Wall Street’s Surprising Affection for David Zaslav
It seems like Hollywood isn’t exactly fond of David Zaslav, but on Wall Street, his reputation appears to be improving.
Well, maybe “love” is too strong a word, but there’s been some positive movement. Warner Bros Discovery stock has surged by over 53% in the past year. In contrast, Bob Iger, who’s been receiving accolades for his role in turning Disney around despite a rocky past, has only seen a 27% increase in shares during the same timeframe.
Zaslav, who has had a long tenure in media, made his mark by orchestrating a significant deal that brought AT&T’s Warner Media under his wing in 2022, though he wasn’t initially sure about managing Discovery itself.
This $43 billion transaction included many burdens that dragged down the stock prices previously. Just a year ago, shares were hovering around the $5 mark, but recently they hit $13.17.
Zaslav’s entry into the Hollywood scene was met with skepticism, mainly due to a perceived lack of creativity. His background includes a long stint at NBCUniversal and a foundational role under Jack Welch at General Electric, which shaped his corporate style.
He then took over as CEO of Discovery, which, at the time, was a medium-sized player with popular channels like the Food Network and Animal Planet. These had been losing viewers amidst the rise of cord-cutting. Zaslav managed to ensure profits, primarily through savvy financial maneuvers rather than standout programming.
However, not all his decisions have been stellar. His rebranding of HBO’s streaming service to “Max” left many scratching their heads, and he stirred controversy in Hollywood by canceling projects, causing a rift with creatives.
Given his mixed performance, especially alongside a hefty $52 million salary, defending Zaslav has become a challenge.
Yet, there’s a positive narrative emerging. Investors believe he’s making the most of a $2.6 billion yearly budget by cutting unnecessary projects like “Batgirl” and refraining from overspending on sports rights, unlike some Hollywood peers.
Despite the challenges, Zaslav’s streaming service has managed to turn a profit, which is quite rare for traditional media companies these days. He oversees the streaming operations at HBO Max and Warner Bros. Studios as CEO.
His CFO, Gunnar Widenfels, leads a division that oversees Discovery+ and several cable networks, including CNN and TNT. The strategy is to offload debts to companies with better cash flows while possibly restructuring or selling off studios, often pointing towards future mergers, perhaps with tech giants like Amazon.
Recently, Zaslav’s decisions have defied the doubts of industry cynics. Warner Bros.’ “Superman” was a massive summer hit, while the unexpected success of the film “The Sinner” surprised many. He even decided to dive back into HBO Max, signaling a shift in strategy.
Rich Greenfield, a media analyst at Lightshed Partners, suggests Wall Street is beginning to see Zaslav as a survivor, which could bode well for his shareholders moving forward.
“This business is tough,” Greenfield explains. “David Zaslav’s brilliance lies in his ability to pivot from a stagnant Discovery and orchestrate a merger that revitalized AT&T. The real question is how he will steer Warner Bros. Studios and HBO in this challenging environment.”
