WarnerMedia CEO Jason Kilar has hired a legal team to negotiate his exit, now that the company is merging with Discovery Inc. and the combined company is to be led by the latter’s current CEO, David Zaslav, according to TheNew York Times and other reports.
Kilar was kept in the dark about the deal until recent days — in fact, until the Saturday night prior to Monday’s merger announcement, one source told The Wrap.
WarnerMedia has not commented on the reports of Kilar’s exit negotiations.
Yesterday, in a call with reporters, Zaslav and John Stankey, CEO of WarnerMedia parent AT&T, revealed that they had been meeting secretly at Zaslav’s home in Greenwich Village to work out a merger deal.
Stankey said that Kilar continues to be CEO, but added that Zaslav has “decisions to make" on personnel.
Kilar sent an internal memo urging staff to maintain focus amid the “momentous” merger news, but did not mention his own scenario.
Kilar, the founding CEO of Hulu, was tapped for the top WarnerMedia job only a year ago, just before the company’s launch of its HBO Max streaming service.
In that time, he has had a high profile. Hired to oversee the WarnerMedia's reorganization so as to "operate more nimbly" in today's media landscape — including becoming a competitor to Netflix, Amazon Prime Video and other streaming leaders — Kilar oversaw two series of layoffs in 2020 and a management shakeup that saw HBO Max content chiefs Robert Greenblatt and Kevin Reilly let go, with Warner Bros. CEO Ann Sarnoff assuming oversight of the content operations.
He also made a controversial decision to break with the traditional cinematic preview window for movies and begin releasing blockbusters on HBO Max simultaneously with theater release.
While the strategy — which will continue through this year’s end — was based on the reality that the pandemic had shut down or restricted attendance at most theaters in the U.S. and other critical markets, it incensed the cinema industry.
WarnerMedia has since struck a multiyear compromise deal with Regal Cinemas owner Cineworld, commencing in 2022, in which Cineworld’s U.S. cinemas will have exclusive rights to show Warner Bros. movies for the first 45 days of their release—half the traditional 90-day theatrical release window.
While Kilar has acknowledged that WarnerMedia’s communication of the simultaneous-release strategy could have been better, it is credited with having played a key role in helping HBO Max grow its subscriber base quickly, despite its high fee of $15.99 per month.
HBO Max reached 44.2 million subscribers by the end of this year’s first quarter, WarnerMedia reported.
Kilar’s compensation also generated controversy.
His package for 2020, including $1.67 million in base pay and $48 million in stock awards that will vest over four years, totaled $52.1 million. For the same year, Stankey received total compensation of about $21 million, and former AT&T CEO-turned executive chairman Randall Stephenson received $29.15 million.
On April 30 of this year, AT&T shareholders voted against a measure to approve executive compensation, a symbolic rebuke. In presenting the package, AT&T management praised Kilar's performance and experience and defended the package as necessary to help keep him at WarnerMedia.
Kilar’s yearly compensation package was to be about $17 million going forward — but industry experts believe his exit package will be well beyond that sum, reports The Wrap.