I got this uncomfortable feeling of deja vu when the much anticipated news of yet another cosmetic divide of a struggling media company came down early yesterday morning. Here’s how CNN’s Brian Stelter reported it:
Warner Bros. Discovery is splitting into two separate publicly traded companies – one oriented around the HBO Max streaming service and Warner Bros. studio, and the other around CNN and other television networks. The first company, known for now as “Streaming & Studios,” will be led by CEO David Zaslav, and the second company, “Global Networks,” will be led by CFO Gunnar Wiedenfels. “The separation aims to provide each company with greater strategic flexibility and focus,” the company said in a statement.
You should forgive Stelter if his otherwise more detailed and entertaining reporting style seemed to be missing. He’s likely feeling what I felt when it was clear the money guy was going to be spending more time with “the team”, and given his areas of expertise it’s all the more likely said money guy will be picking his brain as was the case when I realized the fun days at the office were going to be fewer and farther between.
When Tony Vinciquerra replaced Jeff Shell as the FOX executive in charge of our networks, he requested that his executives give his CFO some face time so he could better “learn the business”. Personality-wise, Tony’s about as far removed from Jeff as any two executives I’ve known are–for one thing, at the time Jeff actually had one. Tony’s CFO, a cherubic and affable older accounting lifer named “Del”, began to attend our weekly staff meetings, sticking out like a sore thumb amidst the mostly younger and more flamboyant team we had in place. Since I was closer to his age and ultimately responsible for the kind of info that CFO types live off of, I was tasked with the onus of being his consigliere.
When our spirited meetings would end Del would follow me back to my office while the rest of the team went about their days, meeting with talent, press and each other while I would painstakingly answer Del’s earnest but clearly naive questions about some of the details he had just heard about. He seemed particularly eager to learn about creative decisions and even confessed that he wasn’t getting sufficient direction from my colleagues. I’d be lying if I said I enjoyed these sessions.
Judging by how VARIETY’s Todd Spangler described Wiedenfels in his piece from yesterday, I suspect Stelter and some of the few that remain with my sort of responsibilities are having similar pangs this morning:
As CFO at Warner Bros. Discovery, Wiedenfels has been the face of the cost-cutting that has ensued since David Zaslav and the Discovery gang took the reins of the merged Discovery-WarnerMedia in Burbank in April 2022. Wiedenfels, 47, is a native of Germany who studied business informatics at the University of Mannheim and received a PhD from RWTH Aachen University. He started his career at McKinsey & Co. in Hamburg in 2004. In 2009, he joined ProSiebenSat.1 Media SE in Munich, where he spent nearly eight years in executive management roles including as CFO. As such, Wiedenfels often been the focus of frustration among employees in his role as the instigator of belt-tightening and other massive changes including a series of layoffs.
Sounds like the life of any party to me.
But given the goals that his partner in gunslinging has tasked him with, he’s clearly well-suited for it. As THE HOLLYWOOD REPORTER’s Georg Szalai detailed yesterday:
The Streaming & Studios company will consist of Warner Bros. Television, Warner Bros. Motion Picture Group, DC Studios, HBO, and HBO Max, as well as their legendary film and television libraries. Global Networks will include premier entertainment, sports and news television brands around the world including CNN, TNT Sports in the U.S., and Discovery, top free-to-air channels across Europe, and digital products such as the profitable Discovery+ streaming service and Bleacher Report (B/R). “This separation will invigorate each company by enabling them to leverage their strengths and specific financial profiles. This will also allow each company to pursue important investment opportunities and drive shareholder value,” said Wiedenfels. “At Global Networks, we will focus on further identifying innovative ways to work with distribution partners to create value for both linear and streaming viewers globally while maximizing our network assets and driving free cash flow.”
Reading between the lines: The cool kids get to still hang with Yosemite Zas, while the rest will be helping his deputy squeeze every last farthing out of the businesses that even in decline still produce actual revenue. A point that Spangler drove home in his write-up:
(T)he compensation committee of WBD’s board of directors praised Wiedenfels’ cost-reduction prowess in explaining why the CFO deserved a $4.8 million cash bonus for 2024. The exec “[d]elivered $1.8 billion in costs savings and integration synergies in 2024 while developing a pipeline for additional synergy capture in future years,” the committee said, per the company’s most recent proxy statement.
Considering Zaslav’s 2024 compensation package was just given a thumbs down by the same committee, I suppose one could contend that he’s being seen in a somewhat better light. And those are some pretty impressive call letters in his arsenal.
But while Zaslav has at least attempted to embrace and emulate the style and legacy of a real Hollywood mogul, Wiedenfels has been a background player and a hit man, raised in a country and a culture about as removed from that world as my ol’ pal Del was. (To be fair, Del wasn’t German, but the heartland of America has a similar climate, and both gents could stand to spend a little more time in the sun).
So I really do feel for those who will now be beholden to Wiedenfels. If the playbook that Comcast is utilizing with their similar stock price-induced spin-off Versant is any indication, these legacy brands will be expected to do a lot more with less, relying almost exclusively on lower-cost unscripted fare to maintain some semblance of originality if for no other reason than to satisfy clauses in deals with MVPDs that require it. Fewer shows, fewer episodes. A lot more creative use of library content. Plenty of stunts to appeal to would-be advertisers. And oh, BTW, a lot fewer people to delegate those responsibilities to.
Discovery practically invented the concept of the zombie network with the spin-offs of their motherships that took full advantage of the expanded shelf space that digital cable and satellite offered. Shows that debuted on core brands such as Discovery and TLC would be endlessly rerun on niche outlets like the Travel Channel, The Science Channel and Motor Trend. A similar pattern with the one-time Scripps networks exists when HGTV originals show up on Magnolia and Food Network content on The Cooking Channel. It’s not hard to imagine what’s left of the Turner networks will become similar regurgitation outposts for HBO Max content.
And if one needs any support for such a dour outlook, keep in mind Channing Dungey, who was given stewardship of many of the Global Networksl less a year ago on top of her responsibilities heading up Warner Brothers TV, will be staying with Zaslav. Alas, Chan, we hardly knew ye. All of those money-making hits you developed for TNT and TBS during you tenure will have to soldier on without you. Those LIBRARIANS marathons will be testimony to your efforts.
But Channing has at least been designated as one of the cool kids, and I guess there’s something to be said for that. She gets to pal around with Yosemite Zas. Her underlings will now have to bring Droop-A-Long up to speed.
If any of you need any advice, I’m here to help. Somewhere in a storage unit I’ve got my notes from my meetings with Del.
Until next time…