Warner Bros. Discovery Won’t Try to Win the Content ‘Spending War’

“Money doesn’t score goals,” Discovery CFO Gunnar Wiedenfels says

David Zaslav

The soon-to-be Warner Bros. Discovery will have “plenty of money to spend” on content its soon-to-be head honcho David Zaslav (pictured above) said on Thursday. But that doesn’t mean they’re going to just haphazardly make it rain.

“We’re going to spend more on content, but you’re not going to see us come in and go, ‘All right, we’re going to spend $5 billion more,’” Zaslav said on Thursday morning’s Discovery (and only Discovery, for now) quarterly earnings call. “We’re going to be measured, we’re going to be smart and we’re going to be careful.”

OK, so the content spend won’t soar by $5 billion more — but they have already “baked in” what Discovery CFO Gunnar Wiedenfels called “a very significant increase.” That’s on top of what he and Zaslav have already been doing — and what AT&T/WarnerMedia has already been doing.

“We are currently spending at a peak level — or at least the highest level that we have seen in the history of this company,” Wiedenfels said on Thursday. “We spent more than $4 billion for content in 2021 at Discovery alone — and obviously also on the WarnerMedia side they’ve been increasing the spend. So we are definitely spending enough from my perspective. The key question is going to be, how much is going to be enough going forward?”

“It’s not about winning the spending war,” the German executive continued, throwing in a (European) football adage: “Money doesn’t score goals.”

But money they do have. “We’re going to be generating $8 billion or more in free cash flow,” Zaslav said on the same conference call. “So we have plenty of money to spend.”

“The key to these (streaming) platforms, which is true of free-to-air channels and cable channels, is you spend enough that you could nourish an audience that they want to spend time with you, and that they feel that you’re the place that they want to be and you’re important,” Zaslav concluded.

Read Discovery’s Q4 earnings here.

AT&T is spinning off its entertainment company, WarnerMedia, into a new mega-corporation with Discovery. The merger is expected to close in the April-June 2022 quarter.