Good evening, I'm Dylan Byers.

 

Welcome back to In the Room, my biweekly private email on the intrigue and inside story behind what’s going on in the media industry. 

 

Over the past week, I’ve been covering the fallout from Jeff Zucker’s ouster, and its implications for CNN’s journalists, the network, and its new parentco., Warner Bros. Discovery. Today, I’m discussing the latest details, including some fresh reporting, with Puck co-founder, Jon Kelly. Herewith…

Reading the Zazleaves

Notes on Zaslav’s plans for Warner Bros. Discovery, more insight into the CNN mess, and plenty of succession questions.

Jon Kelly: Dylan, you’ve had a week covering the fallout from Jeff Zucker’s resignation. Naturally, the most heated conversations are about what’s going on inside CNN, but I’m most curious about the higher-altitude picture. Not only does Warner Bros. Discovery C.E.O. David Zaslav have to hire Zucker’s replacement, but he’s also likely to replace Zucker’s old boss, Jason Kilar, who is presumed to exit at the conclusion of the deal. What are you hearing about this?

 

Dylan Byers: It turns out that no one is going to replace Jason Kilar. David Zaslav will have the heads of the entertainment, sports and news divisions of Warner Bros. Discovery report in to him, sources familiar with his plans tell me, effectively eradicating the layer that Kilar inhabited. This is to be expected—Zaslav is integrating a public company with a division of a conglomerate, and Kilar’s role was a synergy. 

 

So the more relevant question is: who is Zaslav going to pick to lead Warner Bros. Discovery’s combined entertainment assets, which will include Warner Bros., HBO, and a litany of linear networks? Sources who have spoken to Zaslav tell me that's a question that occupies far more of his brainspace than anything involving CNN—despite all the ink we've spilled on Jeff Zucker over the last week.

 

At WarnerMedia, the top entertainment job is held by Ann Sarnoff. I don't see Sarnoff keeping that particular role at Warner Bros. Discovery. She might be replaced by a new entertainment chief of Zaslav's choosing or have her portfolio shift in a reorganization that puts multiple leaders at the helm of various entertainment divisions. In the event that Zaslav opts for the former, who does he want in that chair? I think Disney entertainment chief Peter Rice is high on Zaslav's list. He's an accomplished and well-respected leader, and someone who, while ambitious, shuns the spotlight and might therefore be comfortable working as a Zaslav deputy. 

 

As I reported back in December, the pervasive chatter among Hollywood insiders is that Rice is restless at Disney, especially since a corporate restructuring stripped away his P&L and put more power in the hands of Disney distribution chief Kareem Daniel. A source close to Rice disputes that and says he’s quite happy where he is, and that he recently re-signed with Disney, but it's possible that the restructuring gives him an opening to get out of there should he get a better offer. (Representatives for Disney and Discovery declined to comment.)

 

There are other names floating out there, too. Kevin Mayer, who was passed over for Disney’s top job, has been advising Zaslav during the merger, and there's ample speculation that Zaslav would want him to stay on full time. It's unlikely to happen, though, mainly because Mayer and his fellow Disney alum Tom Staggs are busy at work creating their own Blackstone-backed media empire, which has been making acquisitions at a notable clip. Some Hollywood executives (not agents) have even gone so far as to speculate that Bryan Lourd, the legendary partner and co-chairman of Creative Artists Agency, would be a perfect candidate. But this seems like Monday morning quarterbacking, and far-fetched. Sure, no one has better relationships in the business, but Lourd is busy working on CAA’s acquisition of ICM, among other things. Plus, Lourd is a hero in the town, and gets to be his own boss. Anyway, a source close to him shot it down. (A CAA representative declined to comment.)

 

In the end, Zaslav has been keeping this information quiet. Whatever the case, this is a far more important question to him than the CNN question—albeit not nearly as captivating a drama.

You reported earlier this week that John Malone’s thinly veiled critique of CNN’s partisan coverage got under the skin of Zucker and his top executives. Any more you can share here?

 

When Malone made his remarks in November, I fixated on them for several weeks—so much so that I began one December column by apologizing to our readers for assigning “a possibly irrational level of importance” to his words, and what they might tell us about the future of a Warner Bros. Discovery-led CNN. What I learned in the days following Zucker's ouster is that the Malone comments negatively impacted morale at the network and were a major preoccupation for Zucker and other CNN executives, as well.

 

First, CNN's top brass felt like the comments were unfair and misrepresented the vast majority of what CNN does, which is hard news. They felt that Malone was criticizing the entire network—which includes thousands of journalists and the biggest international correspondent staff in the business—merely because of three hours of opinionated primetime programming. Some also assumed that Malone, a Fox News viewer, wasn't even familiar with CNN's broad offering and that his feelings were colored by Fox's critical coverage of CNN. Nevertheless, they took Malone's comments seriously, and had discussions about whether or not they needed to do more to stress the hard news side of the business, and whether or not they should tone down some of the more outspoken commentary on the network. Whether anything came of those conversations, I don't know.

 

Meanwhile, Zucker’s orbit continues to suspect that Malone’s words could have somehow facilitated his ungracious exit. That suspicion, though, is groundless. But it tells you how much Malone’s comments got under Zucker’s skin.

 

As you’ve mentioned before, only Zaslav really knows who will run CNN next. But the fact that he has said that a new president will be in place “at or before” the close of the deal suggests a replacement is coming in during the next months. The most frequently mentioned contenders are Ben Sherwood, who has tons of TV and entertainment experience; David Rhodes, who has a great TV news pedigree; Andrew Morse, an insider who has some streaming experience; Virginia Moseley, another insider with good standing in Washington; and Jay Sures, a UTA superagent, whose name-checking in this conversation seems to be quite triggering. What’s the case for each?

 

Each candidate lacks what another one has. The Sherwood/Rhodes route gets you an experienced newsroom leader with a deep understanding of the television business, but not necessarily someone who has the trust and loyalty of the staff or a sense of where the business should be heading. The Morse/Moseley route gets you a known quantity with a deep understanding of the company and, in Morse’s case, a firm grasp of streaming and digital, but not necessarily someone who can fit Zucker's shoes as a leader and dealmaker. And the Sures route gets you someone who has fierce loyalty among the top talent, but no proven track record of running a cable news network, or any television network for that matter. (Disclosure: I’m a UTA client.)

 

I understand why Sures is triggering for some—a Hollywood talent agent running CNN?—but there's a reason his name keeps coming up, and a reason he is spoken about more favorably than others in my conversations with CNN talent. First, love and loyalty for the leader is an instrumental part of this business, as demonstrated by the unprecedented level of mourning over Zucker's ouster. On that note, Sures has traveled to both Washington and New York this week to meet with, and console, his clients and CNN executives.

 

Now, it’s one thing to have the love of the talent when you're their agent and can always fight on their behalf and say yes to them. It's another thing entirely to be their boss and have to make hard decisions that inevitably piss some of them off and force them to run to... their agent. 

 

Throughout last week, I was stunned by the language invoked by CNN stars as they processed their mourning. How much of this is anger versus fear for their own futures as Warner Bros Discovery pivots toward streaming? I mean, surely CNN talent would be reacting differently if this were all going down at Fox News, right?

 

I'm actually somewhat stunned by the lack of self awareness among some CNN journalists. I keep trying to imagine this from Kilar's perspective... Here are all these journalists talking about the integrity of their journalism, and yet in the next breath some of them are demanding to know why Kilar hadn't protected Zucker or made allowances for his very clear violation of company policy. 

 

Try to imagine the fit these journalists would be throwing if they found out this was happening at another network. A year ago, I reported that Zucker wanted Allison Gollust to replace him as president of CNN, if and when he left the network. How much criticism would we be seeing from CNN talking heads if it was an NBC or Fox News executive who wanted to promote the subordinate with whom they were having an intimate relationship? I completely understand the love CNN insiders have for Zucker, and I understand their frustrations with Kilar's handling of the situation. But there are a few folks over there who would benefit from some greater self awareness.

 

A year from now, do you think Kilar might be vindicated? Do you think his decision to handle it abruptly will age well?

 

There's no disputing that Kilar failed to anticipate the overwhelmingly negative reaction he would get from CNN staff. And Kilar has a track record for making what is arguably the right decision, but failing to sell it the right way. Recall his infamous 2011 memo on Hulu and the future of television, which angered Hulu’s owners, and, more recently, his admittedly bungled rollout of HBO Max’s day-and-date shift, which rattled Hollywood. 

 

At the same time, I think Kilar is worthy of some reconsideration here. First of all, this wasn't really his decision. When investigators took their findings about Zucker to Kilar, he had a responsibility to take it to AT&T C.E.O. John Stankey, who in turn had a responsibility to present it to AT&T's board, who in turn had a fiduciary responsibility to their shareholders. And yet it's Kilar, not Stankey, who is out there taking the heat for this decision. And he's taking the heat despite the fact that he had a perilous future at the company. You could argue that there's something almost admirable about what he's doing. He's a company man to the end. Presumably this helps him land his next big job.

 

Moreover, while CNN is in hysterics, Zucker's ouster hasn't interfered with the merger and it hasn't had any material impact on AT&T or Discovery stock. So while he may be the bad guy in the eyes of CNN, he may have at least a few fans in Hollywood and on Wall Street.

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