\n
Three years after orchestrating one of the most ambitious media mergers in recent memory, Warner Bros. Discovery CEO David Zaslav is reversing course. The company will now split into two separate businesses: one focused on Warner’s film and TV studios and HBO Max, the other housing cable networks like CNN, TNT, and Food Network.
\nZaslav once called the merger his “Maltese Falcon”—a reference to the 1941 film about an elusive treasure worth chasing at any cost. But that dream has collided with the brutal realities of modern media: collapsing cable revenues, a hyper-competitive streaming landscape, and over $50 billion in debt.
\nThe 2022 merger between Discovery and WarnerMedia saddled the combined company with a debt load it couldn’t sustain. Zaslav responded with $5 billion in cost cuts—layoffs, canceled projects, and the shuttering of CNN+. Yet morale plummeted, growth stalled, and the company’s stock lost 60% of its value.
\nEmployees were particularly frustrated with Zaslav’s lavish compensation—over $140 million across three years—while thousands lost their jobs. One internal survey showed 5% of employees were dissatisfied working at the company, an unusually high number.
\nThe merger, according to analysts, simply didn’t work. The brands lacked synergy, and the debt was too heavy to bear. “The only option was to undo much of what he engineered,” said Paul Verna, VP of content at Emarketer.
\nZaslav, a former General Electric executive who built Discovery through acquisitions, believed Warner’s premium content would supercharge a global streaming play. But by the time the deal closed, the industry had shifted. Cord-cutting accelerated, the pandemic disrupted production, and Hollywood strikes brought everything to a halt.
\nInternally, Zaslav’s decision-making came under fire. He scrapped projects like “Batgirl” and CNN+, while simultaneously greenlighting costly flops like “Alto Knights.” His apparent dismissal of the NBA’s importance to TNT—saying the company didn’t \"have to have the NBA\"—angered league officials and contributed to Warner losing the rights in a new media deal.
\nDespite the turmoil, Warner’s studio and streaming arm has recently shown signs of recovery. Streaming EBITDA rose from $103 million to $677 million in a year and is projected to reach $1.3 billion. The upcoming “Superman” reboot and the success of HBO's “The Last of Us” offer some optimism.
\nThe cable networks division, while carrying most of the company’s remaining $34 billion in debt, recently secured higher carriage fees from distributors like Comcast and Charter—an important buffer as ad dollars continue to decline.
\nThe big question now: what’s next? Many analysts believe the ultimate goal is to position both companies for acquisition. For Zaslav, the breakup may not be the end—but a final pivot in an industry that’s running out of second chances.
\nGoogle’s new AI Max campaigns claim 14% more conversions—some advertisers are seeing as much as 27%.
\nTempting, right?
\nBut more performance doesn’t always mean more control.
\nIf you're wondering where the trade-offs lie, Dii Pooler breaks it down.
\nAI Max isn’t just an upgrade to traditional Search—it’s a different beast.
It ditches your keyword list in favor of broad match and what Google calls “keywordless AI” to match ads to more search terms.
It’s fast. It scales. And it uncovers new search volume you’d usually find through weeks of manual testing.
\nWith AI Max, you hand over a lot:
\nYou can tweak things—but not like you can with standard campaigns.
\nAI Max is great for discovery and upper-funnel reach.
Regular Search still wins where precision, intent, and control matter most—brand terms, competitors, high-value keywords, bottom-of-funnel traffic.
Bottom line: AI Max isn’t a replacement—it’s an expansion.
Test them side-by-side. Use each where it excels.
Was this email forwarded to you?
\nsubscribe |
That’s it for today and as always It would mean the world to us if you help us grow and share this newsletter with other operators.
\nOur mission is to help as many business operators as possible, and we would love for you to help us with that mission!
\n\n\n | | \n\n |
5x weekly newsletter join 90,000+ readers! At Scale & Strategy We are all about Entrepreneurship, Business Strategy, Technology, and marketing.
|
5x weekly newsletter join 90,000+ readers! At Scale & Strategy We are all about Entrepreneurship, Business Strategy, Technology, and marketing.