The Warner Bros. Discovery share price popped a bit this week, did you notice? Don’t get too excited. WBD is hardly catching up to Netflix, which has shot up from less than $300 to more than $400 per share this year. But for a company whose stock started the year at $9.50 per share, way down from the $24 and change where it was trading in April 2022, when David Zaslav took over as C.E.O. of the spun-off and combined company, a little 7 percent uptick today, to $14, isn’t nothing.
You might suspect that the market was reacting favorably to Zaslav finally euthanizing Chris Licht, his hand-picked steward of the newly apolitical and a-popular CNN. Licht’s slow-then-all-at-once implosion after 13 months, and one historically damaging magazine profile (see below), have been the talk of New York and L.A. And I get it, it’s kinda the perfect story, combining media, politics, business, celebrity, money, hubris, schadenfreude, 6 a.m. workout sessions, and Donald Trump. Pretty irresistible, and my Puck colleague Dylan Byers has owned the Licht beat, so add his private email In the Room to your media mix if you haven’t already.
Yet… despite the comical amount of media coverage devoted to the CNN meltdown, the unit represents only about 5 percent of WBD’s overall business. And the average viewership of these CNN shows is minuscule, about 473,000 viewers in primetime in March, per Nielsen. Cable news in general isn’t much better. In fact, the stock actually popped this week because WBD said in a decidedly less sexy regulatory filing that the company had repaid about $1.5 billion in debt on two loans. Per CNBC, WBD now plans a $500 million offer to purchase floating rate notes, the slice of its massive remaining $45 billion-or-so debt that carries a high interest rate.
That’s $2 billion in debt reduction this past quarter, about double what analysts had forecast, hence the stock bounce. Not that anyone noticed. Before Zaslav took over WBD, his friend Brian Roberts, C.E.O. of NBC News owner Comcast, warned him that the news division would suck up far more oxygen than its business might suggest. This week, Zaslav saw again what Roberts meant.
I’m not suggesting the CNN debacle isn’t a big deal—the value destruction of such a high-profile asset, with profit down to about $750 million from more than $1 billion, is pretty stunning. Especially since that value destruction has been strategic. Licht, after all, has been executing the down-the-middle content strategy that Zaslav hired him to execute, and Zaz has basically said he doesn’t care if revenue declines. MediaRadar, the ad firm, said today that CNN saw a nearly 40 percent drop in advertising revenue through the first four months of 2023 compared to the same period last year, before Licht took over. That’s partly the result of the macro ad market, of course, but it’s also because CNN purposely became a product that nobody cared about. In media, that’s bad, no matter how many costs you cut or how much debt you service.
“Full Responsibility”
Still, Zaslav and the company have bigger problems, namely the worsening decline of the linear TV ecosystem in which CNN and the other Turner networks operate; the upside-down streaming business that The Service We All Still Call HBO Max is competing in; the uncertainties in movies; and perhaps most alarming, of course, that crushing debt. So it’s hard to care too much about this CNN situation. It becomes mostly instructive as yet another example of Zaslav exhibiting either poor or seemingly naive judgment.
To his credit, Zaz told the CNN staff yesterday that he “takes full responsibility” for the Licht debacle. What’s weird, and I guess predictable for a guy who has spent years at the lower-profile Discovery managing non-news assets, is he didn’t seem to get that CNN is a global news business and a complicated corporate entity, something that might require skills beyond a career television producer. Remember, he hired Licht without interviewing anyone else. Just like he didn’t realize the outsized blowback he’d get among fans and the media for scrapping a nearly-complete Batgirl movie for a tax credit. Or that throwing a lavish Cannes party and posing in front of a bottle of Dom might not be a great look during a crippling writers strike.
Just this week, when reviews of Warners’ The Flash hit, some of them noted that the film is good—definitely better than the average comic book effort—but certainly not the “best superhero movie” that Zaz and new DC co-chief James Gunn claimed it to be a couple months ago. Of course it isn’t. But they unnecessarily set expectations so high that now we’re talking about how the film doesn’t live up, not that it’s a pretty good movie. That feels like an unforced error, and The Flash tracking hasn’t moved much off an underwhelming $70 million lately. That’s Black Adam territory.
At Discovery, Zaslav operated with a lot of autonomy, thanks to his champion, the board member and early cable pioneer John Malone. He could squeeze talent or make a bad hire to do his bidding without people freaking out. Now, Zaz is in the media hot seat, running super-high profile assets with talent that can and will revolt when unpopular managers like Licht are put in place. It’s movie stars, but it’s also news personalities. The Journal reported on Tuesday, based on blind sourcing, that Anderson Cooper, Jake Tapper and Erin Burnett had all complained to management about Licht. At that point, he was gone, whether Zaz believed in him or not.
The Worst Media Profiles in History
Throughout his own career, Zaslav has pretty meticulously curated his own personal press. Never more so than when he got the WBD job and the nine-figure compensation package that came with it. Remember that glowing Vanity Fair spread? The breathless updates on his power sit-downs at the Polo Lounge? It was all so much that Licht—himself very chummy with the media, which until CNN, had always treated him with kid gloves—might be forgiven for thinking The Atlantic piece was a good idea. And certainly the now-fired CNN P.R. team did him no favors.
So, where does the Licht flameout rank among Hollywood executives who self-immolated via personal magazine profiles? Here’s my ranking:
5. Jamie Tarses, ABC (1997) — At 32, Tarses became the first woman to run a “Big 4” network. But Jamie Tarses’ Fall, As Scheduled by Lynn Hirschberg, in The New York Times Magazine, soon solidified the town’s suspicions of her as erratic and opportunistic. (Reading it today, it’s also super-misogynistic. An anonymous agent: “This may sound sexist, but women are emotional and Jamie is particularly emotional. You think of her as a girl, and it changes how you do business with her.” Yeah… The New York Times Magazine printed that.) Tarses’ big mistake was letting Hirschberg listen in on her calls with then-ABC chairman Bob Iger, which understandably pissed him off. She lasted until 1999 despite near-constant rumors that she was out.
4. Ben Silverman, NBC (2007) — This one’s near and dear to my heart because I wrote the Esquire profile, It’s Ten O’Clock. Do You Know Where Your Network President Is?, in which Silverman, then the 36-year-old Biggest Loser producer turned NBC Entertainment president, referred to his rival network chiefs Kevin Reilly and Steve McPherson as “D-girls” (look it up), called McPherson a “moron” and a “sad man” who was jealous of his youth and success, admitted to trashing a colleague’s office on a booze bender, and boasted about inviting NBC talent to a “sick” Emmy party featuring a caged white tiger. Silverman lasted more than a year after the piece (today he’d be gone in a day), but he never shook the jackass party-boy image, and NBCU C.E.O. Jeff Zucker finally fired him in 2009.
3. Peter Bart, Variety (2001) —The then-Variety editor’s participation in a long Los Angeles profile by Amy Wallace, Is Peter Bart the Most Hated Man in Hollywood?, which noted that he made racist and sexist comments, led not to his firing—again, he’d be gone today—but he did suffer a three-week suspension. He reigned for eight more years but never had quite the juice that he did before the piece ran.
2. Dave Wirtschafter, William Morris Agency (2005) — The talent agency president allowed himself to be the subject of a 11,000-word New Yorker profile, Secret Agent Man, and was quickly fired by Sarah Michelle Gellar for saying the Buffy star was “nothing at all” before The Grudge. Halle Berry followed Gellar out the door because Witschafter said her career needed “burnishing” after Catwoman bombed. (Harsh assessments, but in hindsight, he wasn’t wrong.) If Wirtschafter—still with WME—has done another piece of personal press in the nearly two decades since, I’ve missed it.
1. Michael Ovitz, Artists Management Group, 2002 — The infamous “gay mafia” article has gotta top this list, right? Ovitz, the CAA co-founder who was already fired from a short stint at Disney after a tough piece on his leadership by Bryan Burrough and Kim Masters at Vanity Fair, agreed for some reason to sit down with Burrough after the failure of his comeback vehicle, the management-production firm AMG. The result was a master class in on-the-record victimhood, including the now-legendary claim that the “gay mafia,” which he said included David Geffen, his former proteges at CAA, and The New York Times (?), conspired to take him out. Ovitz was already down, but this piece assured that he was out of Hollywood for good. Pro tip: To this day, if you see Ovitz, don’t mention it.
Now we can add Chris Licht to this list. Four of the aforementioned people found their way back in Hollywood, and Ovitz reinvented himself as a tech investor and art collector. I’m betting that Licht will bounce back, too. His boast to The Atlantic’s Tim Alberta during his morning workout that “Zucker couldn’t do this shit” has already become iconic, and an early frontrunner for quote of the year. But those who think Licht won’t stage a comeback either have never met him or are overreacting to his transgressions. This isn’t a #MeToo situation; no crimes were committed. Licht was offered a great job that he ended up not being the right fit for. It happens, and everyone in the media will be salivating to write about his return.
The problem for Zaslav, as he tries to pull off a high-wire act with Warner Bros. Discovery, is that if more Licht-like situations happen, people will start asking whether he’s the right fit for his job.
