Warner Bros. Discovery is Hollywood’s new heavyweight, but it faces an upstream battle

Bugs Bunny and Guy Fieri just moved in together… They’re Warner Brothers now. Yesterday, WarnerMedia and Discovery finally completed their $43B merger, creating a new Hollywood heavyweight for the streaming era. Longtime Discovery CEO David Zaslav — aka Zaz — will run the new biz, Warner Bros. Discovery.

• Upside: WBD combines classic IP, streaming hits, and cable catnip under one roof (think: “Batman” and “Game of Thrones” and “Shark Week”). It also has 94M subscribers between HBO Max and Discovery+, putting it closer to Disney (130M) and Netflix (222M).
• Downside: WBD has $55B of debt, which could lead to “synergies” (aka layoffs). Several high-profile execs have already been shown the door.

Back to (show) business… WBD is going full Hollywood. Zaz has spent months meeting with Tinseltown’s biggest names to talk strategy. The goal: distance WBD from WarnerMedia’s former parent, AT&T.

• Flashback: AT&T bought WarnerMedia in 2016 and planned to run it like a tech biz. But development stalled during the 20 months it took for the deal to be approved — and all the while Netflix and Amazon poached top talent and churned out content.
• Odd couples: Corporate giants have bought unrelated media businesses before: Coke once owned Columbia Pictures and, more recently, GE owned NBC. Both were eventually offloaded.