Just ask Jason Kilar how fast things can change in Hollywood.
The WarnerMedia chief, just days after The Wall Street Journal profiled his “script for a new Hollywood,” is already negotiating his exit, following AT&T’s decision on Monday to offload its media business to Discovery in a merger. His glory days leading the legacy Hollywood studio into the age of streaming are officially numbered.
Kilar’s expected exit comes just 13 months after he was hired to lead WarnerMedia and help HBO Max, its nascent streaming service, compete with giants like Netflix and Disney+. His year on the job was a whirlwind — even without factoring in the global pandemic — as Kilar made several landmark personnel and business decisions that reshaped the company. But those same decisions led to internal friction, industry skepticism and ultimately his departure.
First, let’s get to the main question that’s probably on the minds of many: How much is he going to get on his way out the door?
Kilar can expect to walk away with $14.9 million, according to Eric Hoffman, a vice president at Farient Advisors LLC., a compensation consulting firm. That includes $1.25 million in salary, about $2 million in bonuses, and about $11.6 million in stock compensation, based on Kilar’s contract, Hoffman said.
Kilar earned $52.1 million during his first (and now only) year leading WarnerMedia, which dwarfed that of his boss, AT&T CEO John Stankey. Kilar took home more than $49 million in stock awards, on top of his base pay of $1.67 million. However, that $49 million will vest over the next four years. Kilar’s yearly compensation package was to be around $17 million going forward.
After that rich package — how did it get to this point? That takes a little more time to unwind.
Kilar was an outsider at AT&T and Warner when he jumped aboard in April 2020. Tasked with leading WarnerMedia’s streaming makeover, Killar had the resume to inspire confidence, having been the CEO at Hulu from 2007 to 2013 and later, the co-founder and head of Vessel from 2013 to 2017. Before that, he spent nearly a decade at Amazon, where he helped craft the company’s video business.
That familiarity with the entertainment business hasn’t translated well to his role atop WarnerMedia’s food chain, though, according to some.
“Just because someone knows a business well doesn’t mean they know how to actually run the f—ing business,” one showrunner who is currently producing a series for a Warner-owned company told TheWrap. “Clearly Kilar had no inkling of how the business operated because he would never have handled the day and date thing like that.”
“It’s a show business rule that when you are starting in a new corporate job, try and lay low for the first year,” a producer told TheWrap. “Instead, Kilar went hog wild against that theory. Obviously he made a lot of enemies with the Hollywood community and the attitude he had which clearly caught up with him.”
Kilar did not immediately respond to a request for comment.
Ah, the day-and-date thing. The inflection point for Kilar’s tenure came last December, when he decided — without input from the studio’s creative talent — that WarnerMedia would release all 17 of its 2021 theatrical films, including pricey tentpoles like “Matrix 4” and “Dune,” on HBO Max at the same time they hit theaters.
The strategy was ambitious, aiming to beef up HBO Max’s subscriber count while also keeping one foot in the theaters. But the game plan has flopped so far. HBO Max and HBO now combine for 44 million subscribers, representing 11 million new subscribers who have joined the fold since the streaming service launched.
Financially this of course meant a big hit to Warner revenue going forward. In pandemic 2020, Warner Bros. consumer product revenue (including from TV and games) dropped to $12.2 billion from $14.4 billion in 2019. AT&T earlier this year reported $1.2 billion in “foregone licensing revenues” from last year.
That still puts HBO Max miles away from catching Disney+, which now has more than 100 million customers, and Netflix, which is north of 207 million global subscribers. (Yes, HBO Max, at $14.99 per month, costs more than Disney+, which doesn’t help it rack up subscribers. But the service’s clunky rollout, with many potential subscribers confused about which version of HBO to pay for, didn’t help matters, either.) And those subscriber gains have been outweighed by the irritation it caused many producers and creatives impacted by Kilar’s decision. As the Wall Street Journal reported, Warner Bros. had to cut new deals that cost the studio more than $200 million to mollify talent upset by the new, unilateral arrangement.
“It’s not about the idea or the plan, it was about the execution,” the showrunner added. “He costs them $200 million, offends every filmmaker, including [Christopher] Nolan, and every rep in town. If he had a single shred of understanding, he would have consulted reps.”
There were other changes that set Kilar apart, too. Early in his tenure, several HBO Max streaming execs were jettisoned in favor of Ann Sarnoff, the Warner Bros studio chief. The streamlined approach put Sarnoff in charge of all content distributed on WarnerMedia’s platforms, consolidating responsibilities that once fell to several people. Kilar also surrounded himself with a number of ex-Hulu colleagues with little creative experience, such as Andy Forssell, the EVP & GM of WarnerMedia Direct-to-Consumer. Those moves isolated Kilar and eventually made him vulnerable when AT&T decided to ditch its content business.
Does this make Kilar an epic failure? Not exactly. As one former Warner exec said on Monday, Kilar is a “smart guy” who will “land on his feet, fast.” He had a monumental task at hand — keeping Warner’s studio business going while also finding a way to make it a viable streaming competitor in the 21st century. Now, barely a year after starting, that responsibility will soon fall to someone else.
Umberto Gonzalez contributed to this report.