Discovery Chief David Zaslav: “We’re Seeing Green Lights” From D.C. On WarnerMedia Deal; Big-Screen Movie Business “Not Going Away”

Discovery CEO David Zaslav delivered another fusillade of optimism surrounding the company’s pending merger with WarnerMedia during a conference call with Wall Street analysts.

The companies announced the $43 billion deal in May, and management teams at both companies continue to estimate it will gain regulatory approval by next summer.

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“We are focused on one thing and one thing only,” Zaslav said, referring to getting the deal done. He reaffirmed the mid-2022 outlook for approval, saying he had been in Washington last week for unspecified meetings. “We have broad support for this transaction,” he said. “We haven’t heard any pushback. … Right now, it feels to us on every level, we’re seeing green lights, we’re not seeing any yellow lights or red lights. Having said that, we’re not in control of the timing.”

WarnerMedia launched HBO Max in May 2020 and in June of this year added a cheaper, ad-supported tier and also started expanding internationally. Discovery launched Discovery+, its flagship service, in January and it is the centerpiece of the company’s 18 million direct-to-consumer subscribers. HBO Max, when combined with HBO, is at 44.5 million. (Netflix continues to set the pace, with 209 million global subscribers.) It is not yet clear how the combined company will attack streaming, though most observers expect some form of bundle to take shape, given Disney’s positive results from bundling its own services.

“Right now, we’re both accelerating,” Zaslav said, name-checking AT&T CEO John Stankey and several WarnerMedia execs. “They’re driving hard, we’re driving hard and then we’ll both true up together.”

The current wave of consolidation, which has seen Amazon set a deal to buy MGM and private equity firms take stakes in a range of content companies, proves the value of intellectual property, Zaslav said. “People need more IP,” he continued. “Over the next couple of years, more and more people are going to look and raise their hand. There will be more consolidation, more IP libraries sold, because you need a lot of content to be successful.”

The CEO declined to comment on reports the company was considering making a play for Channel 4 in the UK.

Zaslav’s comments came after the company reported better-than-expected results in the second quarter, as advertising rebounded and streaming continued to grow.

The projected CEO of Warner Bros Discovery included a paean to the big-screen motion picture business as part of his pitch for the combined company. “The motion picture business is not going away,” Zaslav said. “It’s the top of the patina. It’s why the greatest writers, producers and creative talent came. When you look up at that big screen, that’s where stars are made and where the magic happens.” He said the movie business would be “at the very top” of the merged entity.

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