HBO and Turner resignations stun Hollywood
Hollywood was stunned Thursday by the simultaneous announcements that Richard Plepler and David Levy, the respective heads of HBO and Turner, had "decided to move on" from their plum roles at the top of the WarnerMedia empire. Talk of imminent "massive layoffs" inevitably followed.
The big picture: Plepler ran HBO as a very lucrative high-end operation, bringing in profit of about $2 billion per year as well as some 160 Emmys and an Axios show. He also made it clear that he needed little if any help from his parent company, and that he valued his independence.
- HBO's parent company, Time Warner, was bought by AT&T last year. It was renamed WarnerMedia and placed under the aegis of John Stankey, a telecommunications executive suspicious of HBO's big-spending ways. When Plepler pointed to how much money he was making, Stankey retorted that it wasn't enough.
- Stankey is looking for growth rather than cuts, but that's not stopping HBO employees from worrying that they're going to go through the kind of pain that Kraft Heinz went through when it got taken over by 3G.
The bottom line: If efficiency engineering doesn't work for ketchup, it's even harder to make work in Hollywood — a place that can credibly claim significant positive returns on lavish spending, without ever really being able to explain how that works. The culture clash is only just beginning.