Warner Bros. Discovery changed CEO David Zaslav's contract for the second time this year to prepare for a proposed split of the company.
Changes this month were set forth in SEC filings on Thursday — a week before initial bids are made at the Warner Bros. auction. Discovery. Industry sources expect Paramount, Comcast and Netflix to make offers for the embattled entertainment company, which owns HBO, CNN, Food Network and the legendary Warner Bros. film and TV studios.
Warner Bros. Discovery declined to comment.
The sale started in September when David Ellison under Paramount made an unsolicited offer to Warner Bros. Discovery — a month after Ellison and RedBird Capital Partners acquired Paramount from the Redstone family in an $8 billion deal. Since then, the company has made at least three proposals, but all of them were unanimously rejected by the Warner Bros. board. Discovery, which found them too low.
Paramount's latest bid to acquire Warner Bros. Discovery was priced at $23.50 per share, which would value the company at about $58 billion.
external struggle for Warner Bros. Discovery paved the way for Zaslav and the Warner board of directors to make changes to his employment contract. The contract was revised on November 7 to clarify that different allocation configurations would result in the same incentives for Zaslav.
His contract had previously been amended to stipulate his compensation and incentives if Warner Bros. and HBO Max will separate from their parent company, as was expected when Warner announced its plans to split in June. At that time, Zaslav planned to remain in charge of the studios and a streaming company to be called Warner Bros. as a tribute to its historical roots and the pioneering times of the film industry.
The plan was to leave the company's two dozen cable networks, including CNN, TNT, Animal Planet and TLC, behind and rename the company Discovery Global.
The company is moving ahead with its breakup plans. However, the company now plans to spin off its cable channels (Discovery Global) and keep the studios, HBO and streaming service HBO Max as its remaining corporate entities (Warner Bros.).
“The amendment makes clear that if separation is achieved by retaining Warner Bros. and the Discovery Global Spin-Off (the “Reverse Spin-Off”), rather than the Warner Bros Spin-Off…. the Reverse Spin-Off will be treated in the same manner… for all purposes of the Zaslav Agreements,” the document states.
The company previously expected the separation to be completed by December 31, 2026. But a full-scale auction could disrupt those plans—and the deal could be closed later.
Zaslav's contract was modified to extend his employment until December 2030. Previously, his contract expired in December 2027.
“This extension is intended to secure Mr. Zaslav's leadership of WBD for the same period for which we have contracted to serve as Chief Executive Officer of Warner Bros. after separation,” the document says.
The Wall Street Journal was the first to report the non-binding remand. Bids to purchase the company are due November 20..
