David Zaslav is set to earn a substantial amount from the merger of Paramount Skydance and Warner Bros Discovery, and it turns out many others working under him will also benefit significantly.
His hefty compensation as the CEO of Warner Bros. Discovery sparked criticism within Hollywood. Despite the company struggling initially under his leadership, he was awarded millions. However, it’s important to note that most of this came from stock options, with shares initially priced at $7 and exercisable at $10.
Now, with the merger finalized at $31 per share—valuing the company at $81 billion—Zaslav is expected to walk away with roughly $1 billion. Yet, it’s crucial to mention that the benefits of this successful deal have extended beyond just the top executives, which is often the case in such mergers.
For instance, around a dozen of his employees will leave the company with at least $40 million each, some even more. This can be attributed to his advocacy for a culture of ownership during his four years at the helm. Nearly two-thirds of the 30,000 staff elected to take shares as part of their compensation when the stock price was low.
Reports indicate that about 500 employees now have more than $1 million each thanks to the deal. Meanwhile, around 1,000 employees received appreciated stock valued at $500,000 each.
The left-leaning Hollywood circles and their supporters might frame Zaslav’s billionaire status in a negative light. However, they often overlook the financial gains of assistants and other lower-tier employees, which demonstrates that, at least sometimes, mergers and acquisitions can significantly benefit those at the bottom of the ladder as well.
What’s sometimes ignored in capitalism is the inherent uncertainty of success. Warner Bros Discovery’s journey has been treacherous, and Zaslav officially took over in 2022 after merging Discovery Inc.—famous for its Food Network and a few niche channels—with Warner Media, which includes HBO and CNN, after AT&T divested from it.
Warner has been through numerous ownership changes over the years, despite having strong brands, because management struggles to make the numbers add up.
Even the telecom executives faced challenges similar to those of their media counterparts, and Zaslav initially took a lot of heat in Hollywood for decisions like not overpaying for NBA rights and scrapping “Batgirl” during post-production, alongside the whole HBO Max branding crisis. This contributed to the company’s stock price remaining low.
However, behind the scenes, Zaslav was implementing cost-cutting measures and focusing on enhancing content quality. He has found a way to make HBO Max more profitable.
From what I’ve gathered, we were among the first to realize that Zaslav’s strategies were paying dividends. Last August, before the bidding war for WBD kicked off, we noted a more than 53% increase in Warner Bros Discovery stock over the previous year.
The studio started producing hits and enjoying commercial success. Zaslav planned to separate the company, unbundling its valuable studio and streaming operations from its slower-growing yet profitable cable assets. This strategy would allow him to manage debt better while potentially selling or rebuilding the studio, as I reported at the time.
Six weeks later, interested buyers, led by David Ellison from Paramount Skydance, his father Larry Ellison, and the clever team at RedBird Capital, stepped up with an offer of $16 per share.
We broke the news that Zaslav was aiming for around $30 per share. At first, the media scoffed at this ambition—until he sparked a competitive bidding war between major media companies, ultimately leading to a showdown with Netflix. Suddenly, that $30 per share figure didn’t seem so outrageous. Ellison and his group raised their offer to $31 per share, pushing Netflix out and securing the win back in February.
However, the path to this week’s completion was not straightforward. Regulatory challenges over questionable antitrust issues delayed the deal until a more reasonable perspective prevailed.
Throughout this process, one constant was Zaslav’s confidence in the deal’s eventual approval. Yes, it has made him a billionaire, but it has also enriched many of his employees.
So, it’s worth remembering not to take everything you hear about this deal at face value, whether it’s from a Hollywood celebrity or a political figure from California. There are positive aspects too.
