WarnerMedia CEO Jason Kilar Is Negotiating Exit After Discovery Merger Announcement

Discovery CEO David Zaslav will lead newly merged company that was announced Monday

Jennifer Maas

(Photo by Justin Sullivan/Getty Images)

WarnerMedia CEO Jaskon Kilar is in negotiations for his exit from the company, two individuals with knowledge of the situation told TheWrap. Kilar has hired a legal team, the induvials added.

The news comes hours after it was announced that AT&T would spinoff WarnerMedia in a deal that will see it merge with Discovery. If he exits, Kilar will leave WarnerMedia after less than a year as its CEO. One individual added that Kilar was not aware of the impending deal until Saturday night.

The New York Times first reported the news of Kilar’s exit talks. Reps for WarnerMedia did not immediately respond to TheWrap’s request for comment.

Discovery CEO David Zaslav is set to lead the spun-off company, which is expected to reveal its name as early as this week.

Under the terms of the all-stock agreement, AT&T will receive $43 billion (a figure subject to adjustment) in a combination of cash, debt securities and WarnerMedia’s retention of certain debt, and AT&T’s shareholders will receive stock representing 71% of the new company. Discovery shareholders will own 29% of the new company, which Zaslav said would announced its new name in coming days. The boards of directors at both companies have approved the merger.

The deal, which is expected to close in mid-2022 subject to regulatory approval and a vote by Discovery shareholders will create an entertainment juggernaut that seeks to rival Netflix and Disney, and puts the likes of Warner Bros., CNN, Turner and Discovery’s stable of nonfiction networks under one roof — as well as two competing streaming services, Discovery+ and HBO Max. It also combines WarnerMedia’s U.S. sports rights like the NBA, MLB and March Madness with Discovery international sports giant Eurosport.

The combined company’s anticipated 2023 revenue is approximately $52 billion, with more than $15 billion of that in direct-to-consumer revenue. The merger should bring about “at least” $3 billion annually in cost savings via synergies, the companies said. That typically means layoffs are coming.

The new company will initially have $55 billion in debt, Zaslav said in a press conference with AT&T CEO John Stankey following the announcement. He said that the company would also have $8 billion in free cash flow that would allow the company to quickly pay down that debt while also leaving room for expansion and strategic investment.

Beatrice Verhoeven contributed to this report.

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