WBD employees fear coming wave of job losses as Paramount tops Netflix’s bid to acquire company

The Warner Bros. Discovery board might have enriched its shareholders Thursday when it selected Paramount Skydance‘s acquisition supply over Netflix‘s, nevertheless it additionally terrified lots of its employees.

Whereas some of these folks personal WBD shares and should want the financials of Paramount’s $31-per-share bid to Netflix’s $27.75-per-share supply, CNBC spoke to 10 WBD employees in a range of completely different roles on the company. All 10, who requested not to be named for fear of potential backlash, expressed issues about potential job losses and questions of who would finally run their divisions if Paramount and WBD are ultimately merged.

“It is honest to say persons are deflated by the information,” mentioned one long-term WBD govt.

Nonetheless, a WBD-Paramount merger “is just not a executed deal,” as California Lawyer Basic Rob Bonta mentioned yesterday.

The transaction should acquire regulatory approval each within the U.S. and in Europe. WBD CEO David Zaslav acknowledged at an all-hands assembly Friday that the deal should still be blocked and expressed sympathy for these experiencing a way of whiplash going from Netflix to Paramount, in accordance to folks conversant in the matter.

“The deal might not shut. If it would not shut, we get $7 billion, and we get again to work,” Zaslav mentioned, in accordance to leaked audio supplied to Enterprise Insider.

Nonetheless, a number of WBD employees instructed CNBC they wished Netflix had acquired WBD, citing a number of elements.

Whereas Paramount and WBD each have core competencies in information, sports activities, theatrical movie and streaming TV, Netflix has far much less overlap. Netflix co-CEO Ted Sarandos repeatedly mentioned he deliberate to depart the WBD enterprise alone, protecting its theatrical enterprise separate from Netflix whereas additionally protecting HBO Max as a separate, impartial streaming service for the foreseeable future.

Netflix additionally wasn’t buying WBD’s linear cable enterprise with its bid. Employees at CNN, TNT Sports activities and the previous Discovery networks would have remained of their jobs to forge a path as a standalone publicly traded company.

Now, WBD employees are watching doubtlessly large job cuts. Paramount executives have beforehand acknowledged they plan to lower $6 billion by eliminating “duplicative operations” on “again workplace, finance, company, authorized, expertise, infrastructure, et cetera,” in accordance to Chief Technique Officer Andy Gordon. Each WBD and Paramount have already gone by way of hundreds of job cuts lately.

There are additionally questions on tradition and management. Whereas Mark Thompson at the moment runs CNN, Bari Weiss is the editor-in-chief at CBS Information and will plausibly have CNN added to her purview.

The Wall Road Journal reported in December that Paramount CEO David Ellison promised President Donald Trump he’d make sweeping adjustments at CNN if he gained management of the community. Three CNN employees who spoke with CNBC mentioned there’s rampant fear amongst their colleagues about Weiss making dramatic adjustments to the cable community’s anchors and tone.

“Regardless of all of the hypothesis you’ve got learn throughout this course of, I might recommend that you do not leap to conclusions concerning the future till we all know extra,” Thompson wrote in a memo to employees Thursday.

CNN media reporter Brian Stelter famous CNN “is a extremely worthwhile enterprise, and it could be silly for any proprietor to put that in danger.”

On the leisure aspect, WBD employees fear there could also be too many proverbial cooks within the kitchen, which might lavatory down creativity and innovation for each movie and TV.

One WBD govt famous that Paramount’s President Jeff Shell, Chair of Direct to Client Cindy Holland and Chair of TV George Cheeks are all used to being senior leaders of their organizations. Shell was CEO of NBCUniversal. Cheeks was co-CEO of Paramount earlier than it merged with Skydance. Holland was a high govt at Netflix, the place she labored for 18 years.

How that blend meshes with WBD’s leisure management group is an open query and may lead to tradition clashes.

TNT Sports activities is run by Luis Silberwasser and has largely steered WBD towards youthful audiences with its programming choices and investments, together with Bleacher Report and Home of Highlights. CBS Sports activities, in the meantime, is pushed by the demographics of those that watch CBS and has traditionally catered to an older viewers. This might lead to tradition conflict, or the divisions might mesh properly as complementary property.

Whereas Silberwasser could have to work with CBS Sports activities President David Berson on worker duplications, like each different division, there’s some cause for optimism within the sports activities division, as a result of WBD and CBS have labored collectively for a few years producing March Insanity, the NCAA males’s basketball event. That is given the items some extent of familiarity with one another.

WBD additionally misplaced NBA rights final season. Combining with CBS’ sturdy portfolio of sports activities rights, together with the NFL and the Masters, makes WBD a significant participant once more in sports activities, even when it is as a subsidiary of CBS.

One different repeated concern amongst employees is the $64 billion in debt coming as half of the $111 billion enterprise worth for the deal. A number of employees mentioned servicing massive debt masses has hindered WBD lately, they usually feared this might lead to extra of the identical. Two employees famous there’s consolation being a component of a large company like Netflix, with a market capitalization of greater than $400 billion. Paramount Skydance’s market valuation is simply $15 billion.