming television and complaints that there is too long of a delay between seasons of original shows:
My only issue is these long hiatus gaps. When is the next season of the Bear? 2027…28. Wait that long for 8 maybe 10 shows? And they wonder why people drop the service. My set up is I don’t pay all bills off one card. There’s the A list expenses. They are Card A, Card B is for party and bullshit. It’s not always funded because those things aren’t essentials. So when my Disney plus yearly subscription came up and the card wasn’t funded -the service was cancelled. Please tell me what am I missing? I did likewise for Amazon.
That was 2 or so years ago. What’s the comprise then? Ok so we aren’t going to 20+ episodes. But it’s a joke to make fans wait years for 10 hours of shows they can watch in its entirety in one weekend then make them wait years for the following season. It’s why I stopped going on big roller coasters as a kid. All that hype. Over in mere minutes then a long wait to repeat the moment. I’ll pass.
Does anyone see the folly in this? (A good library will keep me around but it can’t be a science project trying to find shows you like not what the algorithm suggests).
And there was a lot of discussion about the difficulties in discovering a favorite show has returned:
Don't get me started on Crave (a major Canadian streamer that has a bit of all kinds of content including being the home of streaming HBO in Canada). Until literally a month or two ago, it didn't even remember that I am keeping up with new releases of a show and would forget to add it back to my queue when a new episode dropped.
If you'd like to add a comment to any newsletter, just click the "comment" button at the bottom of the newsletter.
TWEET OF THE DAY
ODDS AND SODS
* American Experience's The American Vice President premieres Tuesday, October 1st on PBS. According to the network, the documentary "explores the little-known story of the second-highest office in the land, tracing its evolution from a constitutional afterthought to its current position of enormous political consequence. Focusing on the fraught period between 1963 and 1974, when a grief-stricken and then scandal-plagued America was forced to clarify the role of the vice president, the film examines the passage and first uses of the 25th Amendment and offers a fresh and surprising perspective on succession in the executive branch."
* Hulu has announced that all eight episodes of Rivals, the upcoming adaptation of Dame Jilly Cooper’s iconic novel, will launch on Friday, October 18th. Set against the backdrop of the drama, excess, and shocking antics of the power-grabbing social elite of 1980s England, Rivals delves headfirst into the ruthless world of independent television in 1986.
* Deadline is reporting that fast food chain Chick-Fil-A has been ordering shows for its still-unannounced streaming service. I've heard these stories before from companies and the service and the shows that had supposedly been ordered never surfaced publicly. So we'll see what happens.
WHAT'S NEW TONIGHT AND TOMORROW
WEDNESDAY, AUGUST 21ST:
* Back To 15 (Netflix)
* Cursed Gold: A Shipwreck Scandal (NatGeo)
* Icons Unearthed: Harry Potter (Vice)
* Like A Girl (Fuse)
* Nice Girls (Netflix)
* PBS News Special: Democratic National Convention (PBS)
* Pop Star Academy: KATSEYE Series Premiere (Netflix)
* The Accident Series Premiere (Netflix)
* Time Bandits Season One Finale (Apple TV+)
* Wyatt Earp And The Cowboy War (Netflix)
THURSDAY, AUGUST 22ND:
* Avoidance (Britbox)
* Baby Fever (Netflix)
* Bonds Will Be Broken (LMN)
* Classified Series Premiere (Freevee)
* Fifteen-Love Series Premiere (Sundance Now)
* GG Precinct Series Premiere (Netflix)
* Mermaid Magic Series Premiere (Netflix)
* Pretty Guardian Sailor Moon Cosmos The Movie (Netflix) - [first look video]
* Reasonable Doubt Season Two Premiere (Hulu)
* Secret Lives Of Orangutans (Netflix)
* That 90s Show Season One Part Three Premiere (Netflix) - [first look video]
* Unbelievably Vegan With Chef Charity (Max)
SEE YOU ON THURSDAY!