Variety: John Malone Wishes Discovery Could Have Seen WarnerMedia’s Full Financials Before Closing the AT&T Deal

Story from Variety:

John Malone, the billionaire power broker and investor who has shaped the cable and media industries for more than five decades, has made his share of savvy deals. But he expressed regret that he didn’t get a granular financial picture of WarnerMedia before Discovery Communications closed the $43 billion deal to buy the media conglomerate from AT&T.

The 84-year-old media mogul spoke Thursday at a Paley Media Council event in Manhattan, “Wired for the Future: John Malone on Power, Disruption and on the Next Era of Media.”

As Malone recalled it, when AT&T in 2021 reached out about selling WarnerMedia to Discovery, then led by CEO David Zaslav (now CEO of Warner Bros. Discovery), he realized that both TV-centric media companies faced the same challenge with the rise of Netflix and streaming. “We knew that Discovery had a limited successful life expectancy as a linear service,” said Malone, who was a major investor in Discovery and holds a significant stake in Warner Bros. Discovery.

However, Malone said, “We probably could have done a better diligence job to understand what we were merging with.” The company was precluded from doing so by U.S. antitrust law, he said. During the year-and-a-half span the Discovery-WarnerMedia deal was pending, “we really watched an industry deteriorate rapidly,” Malone said, referring to the cord-cutting effects on the pay-TV biz.

Under AT&T, according to Malone, WarnerMedia had turned HBO from a $2.5 billion positive cash-flow business to a $2 billion negative cash-flow business. “That’s not easy to do, guys,” he told the assembled crowd of more than 100 industryites. “You really got to work it. And we walked into it.” At the time, WarnerMedia was investing heavily in the launch of HBO Max, which debuted in May 2020.

Now Warner Bros. Discovery is, in a way, unwinding the Discovery-WarnerMedia deal, with Zaslav set to become president and CEO of the studios and streaming company (to be called just Warner Bros.) upon completion of the company’s split expected to occur by mid-2026. Warner Bros. Discovery’s current CFO, Gunnar Wiedenfels, is to become chief executive of Discovery Global, the entity that will house Warner Bros. Discovery’s TV networks and Discovery+.

Joining Malone for a panel discussion at the Paley event were Zaslav, IAC chairman Barry Diller and Liberty Global CEO Mike Fries.

Zaslav said that when he spoke with AT&T chief John Stankey about the Discovery-WarnerMedia deal, Stankey expressed some doubt the transaction was possible, given that Discovery was significantly smaller. “I said, ‘It’s meant to be,'” Zaslav said, noting that Malone earlier had been offered the chance to head Time Warner. “I believe in karma.”

“Karma came our way on Warner,” said Zaslav. “Hasn’t been easy, but we got that business going again.” In 2023, Warner Bros. Discovery changed the name of HBO Max to Max before switching back to HBO Max again this summer. In discussing Warner Bros. Discovery’s Q2 2025 earnings last month, Zaslav said the streaming business is on track to exceed $1.3 billion in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in 2025 and to reach more than 150 million subscribers by the end of 2026.

Malone has been a longtime partner of Zaslav, as an investor in Discovery Communications and Warner Bros. Discovery. Malone earlier this year stepped down as a director on Warner Bros. Discovery’s board to assume the role of “chair emeritus.” Malone is chairman and largest voting shareholder of Liberty Global, a European and U.K. telecom operator that is led by Fries. Meanwhile, Malone and Diller have been legal foes over the years as well as business partners.

The Paley Media Council event was timed for the Sept. 2 publication of Malone’s new memoir “Born to Be Wired,” which draws a connection between the broadband networks that the companies has has run or invested in have built and today’s massive technology companies.

A lot of the chummy discussion involved Malone and the other execs reminiscing about their past deals and ventures.

For example, Malone recounted his first personal meeting with Diller — which he said “was a huge disappointment.” When Diller was head of Paramount Pictures (from 1974-84), Malone “had been skulking around trying to figure out how to build a competitor to HBO.” He had tentatively brought together Paramount, Universal and Disney to create a premium cable channel called Hollywood Home Theater. But when Malone met with Diller at the latter’s home, Diller said Paramount had decided it was going to do an exclusive output deal with HBO. “And so that was the end of that,” said Malone.

Malone also told of how in the early 1990s, he worked out a plan with Diller, whom Malone had brought on to head QVC, to try to buy Paramount Pictures by leveraging QVC’s equity and Malone’s ownership of cable giant Tele-Communications Inc. But Viacom boss Sumner Redstone sued Malone in 1993, accusing the TCI chief of “bully-boy tactics and strong-arming competitors” and leading the FTC to force TCI to withdraw from the Paramount bidding. Viacom ended up sealing the deal for Paramount in March 1994. “Sumner blows TCI out with this litigation, and Barry just didn’t want to go that extra mile and take on Bell South as a controlling partner, right?” Malone said. “So [Diller] stood down from that,” he continued, which was a “great disappointment, I mean, obviously, it would have been a huge, huge home run with his talent and Paramount and the industry behind him.”

Zaslav recalled the Home initiative led by Malone to create a national cable broadband footprint in a joint venture with U.S. operators (with the exception of Time Warner Cable), launched in 1996. “He has such a vision for where the industry is going,” Zaslav said. Malone said about Home, “It certainly advanced the internet dramatically,” but he added that AT&T, after it acquired TCI, could not execute on the strategy.

About Zaslav, Malone said, “I think he’s terrific. Energy level, the focus, the ability to do deals have been just incredible.” Zaslav returned the compliment: “Deep down, everyone wants to be in business with John, not just because of how brilliant he is, but because he’s a kind person that always does the right thing.”

The session was moderated by media journalist Mark Robichaux, who served as editor for Malone’s latest book and is the author of 2002’s “Cable Cowboy: John Malone and the Rise of the Modern Cable Business.”

Earlier in the session, Malone spoke about his father, an engineer and inventor who worked on the industry’s earliest TV sets. Malone said he found out later in life that his dad was autistic, as is Malone himself. “Getting his attention was a hell of a motivator,” he said, calling his father his “first mentor.” “Hard to get approval, but when you got it, it was gold.”

The mogul also recalled Ted Turner coming to Malone in the 1970s, when Malone led TCI, to help him launch TBS as one of the first national cable TV networks. Malone quoted Turner as telling him: “I’ll kiss anything you want if you launch my channels.”

In “Born to Be Wired,” Malone “recounts the extraordinary saga of how America was wired — how a single copper strand evolved from a rural TV-antenna service into a high-speed backbone powering the internet and clearing the path for Amazon, Facebook and Google,” according to the blurb from publisher Simon & Schuster. “Malone offers an insider’s account of launching television’s first cable networks —including Discovery, TBS, QVC and BET — and the strategy behind era-defining mergers, from Warner Bros. Discovery to Live Nation Entertainment.”

Malone stands to make billions after Charter Communications’ proposed acquisition of Cox Communications closes. His Liberty Broadband holding company owns a 26% stake in Charter, which has a deal to acquire that stake concurrently with the closing of the Cox takeover.

Malone is chairman of Liberty Media, Liberty Broadband, GCI Liberty and Liberty Global. From 1996 to March 1999, he was chairman and CEO of TCI until it was sold to AT&T. Before that he was president and CEO of TCI from 1973 to 1996. Malone is chair emeritus of Warner Bros. Discovery, a director emeritus of Liberty Latin America and chairman emeritus of the board for CableLabs.