Warner Bros. Discovery CEO David Zaslav says staffers are working “extremely hard” and staying focused despite uncertainty about the fate of the company’s pending merger with Paramount.
Speaking to Wall Street analysts on the company’s second-quarter earnings call, Zaslav said he had assumed “it was going to be quite challenging” for employees to tune out the noise and maintain morale. But during visits in recent weeks to various European offices, Zaslav, said, he was struck by the “work ethic” he encountered.
“The overall culture of this company and the work ethic of the company has been inspiring,” Zaslav said. “The focus has been that this is a great company, and that how do we take advantage of every day we’re here and try and focus on the best performance possible, but also this idea of, what stories will we tell?”
Announced in February, the $110 billion merger drew lawsuits last month from attorneys general of 12 states as well as the Writers Guild of America. The suits contend the transaction violates antitrust laws, with the WGA also arguing it will harm entertainment workers. A judge this week set a March trial date, leaving both companies to soldier on in the meantime, barring an out-of-court settlement.
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“We’ve been trying to drive the value of the company to deliver to PSKY and to [CEO David Ellison] the best company possible,” Zaslav replied when asked about the potential scenario of the deal falling apart and WBD resuming its prior plan to split into two companies. “The company is performing at a very high level. And we have every expectation that the transaction will close, and that the company will be performing even better than the plan that we presented to PSKY when we did our deal.”
Prior to his comments, WBD reported lackluster results for the second quarter, with revenue sandbagged by summer movie flop Supergirl and the lack of NBA telecasts.
If the Paramount deal does end up being completed, it will give Warner its fourth corporate owner in the past decade. Successive acquisitions by AT&T and Discovery Communications have not been fruitful despite the company controlling prestige assets like Warner Bros., HBO and CNN.
Recent media reports have indicated that executives at WBD, as is often the case at companies about to be acquired, are exploring their career options rather than waiting and taking their chances with new management. In what many observers considered a warning shot, the company last month sued Amazon for allegedly poaching HBO marketing executive Pia Barlow. The lawsuit accused the tech giant of “hurriedly seeking to pirate away a number of contracted employees” from WBD.
“It has been challenging, and our focus has been, how do we drive a stronger company, meet and exceed our business plan, and deliver a stronger and higher-growth company, to PSKY and David,” Zaslav said on the earnings call. He added that he was impressed by “the way this company is performing, and you look at the close to 40,000 people coming in every day.”
It is “unusual,” Zaslav continued, for energy levels to sustain during a period of corporate tumult. “We’re lucky, and I think that we have an unusual set of employees that really love these assets. As long as we’re here, we’re gonna be working hard every day.”
