Employees at WarnerMedia, and especially at DC Comics and Cartoon Network, may want to keep their resumes handy and updated, as they might be out of a job following their parent company’s upcoming merger with Discovery.
Discovery CFO Gunnar Wiedenfels recently told investors (via The Hollywood Reporter), using a lot of corporate jargon such as “duplications,” that cost-cutting measures would soon be put in place within the soon-to-be-formed Warner Media Discovery entity.
“There’s so much structural efficiency potential in the combination that we can afford to make those content investments and get to a much more beneficial financial profile,” stated Gunnar Wiedenfels to attendees of the virtual Evercore ISI Inaugural TMT Conference.
Essentially, he’s saying there will be widespread reshuffling, but as expected, is attempting to put a positive spin on it. THR notes that an expected “$3 billion in cost-saving synergies” will be implemented over a period of two years.
As Wiedenfels is “set to play a key role in the critical integration of the Discovery and WarnerMedia units,” he tried to keep the focus of his interview on the consumers and content that’ll be available to them once the deal closes.
“What we’re going to be able to create is a super deep and super broad library with content that has amazing consumer appeal and it’s going to be one of the most complete offerings in the [direct-to-consumer] space,” he said.
THR adds that content investment between the two sides will be heavy, and as such, there is high potential for “eliminating duplication in technological and marketing expenses.”
As Wiedenfels put it, “I have no doubt we’ll be able to come up with a very compelling product with super topline economics and with a margin profile that will benefit from the elimination of this duplication [Emphasis added]. ”
In other words, they’re investing in ways to make operations cheaper and more efficient for themselves through strategic cuts. “We will be spending more on content this year than ever before in the history of Discovery,” added Wiedenfels. “We are really investing heavily.”
A Business Insider headline agrees that all of this talk, and particularly the term “cost synergies”, is code for layoffs or reductions. As reported by the news outlet, “‘synergies’ are a common feature of big deals” but “AT&T didn’t detail these cost cuts when it announced the merger.”
In their analysis of the situation, Clownfish TV noted that there have been signs of a potential downsizing for months and there will likely be a “Bloodbath 3”, a round of firings reminiscent of the last two layoffs made across WarnerMedia over the course of last year.
As a result of these layoffs, DC suffered greatly, losing most of its executives – including longtime co-publisher Dan DiDio – and is now putting up with an inexperienced skeleton crew running things.
However, Clownfish also points out that Cartoon Network has also seen a shift, as numerous shows have been cancelled or were not picked up for production, Adult Swim merged with HBO, and the network seems to be concentrating on ‘kiddy shows’ once again.
Clownfish’s hosts Kneon and Geeky Sparkles further muse that the best anyone at CN can hope for is to make a “sh** ton of money”, as that accomplishment would in turn justify their respective position.
They add that the best moves CN has going for them in that department are the Paw Patrol movie and the series’ related merchandising, while also suggesting that the potential sale of Rooster Teeth could help facilitate the parent company’s desired cost-cutting measures.
Back to DC, given how the publisher is far from what it was in its glory years, former DC artist Ethan Van Sciver repeatedly says that the company could save face by licensing their library of characters – though, admittedly, this option could adversely affect their ownership rights in the long run.
The publisher’s pivot to young adult readers in an attempt to salvage sagging sales is not paying off, and as such, Van Sciver (routinely) predicts that DC, as it stands, might get sold off or see the closure of its operations completely.
The rise of digital media and the marketplace preference are contributing factors to DC’s troubles, but EVS, and others, believe that the pushing of political agendas at the expense of good storytelling brought everything to this point.
Layoffs all over Warner could be in the thousands as Discovery restructures the place upon the merger taking hold.
What do you make of the potential for the Warner-Discovery merger to result in widespread layoffs? Let us know your thoughts on social media or in the comments down below!