WBD employees fear job losses with Paramount merger

Warner Bros. Discovery The board may have enriched its shareholders with its election Thursday Paramount Skydancepurchase offer ended netflixbut it also frightened many of his employees.

While some of these people own WBD shares and may prefer Paramount’s $31-per-share offer to Netflix’s $27.75-per-share offer, CNBC spoke with 10 WBD employees in a variety of different roles at the company. All 10 people, who asked to remain anonymous for fear of potential backlash, expressed concerns about possible job losses and questions about who would run their divisions if Paramount and WBD eventually merge.

“It’s fair to say people are demoralized by the news,” said one long-term WBD executive.

However, the WBD-Paramount merger is “not a done deal,” according to the California Attorney General Rob Bonta he said yesterday.

The transaction requires regulatory approval in both the US and Europe. WBD CEO David Zaslav acknowledged at a general meeting on Friday that the deal could still be blocked and expressed sympathy for those feeling the whiplash of the move from Netflix to Paramount, according to people familiar with the matter.

“The deal may not be completed. If it is not closed, we will get 7 billion dollars and go back to business,” Zaslav said. leaked audio It was provided to Business Insider.

Still, several WBD employees told CNBC they wish Netflix would acquire WBD, citing several factors.

While Paramount and WBD both have core competencies in news, sports, theatrical film and streaming TV, Netflix has much less overlap. Netflix co-CEO Ted Sarandos has repeatedly said he plans to leave the WBD business alone, keep the theater business separate from Netflix, and also keep HBO Max as a separate, standalone streaming service for the foreseeable future.

Netflix was also not acquiring WBD’s linear cable business with its offer. Employees at CNN, TNT Sports and the former Discovery networks would keep their jobs to make way for an independent, publicly traded company.

Now, WBD employees face potentially major layoffs. Paramount executives previously said “recurring transactions“On “back office, finance, corporate, legal, technology, infrastructure, etc.,” according to Chief Strategy Officer Andy Gordon. Both WBD and Paramount have already experienced thousands of layoffs in recent years.

There are also questions about culture and leadership. Mark Thompson currently runs CNN, while Bari Weiss is editor-in-chief of CBS News and could conceivably add CNN to her purview.

Wall StreetJournal reported in December Paramount CEO David Ellison has promised President Donald Trump that he will make sweeping changes at CNN if he gains control of the network. Three CNN employees who spoke to CNBC said there was widespread fear among their colleagues that Weiss would make dramatic changes to the cable network’s anchors and tone of voice.

“Despite all the speculation you’ve read along the way, I would suggest you don’t jump to conclusions about the future until we know more,” Thompson said. wrote in a note To employees on Thursday.

CNN media correspondent Brian Stelter noted CNN “is a highly profitable business, and any owner would be foolish to risk it.”

On the entertainment side, WBD staff fear there may be too many celebrity chefs in the kitchen, which could bog down creativity and innovation for both film and TV.

A WBD executive noted that Paramount President Jeff Shell, Direct-to-Consumer Chairman Cindy Holland and TV President George Cheeks are accustomed to being senior leaders within their respective organizations. Shell was the CEO of NBCUniversal. Cheeks was co-CEO of Paramount before its merger with Skydance. Holland was a senior executive at Netflix, where he worked for 18 years.

How this mix fits into WBD’s entertainment leadership group is an open question and could lead to culture clashes.

TNT Sports is run by Luis Silberwasser and has largely directed WBD towards younger audiences through programming decisions and investments, including Bleacher Report and House of Highlights. CBS Sports, meanwhile, caters to the demographics of CBS viewers and has historically appealed to an older audience. This can lead to a culture clash, or the departments can mesh beautifully as complementary entities.

While Silberwasser will have to work with CBS Sports President David Berson on employee duplication like every other department, there is some reason for optimism in the sports department because WBD and CBS have worked together for many years in the production of March Madness, the NCAA men’s basketball tournament. This ensures that the units have some degree of familiarity with each other.

WBD lost its NBA rights last season as well. Combined with CBS’ strong portfolio of sports rights, including the NFL and the Masters, WBD becomes a major player in sports again, even though it is a subsidiary of CBS.

Another recurring concern among employees is the $64 billion in debt that comes as part of the deal’s $111 billion enterprise value. Several employees said paying off large debt loads had hindered WBD in recent years and they feared it could lead to more. Two employees stated that there is comfort in being part of a giant company like Netflix, which has a market value of over $400 billion. Paramount Skydance’s market cap is only $15 billion.