Discovery chief David Zaslav will serve as president and CEO of the newly merged company, Warner Bros. Discovery, with WarnerMedia CEO Jason Kilar expected to exit. Zaslav’s first major hire for WBD was Chris Licht as the new chief of CNN, following the ousting of Jeff Zucker after a WarnerMedia investigation found he hadn’t disclosed a consensual relationship with now-exited CNN marketing chief Allison Gollust.
Discovery ended 2021 with $4 billion in cash on its books, and it generated some $2.4 billion in free cash flow for the year. Warner Bros. Discovery will shoulder significant debt after the transaction is complete, with Discovery executives vowing to reduce the leverage ratio from about 4.5 times earnings immediately after the deal closes to 2.5 to 3 times earnings within two years. At close of the WarnerMedia spinoff, AT&T expects to reap $43 billion (and the new WBD to assume up approximately $43 billion of additional debt). AT&T aims to use the proceeds from the WarnerMedia spinoff to pay down net debt, which stood at $156.2 billion at the end of 2021.