David Zaslav, CEO of Warner Bros. Discovery, on the current showdown between the major charter cable provider and Disney: “I don’t know much in particular about this dispute, but it seems like this is a moment.”
“It’s not clear whether this is a quickly resolved moment – and we’re back having an industry in protracted decline … or whether this is a more significant moment,” he told investors at a Goldman Sachs briefing today when asked. . About the story of what so far seems to be the last day, as the Pact draws a line in the sand. Spectrum Cable’s parent company wants to pay less for Disney content, including ESPN, in effect to restructure the entire agreement, and has said it will seek similar terms from all software providers as contracts expire and the cable bundle continues to wane.
Linear networks make up about half of WBD’s revenue. Zaslav understands this and says his management is doing everything it can, preparing for a linear meltdown since the Warner Bros. merger. and Discovery 16 months ago. He described it as a “relentless mission” to restructure “the world we live in today”. However, he believes the company’s channels are affordable, and although the clock is ticking, WBD doesn’t have any carriage deals coming up for renewal until 2025.
The relaunch of Max, the addition of ad-light copy, the debut of live CNN news on streaming device soon, and eventually the addition of live sporting events are all part of the campaign. As well as paying off the company’s huge debts. It is “command and control of all of our assets, including intellectual property” and “all of this work was aimed at putting ourselves in a position where we were ready for just such a moment.”
He paid tribute to CNN’s new leader Mark Thompson, the former director-general of the BBC and the CEO who turned The New York Times into a digital powerhouse.
Regarding sports broadcasting, he said the announcement will be made soon.
Asked about the ongoing strikes in Hollywood, which have lasted longer than the company had projected in its financial guidance for the last quarter, Zaslav said the strikes are “actually about people, writers and actors who have been out of work for a very long period of time.” We are a content company, a storytelling company. We need to do everything we can to get people back to work. But most importantly, people need to be fairly compensated and to feel valued.
He noted that Warner Bros. Paid Dune: Part Two to 2024 where strikes alter release schedules. “We just hope as a company that we can resolve the strikes.”
At the same time, long strikes, by shutting down much of the production, help boost the company’s free cash flow and squeeze profits. Yesterday, WBD changed its full-year 2023 financial estimates to include earnings of up to $500 million, but free cash flow is much higher than $5 billion, which was already the high end of its previous forecast.
“It will be more than 5 (billion dollars) meaningfully,” he said.
“We just hope as a company that we can resolve the strikes.” He indicated that the company had to pay Dune: Part Two November through March 2024.