Is that all you've got?
Outgoing WarnerMedia CEO Jason Kilar committed his company to spend $350 million in 2022 to launch CNN Plus, a sum not agreed upon by, or disclosed to, Discovery management ahead of WarnerMedia's soon-to-occur $43 billion spinoff from AT&T and subsequent merger with Discovery.
The Financial Times, which said it obtained the information from inside sources, described the outlay as a "$350 million bet" on the new CNN Plus streaming service, one that soon-to-be Warner Bros. Discovery chief David Zaslav will seriously have to ponder as he looks to trim his combined company's nearly $55 billion of debt.
Also read: CNN Plus Offers $2.99 A Month Price for Lifetime Subscribers
Speaking to FT, one unnamed CNN executive said that Kilar “told us to keep going. The question is: what is Discovery’s commitment to it?”
With CNN internally still grappling with the abrupt departure of popular CEO Jeff Zucker in January, immediate budgetary scrutiny by Zaslav and his team could prove to be dicey.
"The morale is already in the toilet," the CNN exec told FT. "So if you decide, as your first move, to kill, change or delay CNN Plus? That's a very complicated decision for Discovery."
Perhaps a better question for Zaslav and his team: If they think $350 million is a lot to spend on a new entry into the ultra-competitive streaming wars, what are they going to think about HBO Max's budget?
It's notable that when WarnerMedia launched HBO Max two years ago, the conglomerate promised to spend $4 billion on the streaming service over the ensuing three years.
In its ambitious run-up to launch Disney Plus in November 2019, Disney reportedly spent $3 billion on technology and content. And in 2024, the media company will reportedly spend between $14 billion - $16 billion on content across Disney Plus, Hulu and ESPN Plus.
Even Comcast, which has been known to spend more modestly on Peacock, committed $2 billion over the service's first two years on the market. ■
