HBOh…

Jason Kilar pays the iron price as money wins…

You have to feel for Jason Kilar. The guy keeps getting brought in to do a job. He keeps putting the pieces in place to do that job. Then he keeps getting pushed out before those pieces can be fully set in motion, let alone brought to culmination. Today is just the latest and most high profile example to date. With the announced merger of WarnerMedia with Discovery, Kilar is said to be working on his exit from the company he leads but does not control.

And who can blame him? Some writing was pretty clearly placed on the wall when not only did he not give a comment in the press release about the deal, but wasn’t even mentioned! And the reporting by Brooks Barnes for The New York Times confirms the knife in back:

Mr. Kilar was kept in the dark about the deal until recent days, the people said, speaking on the condition of anonymity to discuss private conversations.

And:

The new company will be run by David Zaslav, 60, a media veteran and the longtime chief executive of Discovery. Mr. Zaslav and AT&T’s chief executive, John Stankey, had met over the last few months “secretly from my brownstone in Greenwich Village,” Mr. Zaslav said on a call with reporters on Monday.

Basically, Stankey and Zaslav were operating behind Kilar’s back for months. Months! As he executed extremely complicated and delicate deals. And agreed to do big profiles about his role that would run just days before all of this. Ouch. This is some Red Wedding-level treachery.

If this is surprising to you, it shouldn’t be. Two things can be true. First, that this is a very raw deal for Kilar. Second, that this is a savvy deal by AT&T all things considered.

Of course, it’s mainly a savvy move in that it saves some face in a deal that basically everyone thought was fraught from the get-go. AT&T buying Time Warner made very little sense to anyone who has opinions on such things. I mean, everyone got what they were trying to do on paper. But history is littered with such paper. These deals always fail. They all fail in new and exciting ways. But they all fail.

This time the failure had to do with a quickly evolving media landscape — not to mention telecom landscape — with streaming in particular changing equations. Those equations mainly equated to costs. Billions of dollars needed to fuel fresh content. As Stankey dreamed of Netflix, the reality is that AT&T shareholders were unlikely to foot the bill. Especially under a Mt. Everest of debt thanks in part to content needs, but more so to spectrum needs, and yes, bad deals. Bad deals spearheaded by… we’ll get to that.

So now there will be new shareholders (who are mainly old shareholders — since AT&T shareholders will still be the majority shareholders in the new entity) who will be asked very specifically to cover the cost of competition. The cost of content. The parts summed together should be worth more than the whole, so again, it makes sense.

That doesn’t mean it will work, of course. For one thing, it’s about more than money. And anyone who has followed Stankey’s tenure (first as CEO of WarnerMedia himself, then as the overall AT&T CEO) has reason to worry. From day one, he has meddled. Richard Plepler was the highest profile casualty of Stankey’s HBO shakeup, but he was hardly the only one.

Did I mention that Stankey was also the key architect of the deals that put AT&T in this spot? Here’s Edmund Lee and John Koblin for The New York Times earlier today:

Before he took over as chief executive last year, he was the company’s chief mergers strategist. But his track record has been spotty. In addition to planning AT&T’s purchase of Time Warner, he was behind the company’s $48 billion acquisition of the satellite operator DirecTV in 2015. The service has been bleeding customers for years; in February, AT&T sold part of the business to the private equity firm TPG for about $16 billion, a third of what it originally paid.

This is executive level business!

Still, with Kilar in charge, there was some hope that HBO Max could pull off the impossible: quality — or at least something interesting — at scale. Maybe not historic HBO quality, but still, some good work. Now, under Zaslav, we’re likely to get pure content at scale. Endless hours of ambient television mixed with a smorgasbord of other stuff Warner has in the library. There is likely to be some good in there, and Zaslav seems to have a pretty good reputation when it comes to talent. But it will certainly not be HBO or anything close.

If the HBO brand was being diluted before, now it’s about to be drowned.

To be clear, there is still great content on HBO right now — including the show that every media reporter clearly wanted to use here for obvious reasons: Succession — but most of that is residual from the Plepler era. Others constantly point at Casey Bloys as the continued key to the kingdom for HBO. Does he stay through another major shakeup? We’ll see!

Regardless, I think it’s safe to say that HBO is now officially over. But it’s perhaps less sad than it may otherwise have been because it sure feels like Apple is doing a pretty good job picking up the quality mantle with Apple TV+ (including Plepler himself!). Instead, we’re going to get an HBO Max (or whatever they decide to call the eventual bundled offering — HBO Max Plus? HBO Max Plus Discovery?) that is straightforward quantity.

And that’s sad because again, Kilar was trying some interesting things. ‘The Snyder Cut’ of Justice League wasn’t great but it was an interesting idea and could have perhaps worked with a few more tweaks. The push to put Warner movies on HBO was nothing if not bold. And HBO Max needed bold. As did a world devoid of movie theaters due to COVID. But the move also clearly pissed off all the wrong people. Which is why you get interviews like this today. They literally can’t shove Dune back into the film canister quickly enough. Oh well.