Warner Bros. Discovery’s David Zaslav is a Hollywood’s latest villain, but Wall Street sees him differently

Since he took the helm of the newly merged Warner Bros. Discovery last year, the headlines about CEO David Zaslav have been relentlessly cringeworthy. Watch him being booed through his commencement address at Boston University. Read the toe-curling Atlantic profile of his handpicked CNN leader, whom Zaslav unceremoniously fired amid the meltdown that ensued. Witness the launch of a new streaming app, Max, being roundly mocked in the industry. See Zaslav’s smooth visage become the face of Hollywood fat-cat indifference to the demands of striking Hollywood writers and actors. 

“How many private jets does David Zaslav need?” the progressive congresswoman Alexandria Ocasio-Cortez mused into a bullhorn at a SAG-AFTRA rally in Manhattan this summer. “For real.” (Zaslav’s representatives said he has access to WBD’s corporate jet but does not own one personally.)

But even if Zaslav has won few fans among the rank and file in Hollywood and in media, he’s making the right moves to appease WBD’s shareholders. The painful cost-cutting he has undertaken seems to be working, as WBD steadily pays down the massive debt load it took on in the mega-merger of WarnerMedia and Discovery last year. 

David Zaslav may not be a cinematic visionary. But like it or not, if the century-old Warner Bros. wants to make it to its 200th birthday, it probably needs someone like him. 

Matthew J. Lee—The Boston Globe/Getty Image

A media mogul for this “age of great anxiety”

Of all this year’s public relations snafus, perhaps the most revealing is a relatively low-profile fracas that happened in June. That’s when Warner Bros. Discovery announced that the entire executive leadership team of Turner Classic Movies, which had turned TCM into your favorite director’s favorite channel, was leaving the company. The outcry was swift. Industry bigwigs denounced the move, and the directors Steven Spielberg, Paul Thomas Anderson, and Martin Scorsese met with Zaslav to urge him to save the channel.

TCM is a small but cherished institution within Hollywood. It’s where film buffs can view classics like Casablanca or Gone With the Wind followed by a cult film from the 1960s such as Blow-Up, interspersed with historical commentary from knowledgeable and beloved hosts. As a percentage of WBD’s total operating costs, the channel is small potatoes, a lean operation run by a passionate staff that generates a modest profit. What’s more important is its cultural cachet and symbolic value. As the actor and producer Ryan Reynolds put it in a tweet, “It’s a holy corner of film history—and a living, breathing library for an entire art form. Please don’t fuck with ⁦@tcm.”

About a week after the initial cuts, WBD reversed course, bringing back a longtime TCM executive, with promises from Spielberg, Anderson, and Scorsese to curate content. The chatter died down, but the indelible impression that the whole episode left about Zaslav was simple: This is a guy who, frankly, doesn’t give a damn about movies.

That’s certainly not how Zaslav, who declined to be interviewed for this article, would like to be viewed. In the last couple of years, the 63-year-old has taken on the trappings of a Hollywood movie magnate, buying the former Paramount studio chief Robert Evans’s storied Beverly Hills mansion for $16 million, and sitting at Jack Warner’s desk in his office at the Warner Bros. lot. Even as Hollywood writers walked picket lines back home, Zaslav donned a dapper cream suit and threw a champagne-soaked, star-studded party in Cannes for Warner Bros.’ 100th birthday earlier this year, with New York City media kingmaker Graydon Carter at his elbow. 

Victor Boyko—Getty Images

Ahead of last year’s merger, Zaslav flew under the radar, an executive known mostly for his massive salary (in 2014, at Discovery, he was the country’s most highly paid chief executive). He met his wife, Pam, in high school, and the couple has raised three children together. Zaslav is described by friends as charming and as a devoted family man. 

By his own account, he was an indifferent college student. “I went to Cornell to play tennis and I stayed there for about a year. I did quite well, but I decided it was too much studying and not enough fun,” he told an interviewer in 2004. After transferring and graduating from SUNY Binghamton, he attended law school at Boston University and in 1985 joined the New York firm of LeBoeuf, Lamb, Leiby & MacRae. He soon realized his talents might be better suited to business, and landed at NBCUniversal, where he helped launch CNBC and MSNBC, and built a reputation as a talented dealmaker.  

In the status-obsessed worlds of entertainment and media, industry insiders have dismissed Zaslav as a try-hard: “He’s so caught up in his reputation as a Hollywood mogul, standing at his pool,” one CNN insider said, calling him “a show horse.”

That image, of Zaslav lounging by an elegant art deco pool, was from a Variety profile introducing him as “Hollywood’s new tycoon.” (The pool was at Elizabeth Taylor’s favorite bungalow at the Beverly Hills Hotel.) And like it or not, Zaslav is a Hollywood tycoon, or what passes for one today. As president and CEO of WBD, he oversees Warner Bros. Motion Picture Group, Warner Bros. Pictures Animation, and Warner Bros. Television Group, as well as a collection of some of the most well-known news and entertainment brands in the U.S., including CNN, HBO, Discovery, HGTV, Food Network, OWN, ID, Eurosport, and more. On any given evening, almost one in three cable viewers is watching a network Zaslav oversees, according to the independent media and telecommunications research firm MoffettNathanson.

The Hollywood Zaslav has inherited, however, is not the glamorous dream factory that the original Warner brothers, Jack and Sam Warner, helped build. Cable TV, the cash cow that most of these companies have relied upon for decades, is on its last legs. Streaming has upended the entire entertainment apparatus, and is now experiencing its own implosion. The rise of artificial intelligence looms over the industry, and strikes by the Writers Guild of America and Screen Actors Guild stopped the industry in its tracks for several months (the WGA has reached a deal with the studios and ended its work stoppage, but SAG-AFTRA is still on strike). No one wants to go to the movies anymore.

Zaslav took over Warner Bros. Discovery just as the winds of the streaming model were shifting. Adding subscribers at all costs to compete with Netflix has become less important to Wall Street; now, profitability is what matters. And profits at the largest entertainment companies, including WBD, Paramount, and Disney, have been in freefall over the past decade.

The truth is that all entertainment and media companies are struggling to find their footing in this “age of great anxiety,” as Disney’s Bob Iger has said. And as they consolidate and try to figure out how to make streaming work, they are also competing with the deep-pocketed technology giants Apple and Amazon. (WBD’s market cap sits at $25.13 billion, a small fraction of the $2.83 trillion market cap for Apple and $1.36 trillion for Amazon.)

WBD faces these overlapping crises while still paying off the $55 billion in debt that the company took on in the merger, a downstream effect of the 2018 takeover of Time Warner by AT&T (a disaster of a deal that has been called the worst merger in corporate history).

It’s easy to see why Zaslav, known for gutting TV networks and rebuilding them to his specs, was seen as the cost-cutting and culture-shifting man for the job at WBD. The CEO—who has lately battled writers and actors over the studios’ ability to replace them with AI—made it big during the reality TV boom, another flash point in the ongoing battle over the value of human creative labor. During his 15-year tenure as CEO of Discovery Inc., Zaslav expanded the output of inexpensive unscripted TV, including explosively popular titles such as Dr. Pimple Popper and Naked and Afraid. The content Zaslav helped usher in at Discovery wasn’t glamorous, but it did print money, contributing to the company’s revenue growth, from less than $1 billion when Zaslav took charge to more than $12 billion in 2021.

And Zaslav signaled before AT&T’s deal to spin off WarnerMedia was complete that he would impose a similar regime of austerity at WBD, suggesting that HBO, that temple of prestige TV, had plenty of scripted drama and didn’t need much more. “We plan on being careful and judicious,” Zaslav told investors in February 2022. “Our goal is to compete with the leading streaming services, not to win the spending war.” 

Almost immediately after the deal closed, Zaslav scrapped projects including the nearly-completed Batgirl movie, allowing for significant tax write-offs; abruptly shut down CNN’s $300 million fledgling streaming service, CNN+, weeks after it launched; pulled acclaimed shows including Westworld from HBO’s library; and pursued multiple rounds of layoffs across the company. 

He also led the transition of the streaming app HBO Max to just Max, burying the premium channel’s content within a broader offering that includes Discovery’s vast reality TV library—titles such as MILF Manor and Property Brothers—while jettisoning one of the most well-regarded brands in American entertainment from the app’s name. “The enviable HBO name just turned 50 years old,” a former cable executive tells Fortune. “They tossed it out the door. Mind-boggling… The meaningless new logo would be like Coca-Cola changing their name to ‘brown sugary drink.’” 

Jeff Kravitz—Getty Images/FilmMagic for HBO

For all this fiscal discipline, Zaslav has been handsomely rewarded. In 2021, his widely publicized pay package was worth an astounding $247 million from the merger, including a multiyear grant of options to buy future shares. (Depending on WBD’s stock price, he may not realize that headline figure. His actual compensation in 2021 was around $71 million, according to a Fortune analysis, with a base salary of $3 million.) Fortune ranked him number two on a list of Most Overpaid CEOs in the Fortune 500 for 2022. And his pay has been outsize since his Discovery days. He has pulled in at least eight figures each year going back to 2009.

That has made Zaslav an easy target of the Writers Guild of America and Screen Actors Guild picketers. The optics are this: At a time when workers throughout the industry are struggling to pay bills and worried about A.I. eliminating their jobs, Zaslav is bringing home hundreds of millions of dollars, buying a multi-million dollar mansion, and partying in Cannes.

More love on Wall Street than on Sunset Boulevard

From his first days on the job, Zaslav has approached WBD’s many problems as any private-equity hawk would. And as far as Wall Street is concerned, it’s working: Since the merger, the company has paid down almost $11 billion of its debt. Though the company’s second quarter results fell below Wall Street’s expectations, analysts were optimistic. “Cost controls and cash generation are WBD management’s strong suit,” Wells Fargo analyst Steven Cahall wrote approvingly in a note after WBD’s second-quarter earnings call. 

“He’s a very good businessman,” says Bob Wright, the former chairman and CEO of NBC Universal. Wright gave David Zaslav his first job in media in 1989, when the network was owned by the General Electric of legendary profits-focused CEO Jack Welch. Zaslav, ever a Welchian disciple, still operates with that toolkit. Welch “was analytics and cost,” Zaslav said on a podcast in 2022, “probably more cost than revenue.”

Wright describes Zaslav, who reported to him for 17 years and continues to seek his counsel, as decisive and un-squeamish about doing what must be done, even if that means fundamentally changing a business. “He didn’t make everything he touched turn to gold,” Wright says. “But he tries his best. And the criticism about him is just insignificant against what he’s achieved already.”

Since Zaslav took over, one of his priorities has been to combine the disparate WBD properties into a single company with a united vision. Before, Warner’s siloed divisions were often described as warring fiefdoms. While he is in the drama business, Zaslav has signaled that he would like to keep that kind of drama out of his business, his top lieutenants tell Fortune.

“We’re applying a ‘One Warner Bros. Discovery’ lens to every discussion and decision,” says Gunnar Wiedenfels, WBD’s CFO. Kathleen Finch, chairman and chief content officer of U.S. networks for WBD, argues that Zaslav’s cost-cutting measures have paid off. “There was pain along the way; we had to say goodbye to some good friends,” she says. WBD declined to share how many employees have been laid off since the merger, but it is well into the hundreds. “At the end of the day, we’ve come out on the other side with this really strong, focused company… David led us to the other side.” 

Other studios and streamers have used some of the same tactics: Disney and Hulu have removed shows from their streaming libraries to avoid paying residuals. Several streamers have also carried out layoffs. Bob Iger recently announced that Disney may soon sell off some of its linear TV assets. Netflix has capped its content budget. 

As for killing CNN+ and renaming the HBO app, that’s just good business, some analysts say. HBO is prestigious, but it also has a limited audience. WBD is trying to bundle its brands and attract as many eyeballs—and paying subscribers—as possible. And a stand-alone CNN+ was, put simply, never a particularly promising idea.

Zaslav “is not afraid to challenge the status quo,” says Wiedenfels. “He is not afraid to look at things with a rational mind and challenge and fix what he thinks is broken.” 

“Money makes up for an awful lot of bad feelings”

In Hollywood, these decisions have been met with suspicion and outright hostility. Zaslav simply doesn’t understand the culture of an industry built upon creativity, one that requires making bets based on talent and taste, says the former cable executive. “This is a risk-taking business,” says the executive. “His private-equity approach—cut, cut, cut—and total focus on Wall Street doesn’t go hand in hand with high-quality entertainment.” 

And ultimately, the success of a content company comes down to the quality of the content it can produce. Luckily for Zaslav, his companies have an extensive library of phenomenal content, from Oscar-winning classics like The Departed and Singin’ in the Rain to mega-franchises like Harry Potter and box office behemoths such as this year’s smash Barbie. 

Juan Ocampo—NBAE/Getty Images

If Zaslav can harness the power of the brands he controls and that content library to improve the company’s finances and get the stock price up, any missteps he has made may be forgotten. And as a package, WBD could still draw the interest of a tech company such as Apple or Amazon, that could easily buy WBD and pay down the debt, says Neil Begley, senior vice president for Moody’s Investors Service. Warner Bros. is “a most attractive set of assets. And Discovery is also a very desirable group of assets, especially for those who want to sell advertising,” says Begley, noting that buying WBD could help the tech companies reach more eyeballs and sell more devices: “Combine those two businesses together, you’d think it’d be a terrific formula.”

Zaslav still has an uphill climb ahead before he can declare any kind of victory. Though it has rebounded somewhat, WBD’s stock is still down more than 50% since the merger. He will also need to figure out the company’s strategy related to one of the entertainment industry’s biggest moneymakers (and streaming’s next frontier): live sports coverage. WBD recently announced a sports add-on to Max that will cost an additional $10 per month; the company, along with Disney, currently owns the rights to air NBA games, but Zaslav will need to negotiate hard against streamers and other networks to continue to carry the games past 2025, when the contract expires.

WBD is “a very powerful entity, but if it’s not managed well, it can die on the vine,” says Begley. “They need to build the IP back up, improve the stories, build a streaming platform with scale—that takes years. It’s a constant struggle. You’re trying to appease people with profits while trying to reach scale.”

Begley tells Fortune he would give Zaslav at least six more months to really make his mark at the company, given the long lead time needed to produce movies and television shows, and the fact that WBD can’t change the structure of the company until April 2024 under the rules of a Reverse Morris Trust, which governed the original deal between AT&T and WBD.

And ultimately, if Zaslav’s moves work and Wall Street comes around, so too will the creatives put off by his recent decisions, says Stephen Galloway, dean of the Chapman University Dodge College of Film and Media Arts. 

“Money makes up for an awful lot of bad feelings,” says Galloway. “One or two gigantic hits can turn everything around in the entertainment world.”

The matter of taste

But does Zaslav have the gut instincts or talent-spotting ability to pull off these gigantic hits? Does he even understand the value of the creative talent his company employs?

The striking writers and actors who picketed his studio this summer don’t seem to think so. Adam Conover, a writer and actor who hosted the HBO Max explainer documentary show Adam Ruins Everything, told Fortune while the strike was still ongoing that Zaslav “has made himself one of the biggest villains of the writers strike entirely through his own actions.” Zaslav is seen as someone who has not bothered to learn how to work with the people creating the content his studio and television stations rely on, or how the industry works, Conover says: “If he wants to be a successful billionaire media mogul, he better learn it quickly [or] it’s going to crumble around him.”

This disregard for talent was evident behind the scenes at HBO, too, the former cable executive claims. Some 70 staffers at HBO Max, including a number of executives, were laid off months after the WBD merger. “When you’re buying a successful company, you’re not just buying its products, but also its talented people, those executives who kept the company flying high,” the former executive says. “He doesn’t seem to understand or appreciate that at all.”

Bob Wright disputed this characterization, saying Zaslav “admires creativity” in the WBD talent pool. “You don’t have to be personally creative, you have to be able to recognize creativity,” Wright says. “The type of creativity he has is extremely business-oriented. But that is creativity.”   

As for Zaslav’s personal taste in entertainment or news, his representatives say his favorite films include Exodus, Almost Famous, and All the President’s Men. Finch, who the company arranged for Fortune to interview, says her boss is the “ultimate fan,” whose tastes run the gamut. 

“He watches everything. He talks very passionately about his early love of going to the movie theater as a little kid and getting lost in the storytelling,” Finch tells Fortune. “He really kind of considers the business that he’s in to be a sort of magic, and kind of a tonic for the world’s problems. And he takes that mission very seriously.”

One movie Zaslav has publicly professed his love for: The Flash. A tentpole for the struggling DC Studios division of WBD, The Flash was “the best superhero movie” he’d ever seen, Zaslav declared earlier this year. Critics and audiences didn’t agree, and it ended up being “one of the biggest bombs in studio history,” according to The Wrap, grossing $268 million worldwide on a reported $200 million budget plus marketing costs estimated to be at least nine figures. 

Leon Bennett—Getty Images/WireImage

By describing the film in such superlative terms, Zaslav “put his foot in his mouth,” says Galloway. Most execs wait to see how their content performs before overpromising, Galloway explains: “He’s no longer a network chief, he’s a mogul. He’s a statesman; what he says matters.”

Media matters

In the media world, Zaslav’s decisions and pronouncements have been similarly panned. His oversight of CNN has been tumultuous, to put it mildly. CNN has a new CEO, Mark Thompson, but its staff is still searching for its identity following the abrupt ouster after 13 months of Chris Licht—Zaslav’s mentee, whose tenure was derailed by questionable editorial decisions, plunging ratings, and that excruciating profile in the Atlantic.  

Zaslav appointed Licht, whom he had known for more than a decade, without considering other candidates. It was another example of his lack of familiarity with content production, former media executives tell Fortune. “Zaslav was enamored of Licht; he saw something of himself in him, hyperconfident, transactional, and good at managing up,” says the CNN insider. “It doesn’t say much for his instincts.” 

Licht’s disastrous tenure came to a head after a fractious town hall he insisted upon doing with former President Donald Trump, which drew outrage from the left and derision from Trump himself onstage—who used the opportunity to mug for an audience stacked with his supporters and lob insults at the moderator, CNN anchor Kaitlin Collins. The event was a PR dumpster fire and a turnoff for viewers: Two days after it aired, CNN’s primetime lineup averaged only 335,000 viewers, fewer than Newsmax. 

Four weeks later, and days after the Atlantic profile, Licht was gone, fired just as he was hired, reportedly on a stroll with Zaslav in Central Park. “It’s one of the more embarrassing fiascos of the past few years,” says Galloway.

But even as Licht took the fall, media critics suggested that many of the network’s missteps were attempts to carry out Zaslav’s stated edict to bring more Republicans on the air. It was an effort to win back a more right-leaning and centrist audience from FOX News, which reportedly came at the behest of a longtime Zaslav associate: the billionaire, WBD board member, and prominent libertarian John Malone. Zaslav keeps a photo of himself with Malone in his office in L.A., in pride of place among the family portraits. (A WBD source tells Fortune that Malone has no input into CNN’s editorial content.)

This pointedly centrist strategy has arguably been bad for business, with CNN’s ratings dropping precipitously—and significantly more than those of competitors Fox and MSNBC—during Licht’s reign and after. Among other factors, analysts say, programming decisions made at Zaslav’s behest were a key factor. “The direction has been totally unclear,” says the CNN insider. “You’re steering the boat all over the place.”

Meanwhile, Zaslav’s micromanaging of the network’s coverage has alarmed its editorial team. Similar to the scuttlebutt on him in Hollywood, media insiders whisper that he just doesn’t seem to get how the industry works. 

There’s speculation that the network may be put up for sale. “It seems so problematic, a continuous train wreck that is just taking away management resources from far bigger issues” says Rich Greenfield, managing director and media analyst at BTIG. “If I were them I’d get rid of it sooner rather than later.”

WBD repeatedly told Fortune that CNN is not for sale. And in late August, Zaslav made a safer bet, appointing Thompson to the role of chairman and CEO of CNN Worldwide. He said of Thompson, a former director-general of the BBC and former president and CEO of The New York Times Company, “there isn’t a more experienced, respected or capable executive in the news business today.”  

The PR disasters of recent months suggest that Zaslav is misreading the room on the subject of media coverage too. Though he has been a major player in the entertainment world for more than a decade, his new status as a king of content comes with many times the publicity he used to receive—and much harsher scrutiny. “Who Is David Zaslav and Why Is Everybody Yelling at Him?” Slate asked in May, echoing a question many others are surely asking. 

Zaslav appeared happy to give interviews for coverage like his “Hollywood tycoon” profile in Variety in the early days of the merger. “Zaslav did all this press—it’s a cardinal sin. It’s like the actors taking a bow before the performance,“ says the former cable executive. “When you see someone as tone-deaf as he is, dressed in his fancy suit, with Graydon Carter—it’s eerily reminiscent of Marie Antoinette.”

Now Zaslav’s camp seems to be in damage-control mode. In early July, an article that labeled Zaslav “the most hated man in Hollywood” published on GQ’s website was taken down after his team raised questions about it. The author objected to changes an editor made in response to WBD’s concerns, and requested his name be removed from the piece, which led to GQ pulling it completely. The unpublishing of the article—a rare move for a reputable outlet, typically reserved for only the most egregious journalistic malpractice—became a news story in itself, bringing multiples more attention than it likely would have received had they simply left things alone. It led many to wonder whether Zaslav had heard of the “Streisand effect” (in which efforts to suppress media attention from something only draw more attention to it). 

Barbie to the rescue

Lately Zaslav has taken a more conciliatory tone when talking about those that do the labor of making movies. “Our goal is to tell great stories, stories with the power to entertain and, when we’re at our best, inspire,” he said on the second quarter earnings call. “We cannot do any of that without the entirety of the creative community, the great creative community. Without the writers, directors, editors, producers, actors, the whole below-the-line crew.”

A few weeks after those remarks, Zaslav, along with Iger, Ted Sarandos of Netflix, and Donna Langley of Universal Pictures, negotiated with the WGA to come to an agreement and end the writers strike after more than 20 contentious weeks. (The WGA declined to cast the studio heads as the heroes of the negotiations, telling Fortune “the people who were instrumental in making the deal were the 11,500 members of the Writers Guild of America.”)

Still, with both actors and writers on strike throughout the summer, WBD had pushed back several big-budget titles originally set to be released this fall, including Dune: Part Two, Godzilla x Kong: The New Empire, and Lord of the Rings: The War of the Rohirrim.

Amid all the turmoil, there has been one electric pink lining. Warner Bros. Studios scored a major win with Barbie, the box office smash that surpassed $1 billion in global ticket sales to become the studio’s highest-grossing film of all time. The inescapable pop culture phenomenon is the biggest film of the year and is garnering Oscar buzz for its stars, Margot Robbie and Ryan Gosling. Though it was greenlit well before Zaslav’s tenure, a portion of its success can be attributed to WBD’s ubiquitous marketing campaign, undertaken during his regime.

Christopher Polk—WWD/Getty Images

Begley hopes Zaslav will take a lesson from Barbie: This is a business where if nothing’s ventured, nothing’s gained. “If you’re trying to save money, it runs against the grain of producing good content,” says Begley. “If you throw a lot of money at a lot of things, you’re going to get your share of big things. The bigger your producing pipeline is, the better the chance of big hits.”

There are other lessons here, says Begley. While it’s based on one of America’s most iconic toys, Barbie’s success is a credit to the talent involved: the vision of auteur director Greta Gerwig and her writing and life partner Noah Baumbach, who elevated the story beyond the kid’s movie or product placement vehicle many anticipated, and to the performances of its stars. 

At a time when actors and writers are fighting to keep the studios from supplanting them with AI, Warner Bros.’ biggest hit was a weird and fantastical meditation on what it means to be human, brought to life by hundreds of creatives—from actors and writers to practical effects artists and wardrobe stylists—at the top of their game. “A good story well-told is first and foremost the most important thing they can do,” says Begley. 

Zaslav, at least publicly, seems to agree. And while he may not be a natural-born storyteller, a few more big bets on WBD’s enviable stable of talent could put him on a redemption arc for the ages.