In a conference riddled with bad news, Zaslav left positive the untapped potential of DC’s IPs, now in the hands of James Gunn and Peter Safra
“It’s more complicated than we thought, much worse than we thought.” With these words, David Zaslav, CEO of Warner Bros. Discovery, summarized the situation of the company -after the merger between Discovery and WarnerMedia- facing 2023, sharing figures in the red from HBO and anticipating a possible downward modification of the expected earnings for the coming year if the advertiser market does not change its trajectory.
In his presentation at RBC’s TIMT 2022 Global Conference in New York, Zaslav painted a rather difficult landscape for the industry and for WBD in particular, beginning with his concerns about the current market for advertisers, which he called the worst since 2020, which includes the pandemic, and capable of derailing the forecasts for 2023. WBD expects to earn 12,000 million dollars of profit next year, but Zaslav assures that it will not happen without a significant change on the part of the advertiser market.
According to the executive, the situation was not positive, but it has worsened significantly in recent months.
This has translated into a reduction in the workforce, the cancellation of various projects and the suggestion, with the clear purpose of starting the negotiation from a strong position, that there are certain sports rights, at a high price, that may not be are necessary: ”In sport we are landlords. It is not good to be a landlord,” Zaslav declared. “We don’t have to have the NBA,” he said, something that clashes a bit with the recent renewal of the most important figure of his NBA halftime show on TNT, Charles Barkley, who signed a 10-year contract.
HBO Max and a more difficult process than expected
Zaslav said the Discovery-WarnerMedia merger has been more difficult than expected because certain properties are “unexpectedly worse off than we anticipated.”
At the top of the list of disappointments is HBO, which in 2021 lost 3,000 million dollars. The prestigious brand invested USD 7,000 million and was barely able to recover half of that amount. “I don’t know if I’ve ever seen anything like it,” Zaslav said. “With all those direct-to-streaming movies on top of that.”
“Our entire library moved to HBO Max,” he detailed. “We weren’t selling any of it. But everything was there. We looked and said, ‘most of that is not being seen, or we don’t think anyone is signing up because of this. We could sell it non-exclusively to someone else.’”
Zaslav defends the theatrical release, assuring that the numbers indicate that films that come from a big screen release perform five times better on streaming platforms. “[Releasing movies direct to the platforms] was just a way to drive subscribers to drive up the share price,” he noted. “Today’s subscribers are like clicks in the ’90s. People were running around buying companies and adding clicks.”
On the positive side, Zaslav seems to see DC as a trump card that WBD should take advantage of: “DC is one of the biggest opportunities for this company. Our company is a creative company, so we found two great people,” referring to James Gunn and Peter Safra named co-chairs of the new studio.”You’ll see a lot of growth in DC. We haven’t made a Superman movie in 13 years. The idea is to” push DC as far as it can go, which is what they’re going to do. and the Lost Kingdom will arrive in 2023.
