By Joe Flint
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 8, 2020).
WarnerMedia's new boss ousted the leadership of HBO Max, the
streaming service that launched less than three months ago, as part
of a broader overhaul that aims to simplify how the entertainment
giant makes and distributes content.
Chief Executive Jason Kilar said on Friday that he is removing
WarnerMedia Entertainment Chairman Robert Greenblatt, who oversaw
HBO and HBO Max as well as several other cable channels, and Kevin
Reilly, who was the unit's head of content. All of the WarnerMedia
production operations are now being rolled into one unit.
The reorganization puts a single person, Warner Bros. Chair and
Chief Executive Ann Sarnoff, in charge of all content that will be
distributed on the company's many platforms, from HBO and HBO Max
to its cable channels including TNT and TBS. The changes will also
mean layoffs, Mr. Kilar said.
The moves come just months into Mr. Kilar's tenure and rocked
Hollywood on a sleepy Friday afternoon. The decision reflects the
entertainment industry's push to slim itself down in a challenging
economy and uncertainty over the effects that the coronavirus
pandemic is having on television and movie production.
"I realize this is a lot to take in," Mr. Kilar said in a memo
to staff. "And none of us should expect the above changes to be
easy. That said, we are successfully navigating a pandemic together
and I know that, however challenging the above changes may be, we
will also successfully navigate them as well."
Earlier this week, Comcast Corp.'s NBCUniversal shuffled
executive ranks as part of a similar reorganization, and commenced
a round of significant layoffs.
The departure of two high-profile executives who were tasked
with guiding the much-ballyhooed launch of HBO Max is certain to
raise questions about how that platform is faring and whether it
would meet the lofty goals AT&T has for it.
Priced at $14.99, HBO Max is more expensive than its rivals
including Netflix Inc., Walt Disney Co.'s Disney+ and
NBCUniversal's new Peacock service. While the service has a very
large offering of original programming and classic movies and
television shows, the higher price tag and consumer confusion over
the differences between it and HBO may be making it a hard
About 4.1 million people had activated the new service by the
end of June, AT&T disclosed when it released its earnings last
In an interview, Mr. Kilar said that he was very pleased with
the platform's start. He also said the decision to remove Messrs.
Greenblatt and Reilly shouldn't be seen as an indictment of their
performance at the helm of HBO Max.
"I'm incredibly proud of the job that they've done. A hard
decision had to be made," Mr. Kilar said. Ultimately he decided Ms.
Sarnoff was in the best position to take the helm of creative
operations at HBO, HBO Max and the TNT, TBS and TruTV entertainment
Mr. Reilly and Mr. Greenblatt declined to comment on their
The promotion of Ms. Sarnoff isn't a complete surprise. Although
she only joined WarnerMedia about a year ago, she is held in high
regard by AT&T Chief Executive John Stankey, who previously
headed WarnerMedia, and Mr. Kilar, according to company
Also working in Ms. Sarnoff's favor as she adds to her portfolio
is her diverse background. She isn't the prototypical Hollywood
insider reluctant to make changes. Before joining Warner Bros. she
had several senior positions in media and sports including the BBC,
Viacom Inc. and the Women's National Basketball Association. She
also had a stint as an executive at Wall Street Journal parent Dow
Jones & Co.
Among other moves announced Friday, Andy Forssell, currently the
general manager of HBO Max, will oversee the business operations of
the unit as well as marketing and consumer engagement. Both he and
Ms. Sarnoff will report to Mr. Kilar.
Also elevated in the reorganization is Casey Bloys, who
currently oversees original programming for HBO. Mr. Bloys will
report to Ms. Sarnoff and be directly responsible for original
content of HBO Max and the entertainment cable networks,
essentially assuming the role previously held by Mr. Reilly.
Mr. Kilar said Mr. Bloys, as a veteran programmer for HBO, was
ideal to take a more hands-on role at the other entities. "Casey is
the real deal, " Mr. Kilar said, adding that the moves being made
are very much about putting Mr. Bloys "front and center."
The moves by Mr. Kilar upend the structure for HBO Max that his
predecessor Mr. Stankey had set up before ascending to chief
executive of AT&T last month.
Mr. Kilar said the decision was made to consolidate the content
production units of WarnerMedia to make the company more
streamlined. He said he wasn't taking apart anything Mr. Stankey
had put in place, but instead following the same path to better
focus the company.
When Mr. Stankey first came to power over WarnerMedia, he broke
down the fiefdoms that existed between Warner Bros., HBO and the
Turner networks group. That move also led to some high-profile
departures including Richard Plepler, who had overseen HBO until
last year and was well-regarded for his programming and marketing
Mr. Stankey also created a WarnerMedia Entertainment unit that
housed the company's various entertainment platforms including HBO
and the Turner networks.
Mr. Kilar, who had previously helmed the Hulu streaming
platform, felt an even narrower focus inside WarnerMedia was needed
and to do that, the content operations had to be further
consolidated. He is also under pressure to contain costs: HBO Max
has spent heavily on programming and will need to continue to do so
as it tries to establish itself.
As was the case with the NBCUniversal reorganization, there will
be significant staff reductions at WarnerMedia, a process that is
set to begin next week, a person familiar with the matter said.
Mr. Kilar confirmed that the layoffs will begin next week but
declined to elaborate.
At Warner Bros. alone, the staff reductions are expected to be
more than 500 employees, the person said.
The breaking down of the HBO Max unit will lead to cuts as well,
Mr. Kilar said. The layoffs at WarnerMedia aren't expected to hit
the CNN news channel in any significant way, another person
familiar with the matter said.
Since AT&T gained control of the Warner assets in 2018, the
company had indicated it might eliminate original programming from
its basic cable networks including TNT and TBS to focus all its
efforts on HBO and HBO Max.
Mr. Kilar said that while linear television channels like TNT
and TBS have suffered from cord-cutting and consumer shifts to
on-demand platforms, they are still valuable and original content
will remain part of their formula for the foreseeable future.
"We will be the last ones to turn the light off," Mr. Kilar
Write to Joe Flint at email@example.com
(END) Dow Jones Newswires
August 08, 2020 02:47 ET (06:47 GMT)
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