No Mercy for White Collar Executives in Pandemic-Battered Media Ecosystem (Column)

There was a time in the entertainment industry when senior executives who were on the way out had the luxury of a long runway to make it look like they were the ones who decided that the time had come to move on. Those days are long gone, judging by the shakeup unveiled Friday by WarnerMedia.

News that both Bob Greenblatt and Kevin Reilly have been pushed out in a massive management overhaul set in motion by newly appointed WarnerMedia chief Jason Kilar is indicative of the no-mercy environment that has gripped media and entertainment. The economic wallop of the pandemic is seemingly wiping out the few remaining niceties that the business once afforded white-collar executives with good track records.

WarnerMedia is bracing for massive layoffs across the company that are expected as early as next week. The cuts will be part of a broader restructuring and downsizing at WarnerMedia parent company AT&T. The new streamlined operational structure that Kilar unveiled makes sense for the new era when content is truly king and networks are no longer the locus of organization for TV companies. “De-layering” is the watchword of the era.

Greenblatt, who was chairman of WarnerMedia Direct to Consumer and Streaming, and Reilly, who oversaw programming for HBO Max and Turner’s TNT, TBS and TruTV, are both seasoned programming executives who came up the ranks when network-centered management of programs and people were the organizing principle of activity.

After more than 20 years of vertical integration, companies like WarnerMedia, endowed with a massive production asset as well as channels, are following the money. The most lucrative and growing source of profits for entertainment giants these days is content licensing.

The moves at WarnerMedia and a similar restructuring unveiled this week at NBCUniversal as well as recent steps at ViacomCBS, demonstrate that the industry is making structural moves to focus on the creation of content first and foremost. That’s why Warner Bros. chief Ann Sarnoff is now overseeing the Turner entertainment networks and HBO programming chief Casey Bloys is taking the reins of HBO Max original programming, reporting to Sarnoff.

The industry was already moving toward the streamlining of content and programming decision-making. The economic pain imposed by the pandemic — a devastation laid bare the past two weeks in quarterly earnings reports for AT&T, Comcast, ViacomCBS and others — has forced CEOs to make deep cuts and radical changes on a much accelerated timetable.

The hasty late-on-a-Friday departures of Greenblatt and Reilly, who will surely be joined by other senior executives at WarnerMedia and NBCUniversal in the coming days, are a sign of desperate times. The new leadership at many of Hollywood’s institutions are showing no mercy to the top echelon of white-collar workers. At WarnerMedia, it’s understood that Greenblatt and Reilly were well-regarded but ultimately seen as ultimately superfluous given the day-to-day work done by their respective lieutenants.

As much as the transition from linear to on-demand business models, the streamlining of duties and the shrinking of hierarchies around programming is going to be a rough adjustment for many who grew up in an industry known for its velvet ropes and velvet coffins.