WBD employees fear job losses with Paramount merger

the Warner Bros. Discovery The board may have enriched its shareholders Thursday by choosing to do so Paramount SkydanceThe takeover bid has expired Netflixbut it also terrified many of its employees.

While some of these people own WBD stock and might prefer the financials of Paramount’s $31 per share offer to Netflix’s $27.75 per share offer, CNBC spoke to 10 WBD employees in a variety of different roles at the company. The 10, who asked to remain anonymous for fear of potential backlash, expressed concerns about potential job losses and questions about who would ultimately run their divisions if Paramount and WBD eventually merge.

“It’s fair to say that people have had less news,” said one longtime WBD executive.

However, the WBD-Paramount merger is “not a done deal,” California Attorney General Rob Bonta said yesterday.

The deal must obtain regulatory approval in both the United States and Europe. WBD CEO David Zaslav acknowledged in an all-hands meeting on Friday that the deal may still be a no-go and expressed sympathy for those feeling blindsided by Netflix’s move to Paramount, according to people familiar with the matter.

“The deal may not get done. If it doesn’t, we’ll get $7 billion, and we’ll go back to business,” Zaslav said, according to a leaked audio recording provided to Business Insider.

However, several WBD employees told CNBC that they wish Netflix had acquired WBD, citing several factors.

While Paramount and WBD both have core competencies in news, sports, theatrical movies and streaming TV, Netflix has much less overlap. Netflix co-CEO Ted Sarandos has repeatedly said he plans to leave WBD’s business alone, keeping its theatrical business separate from Netflix while also keeping HBO Max as a separate, standalone streaming service for the foreseeable future.

Netflix was also not taking over WBD’s linear cable business with its offering. Employees at CNN, Turner Sports and the legacy Discovery Networks were to remain in their jobs to forge a path as an independent publicly traded company.

Now, WBD employees are staring at massive job cuts. Paramount executives previously said they plan to cut $6 billion by eliminating “duplicated operations” in “back office, finance, corporate, legal, technology, infrastructure, etc.,” according to chief strategy officer Andy Gordon. Both WBD and Paramount have already gone through thousands of job cuts in recent years.

There are also questions about culture and leadership. While Mark Thompson currently runs CNN, Barry Weiss is editor-in-chief at CBS and could add CNN to her remit.

The Wall Street Journal reported in December that Paramount CEO David Ellison promised President Donald Trump sweeping changes at CNN if he took control of the network. Three CNN employees who spoke with CNBC said there was a pervasive fear among their colleagues that Weiss would make radical changes to the cable network’s anchor points and tone.

“Despite all the speculation you have read throughout this process, I suggest you not jump to conclusions about the future until we know more,” Thompson wrote in a memo to staff on Thursday.

CNN media correspondent Brian Stelter noted that CNN is “an extremely profitable company, and it would be foolish for any owner to jeopardize that.”

On the entertainment side, WBD staff fear there may be too many cooks in the kitchen, which could stifle creativity and innovation in both film and television.

One WBD executive noted that Paramount chief Jeff Shull, Direct-to-consumer chief Cindy Holland and TV chief George Cheeks are all accustomed to being senior leaders in their organizations. Shell was CEO of NBCUniversal. Cheeks was co-CEO of Paramount before its merger with Skydance. Holland was a senior executive at Netflix, where she worked for 18 years.

How this mix fits into WBD’s recreational leadership lineup is an open question and could lead to cultural clashes.

TNT Sports is managed by Luis Silberwasser and has largely geared WBD toward younger audiences through its programming decisions and investments, including Bleacher Report and House of Highlights. Meanwhile, CBS Sports relies on the demographics of those who watch CBS and has historically catered to an older audience. This may lead to cultural conflict, or the divisions can mesh well as complementary assets.

While Silberwasser will have to work with CBS Sports President David Berson on staff duplication, like any other department, there is reason for optimism in the sports department, because WBD and CBS have worked together for many years in producing March Madness, the NCAA men’s basketball tournament. This gives the units a certain degree of familiarity with each other.

WBD also lost the NBA rights last season. The combination of CBS’s strong portfolio of sports rights, including the NFL and Masters, makes WBD once again a major player in sports, even if it is a CBS affiliate.

Another recurring concern among employees is the $64 billion in debt that comes as part of the $111 billion enterprise value of the deal. Several employees said servicing a large debt load had hampered WBD in recent years, and they feared it would lead to more of the same. Two employees noted that it is a relief to be part of a giant company like Netflix, which has a market capitalization of more than $400 billion. Paramount Skydance’s market cap is just $15 billion.