Those included shelving completed movies like Batgirl—an unheard-of move in Hollywood where even the worst productions get released; rebranding HBO Max as Max, and combining the company’s prestige TV content like The Sopranos with schlocky reality television on the same streaming service. Since the merger, WBD laid off hundreds of employees in multiple rounds across several divisions, including its cable channels and news network CNN, and shuttered the ill-fated streaming service CNN+ just a month after it launched.

“When we took over the company, we said, no sacred cows,” Zaslav told Andrew Ross Sorkin onstage at the New York Times Dealbook Summit on Wednesday. “What would this business look like if we were going to start today?” 

Zaslav called those layoffs the most difficult portion of his tenure as CEO. “Worst day on the job was the first day that we laid off a huge number of people—a lot of people I knew and worked with for many years, a lot of people I respected,” he told Sorkin. But he defended them as necessary, saying, “The business had changed. It used to be that you could have 80–100 people at every cable channel, but now you have one marketing team running all of it.” 

Zaslav argued that the “generational disruption” brought on by streaming meant the media industry had to reshape itself to keep up. Prior to Discovery’s merger with Warner Bros., which Zaslav is credited with spearheading, the two companies were not properly organized to meet these changes, he said. 

“Warner Bros. and Time Warner are companies that had never been restructured for the future,” Zaslav said. 

That future, according to Zaslav, consists of a “healthy company” that no longer loses money on streaming content and is choosier about what it produces. Prior to the merger, Warner was spending $36 billion on content and losing money, Zaslav said. He took issue with many media companies’  breathless pursuit of streaming subscribers, spurred by Netflix’s dominance. “We plan on being careful and judicious,” Mr. Zaslav told investors in February 2022, a few months before the merger closed. “Our goal is to compete with the leading streaming services, not to win the spending war.”

Debt an ‘existential threat’

Since helming the new company, Zaslav, flanked by his trusty lieutenant and WBD chief financial officer Gunnar Wiedenfels, has been focused on increasing cash flows in order to pay down the $56 billion in debt WBD took on to pull off the merger. On stage, Zaslav said the company had generated $5 billion in free cash flow over the last 12 months. So far the company has paid down $12 billion of its debt, according to a third-quarter earnings statement.  

“The existential issue for our company was to pay down the debt, get a solid balance sheet, and have a company that generates real free cash flow,” Zaslav said. “If you look around the media business, you have streaming services losing billions of dollars, companies losing money. The key for us, the artillery we needed that was existential, was we need a healthy company that makes real profitability and real free cash flow.”

The issue became such a priority for WBD that the board even overhauled Zaslav’s and other executives’ compensation, linking performance bonuses to the company’s cash flow numbers rather than its stock price. Zaslav has long enjoyed generous pay. In 2014, as the head of Discovery, then a standalone, medium-size entertainment company specializing in unscripted programming, he was the highest-paid CEO in the country. More recently, throughout the dual actors’ and writers’ strikes, Zaslav’s multimillion-dollar salary was the target of much criticism among actors and writers.