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Inside the Warner Bros Shakeup and What It Means for AT&T Merger

Analysis: If AT&T merger doesn’t happen, the studio must prepare a backup plan

The shakeup at Warner Bros. on Tuesday seems aimed at making the studio nimble enough to deal with the uncertainty in its immediate future: corporate merger, standalone sale or none of the above.

But, for the record, Warner Bros. CEO Kevin Tsujihara went out of his way to deny that this was the case.

“It has zero to do with AT&T,” he told TheWrap in an interview after the restructuring was announced. “It has nothing to do with the contemplation of the merger happening or not happening — it’s what we thought was in the best interest of Warner Bros. short-term and long term.”

What is indisputable is that a cloud of uncertainty hangs over the studio because of the lawsuit by the Department of Justice against AT&T’s $85 billion bid to buy Warner Bros. parent company Time Warner. This necessarily means the studio has to prepare for conflicting eventualities in the near future.

An individual close to the company told TheWrap that there is no internal clarity over whether the merger will happen or not. But if the merger fails, this executive said, Time Warner is expected to be broken up into parts and sold separately as Warner Bros., HBO and Turner.

Another individual told TheWrap that the fact AT&T CEO Randall Stephenson recently went out of his way to praise President Trump’s tax bill, citing the creation of thousands of jobs for his company, was significant. This knowledgeable observer suggested that Stephenson’s statements were an olive branch intended to facilitate a settlement with the Department of Justice.

No one involved in the deal seems to believe that divesting CNN is in the cards. An AT&T spokesperson did not immediately respond to requests for comment on the matter.

Warner Bros. CEO Kevin Tsujihara’s own future is unknown, and he has two more years on his contract. He placed the studio under the clear leadership of Toby Emmerich, who made his reputation at Warner’s New Line Cinema division where he found low-budget cultural hits like the Stephen King adaptation “It.”

By transitioning studio marketing-distribution veteran Sue Kroll to a producing deal — she was in the running for the top job as well — he removes the possibility of political gamesmanship among his senior team.

The new executive configuration may well reflect the most streamlined version of the film studio to make it attractive to potential buyers. There was a sense that a previous triumvirate structure involving Emmerich, Kroll and former production president Greg Silverman left too much uncertainty about who was leading the studio.

With increased autonomy, Emmerich will be expected to stabilize the studio’s DC Films unit. It’s a content shop responsible for at least six superhero tentpoles in active phases of development, production and postproduction, including Jason Momoa and Nicole Kidman’s “Aquaman,” due this December, and a planned 2019 sequel to Patty Jenkins and Gal Gadot’s “Wonder Woman.”

It will take time for Emmerich to fully realize his increased influence and marching orders for the studio’s slate, but Tsujihara is sure of at least one thing — his company cannot and does not want to be Disney.

“Warner Bros. needs to continue doing what it’s always done: producing the biggest, most diverse slate in the business. That’s what’s made us successful. We can’t do what Disney’s done,” he said.

“It’s worked really, really well for them, but it’s not who we are,”  Tsujihara said. “We need to continue to create a balanced slate of all types of movies and all genres.”

Matt Donnelly contributed to this post.