Warner Bros. Discovery has once again revised Chief Executive David Zaslav’s contract, marking the second amendment this year as the company prepares for a potential breakup. These changes were detailed in a filing with the Securities and Exchange Commission on Thursday, just one week before the initial bids in the ongoing auction for Warner Bros. Discovery are expected to be submitted.
Industry analysts project that major companies such as Paramount, Comcast, and Netflix are likely to submit offers for the entertainment giant, which encompasses renowned brands including HBO, CNN, Food Network, and the historic Warner Bros. studios. Warner Bros. Discovery has opted not to comment on the unfolding situation.
The auction gained traction in September following an unsolicited bid from Paramount, led by David Ellison, shortly after his acquisition of Paramount from the Redstone family in a significant $8 billion deal. Since then, Paramount has made multiple bids for Warner Bros. Discovery, all of which the Warner Bros. Discovery board deemed insufficient. The most recent offer from Paramount stood at $23.50 per share, estimating the overall value of the company at approximately $58 billion.
The competitive interest in Warner Bros. Discovery has prompted revisions to Zaslav’s employment agreement. The latest modifications, finalized on November 7, aim to ensure that Zaslav receives the same incentives regardless of how various potential spin-off configurations unfold. His earlier contract amendment previously laid down the terms regarding his compensation and incentives, specifically concerning the anticipated separation of the Warner Bros. studios and HBO Max from the parent company, a strategy first announced in June.
Warner Bros. Discovery’s upcoming restructuring plans now center around retaining its core studios, HBO, and the HBO Max streaming service while spinning off Discovery Global, which includes around two dozen cable networks such as CNN and TNT. This shift reflects an adjustment in approach; the filing indicated that Zaslav’s arrangements will remain consistent if this ‘Reverse Spinoff’ occurs rather than the original planned separation.
Originally, Warner Bros. Discovery aimed for the split to be finalized by December 31, 2026. However, the auction process could potentially delay this timeline. Zaslav’s contract has also been extended through December 2030, up from its previous expiration date of December 2027, to ensure his leadership remains intact during this transitional phase.
The Wall Street Journal recently reported that preliminary bids for Warner Bros. Discovery are due by November 20, a development that underscores the ongoing evolution within the entertainment landscape. Meanwhile, the prospect of new leadership and strategic realignment offers a sense of optimism about the future trajectory of Warner Bros. Discovery amidst a rapidly changing media environment.