How much damage can Jason Kilar do to Warner Media on his way out?
This is the question.
Well, the real question is, how long will John Stankey allow Jason Kilar to keep making “bold moves” that devalue the asset he is counting on to generate a lot of success in the near future under new leadership?
It’s often hard to separate legitimate, bold business decision-making from the actions of an arrogant, willingly-destructive leader of a cult of popularity.
This last month or so, two major stories in two different entertainment businesses are forcing this distinction out of carefully constructed invisibility.
One, in the NFL, is Stephen Ross, Miami Dolphins owner, firing his team’s head coach, Brian Flores, to the shock of 95% of interested observers, professsional and amateur. The coach had just brought his very young team from 1-7 start in this last season to a 9-8 finish, 1 win from a playoff berth. It was his second straight winning season, the first time the Dolphins have achieved that in two decades. His defense was top ranked in many categories.
Why did Ross fire him?
He refused to say. But after the shock firing, a series of rumors started floating through the media, accusing Flores of not being enough of a team player, being too brusque, and suddenly being alleged to be desperate to find a new quarterback to replace their high draft pick QB - after a 15-8 record over his first 2 seasons - after we spent the entire season hearing that it was the owner pushing that agenda.
“Did you consult with other executives before you made this decision?”
“There is a group of folks that you would expect to be involved in this from a legal standpoint and an H.R. standpoint.”
“But did you consult with other executives, maybe the ones who have taken over, about this decision and the effect that it would have on the company?”
“I am not going to answer that question.”
“Does that mean, ‘No’?”
“I am not going to answer the question.”
Oh… sorry… that exchange wasn’t with Stephen Ross. That was Jason Kilar, in an exchange reported by Dylan Byers, of Kilar in conversation with the CNN staff in Washington after he cut Jeff Zucker’s throat just before Zucker performed ritual seppuku for the media yesterday. (Specifically, it was an exchange with Kaitlan Collins, the White House Chief Correspondent who was meeting Kilar for the first time.)
Ah… for the long-ago days of his WSJ profile - May 2021 - when he said, “My job as a leader is to provide context and rationale, and explanation behind the change.”
Yesterday’s shock exit by Zucker has been a party for the gossip journalists. Sex, a lie, and no videotapes. But they all got to churn through the long and gossip-public history of Zucker’s romantic relationship with his deputy, Allison Gollust… not coerced sex or harrassment… not a career effort by Gollust… not even a marital affair, though some don’t believe claims that it only became sexual after their mutual divorces.
But at its base, Jason Kilar pushed the button on an enemy who was sure to continue in leadership under incoming David Zaslav while he was negotiating his severance package at the end of a massively compensated attempt (and failure) to modernize and grow Warners. When asked for details about the choice, all Kilar would offer was boilerplate bullshit.
Stephen Ross pushed the button on a successful and ascendant coach by almost every measure. When asked for details about his choice, all Ross would offer was boilerplate bullshit.
It was Ross’ legal right to fire his head coach for pretty much any reason. It was Kilar’s legal right to fire Jeff Zucker for failing to disclose a romantic relationship with a business subordinate. (It’s always about the subs for Jason!)
But both men appear, from even a short distance, to have damaged their franchises with choices that do not seem to pass the smell test.
I personally believe, without proof, that Ross fired Brian Flores because Ross had a plan to bring Jim Harbaugh to Miami, hatching a billionaire-brained plan to hide what he was taking from his alma mater, Michigan, by having Harbaugh interview with Minnesota first. The issues of racism amongst the NFL owners, the focus of Flores’ subsequent lawsuit, are obviously real. But in his zeal for the object of desire, Harbaugh, I believe Ross mistakenly unleashed a force that may cost him his NFL franchise. Like every movie villain, he thought he had his victim in a position where silence was the only option. Oops.
But I digress…
Jason Kilar is a 800-pound gorilla as long as he has his job and seems perfectly happy to destroy Warner Media to maintain his image as a forward-thinking leader of vision. He is the reason why top executives are shockingly locked out of their computers and walked out of the door of offices with a box of their stuff when they have nothing left to lose.
I have not been a Kilar fan during his Warners tenure. Project Popcorn was absolutely a loser, no matter how many media geniuses have bought Kilar’s spin. The idea of trying day-n-date as a tool to build a streamer? Not insane. Wrong, but not insane. But unlike Universal, which took advantage of the virus to push its shortened window interest, Kilar acted without really working out the consequences beforehand or having any real plan except, BOLD ACTION.
The first movie to lose on this was the first movie they pushed to day-n-date, Wonder Woman 1984. But as wrong as it was, I say, okay… try something! But even before WW1984 opened, they pushed forward with the entire 2021 slate. No idea what the status of COVID would be through the year. No idea what the numbers on Wonder Woman would be. Hundreds of millions of dollars - and if you believe it’s just a couple hundred million, I will counter that Legendary alone got more than that - thrown at the wall to see what would stick.
Kilar’s insistence on being right about this strategy meant not being flexible enough to maximize the upside for the company in the fall of 2021, with Dune and The Matrix Resurrections. Both movies ended up doing almost triple what they did in the United States internationally, where they were mostly released like “normal” in theaters. Of the 4 big openers leading to a record October, Dune was the only one to fail to open to over $10,000 per screen.
Regardless of Project Popcorn, it was decided pretty early in 2021 - before summer was over - that Warners would go back to a theatrical-first model in 2022. The relentless insistence that PP worked is belied by the reality that if it had actually worked, there would be no reason to abandon it in 2022.
But my current feeling that Kilar may need to be fired before the Warner Bros Discovery spin-off happens started with Kilar’s media tour to sell the success of Propect Popcorn, leading to his pronouncement:
"Think about when movies would show up on HBO, which is eight to nine months after theatrical premiere. The Batman is going to show up on day 46 on HBO Max," CEO Jason Kilar said. "That is a huge change from where things were in 2018, 2017, 2016."
"I feel really, really good knowing that The Batman and Black Adam and The Flash and Elvis and a whole host of other movies are literally going to be showing up on day 46 on HBO Max in a variety of territories all over the world," Kilar added. "That is a very, very big change that I don't think people appreciate, and I feel really good about it."
Uh… shut the hell up, wouldya?
If you are selling HBO, yes, it is a benefit that movies are coming to the service much more quickly. Yes!!!
But is it good for Warner Media?
Does this maximize the value of the content in which Warner Media has a direct financial stake?
What did the two biggest hits of October 2021 share? Neither one announced a VOD date or a streaming date or a physical media date within weeks, before or after, their release.
No Time To Die, the Bond movie, went to Premium VOD just 33 days after theatrical release. Probably too early… as I have said repeatedly, this is all experimentation in the time of COVID. Nothing inherently wrong with that, even if it isn’t the best choice, ultimately. But the point was… they announced that November 9 PVOD release on November 7, at the end of $6m 5th domestic weekend. The film lost 5% of its screens for that 6th weekend and 21% of its per-screen average. 88% of the film’s domestic gross landed in those first 5 weekends. The question remains, how much more was there if they had let it run without PVOD at that point? MGM/UA went for the Thanksgiving PVOD dollars instead.
Venom: Let There Be Carnage went to PVOD on November 23, 54 days after theatrical release. Also home for Thanksgiving. When was it announced? November 17.
Neither film did $1 million over a weekend at the box office after hitting PVOD. The Chicken v Egg question is an ongoing debate.
Dune did $108m domestic in spite of the day-n-date release and in the face of a heavy “prove it” feeling in the marketplace. Not only did the film get rave reviews, but critics repeated, almost like a mantra, “you need see it in a theater.” The sense I have from most people I spoke to in October was that word-of-mouth was exceptionally strong. Still, the film dropped like a stone in theaters, 62% then 52% in Weekends 2 and 3.
I believe that Dune would have played strong through a soft November if Warners had done a “normal” theatrical release. Can’t prove it. And no one can prove otherwise. Did Warners believe in Dune when it landed? No idea. But we do know that they had already paid Legendary out for the day-n-date during the summer and once that happened, there was no going back.
It’s all very lovely to have favorite children. But when you are so obsessed with one child over all the others and are willing to damage the institution you have built to promote that one child’s interests, you have trouble.
Now, Mr. Kilar goes to Washington to kill off an executive who is wildly controversial already… but who has a loyal team and, as noted before, is reasserting his passion for the work under soon-to-arrive new leadership.
And when questioned by the staff - a bunch of hard-charging reporters - Kilar basically takes The Fifth time after time after time.
“I felt that this was the right course of action, full stop,” Kilar said. “I commit to you that this was carefully thought through in terms of every scenario and every possibility, and in the end this is the decision that I came to, and I am comfortable with this decision.”
Kilar is beginning to look like Eddie Murphy breaking stuff at Torchy’s, the redneck bar, in 48 Hrs. “Fucking heard of (me) now, man?!”
Problem is, Kilar seems to think - or wants you to think - he is always the good guy in the story. And Eddie’s Reggie Hammond is a good guy in many ways. When faced with someone who is not a sucker, he is an honest crook. But one of the tensions in the movie is that he is always motivated by his own interests. He wants his money. He wants sex. He wants to keep his sanity and his pride until he gets out of prison. Getting “the bad guys” is never what he really wants. He is forced to confront them to get what he (and his cop not-partner, not-friend) wants. But he never becomes pleased by the idea of confronting them. He knows they are deadly and if he can just sneak away with what is his, he would prefer it.
But back to Torchy’s…
“I think you’re on your way to being out of business, all right? Let’s see what we can fuck with next?”
That question goes right to John Stankey.
What will Jason Kilar fuck with next that will make David Zaslav’s new company weaker at birth?
Two or three or four months of someone as smart and apparently vindictive and comfortable not answering for his decisions as Kilar is a looooooog time. Look at what he’s been able to do in just 2 years!
And I don’t just mean utterly failing to fix the tech problems with HBO Max, which I now have to sign out off and sign back into every time I try to use it on every TV in my home.
I mean, what surprise is next? What scores does kind, gentle, benign genius Kilar want to settle before he gets his high-8-figure payout?
I really don’t know. I don’t think they would let him sell Harry Potter rights to Comcast or to throw $600 million at Disney to buy partial rights to the Avatar sequels or to greenlight a Citizen Kane remake focusing on Jay Penske.
But I would be surprised if there wasn’t at least one more “surprise” to come before Kilar rides off into the sunset to Amazon or Apple or some international company that will pay him $75m a year for a few years before closing the division they hired him to run.