How David Zaslav Blew Hollywood
As the buzz around “Barbie” began to build, so did Zaslav’s enthusiasm. If there was one thing he could do, it was market a product. At Discovery, he turned “Shark Week” into a cultural phenomenon with promotional stunts like staging a race between Olympic gold medalist Michael Phelps and a shark. (Phelps was actually swimming alone in a time trial, and the shark he was supposed to race against was just a computer-generated image, but it still attracted big audiences.) Zaslav now had quite the conglomerate media at its disposal. He asked his marketing team to involve all divisions of WBD to help make summer 2023 “the summer of Barbie,” and they did. There was a four-part series of the Barbie Dreamhouse Challenge on the home improvement channel HGTV, with teams competing to transform a real house into a Barbie Dreamhouse, and a Barbie-themed episode of the “Summer Baking Championship” on the Food Network, in which all desserts had to be pink. Warner Brothers even partnered with Airbnb to renovate a real-life, rentable Barbie Dreamhouse in Malibu. Zaslav loved sending gift boxes to his hundreds of friends and acquaintances; before the premiere, he put together a Barbie-themed one, complete with dolls, Malibu Barbie beach cruisers and pink T-shirts and hats.
It was, of course, a huge success – a true blockbuster, grossing a whopping $162 million in its first weekend while reminding America why they loved going to the movies. It was a moment of triumph for Hollywood, a validation of its enduring cultural relevance. Even today, despite the fragmentation of the media, they have not lost their democratic power to attract and transport mass audiences all over the world. No less important, the film’s success was a rebuke to the streaming-era belief that one could use data to create a hit or, for that matter, predict one. Even in the age of algorithms, no one seemed to know anything. “It’s the kind of good news you get in the movie world but don’t deserve,” Diller says of “Barbie.”
It was also a moment of triumph for Mattel. The company’s chief executive, Ynon Kreiz, was himself a former media and entertainment executive, and “Barbie” was part of his much larger strategy to transform Mattel into an intellectual property company, with a vast pipeline of films based on his toys. . (Coming soon: a Hot Wheels movie, a Rock ‘Em Sock ‘Em Robots movie, and a horror comedy based on Magic 8 Ball.) He hailed the film as a “landmark moment” for his plan and was celebrated as a genius. Mattel shares had been climbing for months as enthusiasm for the film and Kreiz’s broader, Hollywood-focused strategy grew.
In contrast, WBD shares remained stable. One movie wasn’t enough to change Wall Street’s perception of the company, that it was overleveraged and not ready to grow. Zaslav’s shares weren’t rising either, at least among those who saw him as a symbol of corporate greed. The Monday following “Barbie” weekend, Rep. Alexandria Ocasio-Cortez joined a crowd of protesters at a WGA and SAG-AFTRA rally outside the WBD world headquarters in Manhattan. “This is a fight against the relentless search for more wealth,” she said. “How many private jets does David Zaslav need?”
There was one more source of comfort for Zaslav: cash flow. When WBD reported its results to Wall Street in early August, the big news was that it generated $1.7 billion in cash flow in the most recent quarter, allowing the company to repay more of its debt. Much of this was down to Zaslav’s strict cost-cutting regime, but the writers’ strike was also a boon, saving WBD “on the order of $100 million” in the quarter . Of course, there were challenges, Zaslav told analysts. The studio and DC had “underexploited their potential” – “Barbie” was not part of this quarter – and it was, moreover, a difficult time for the company. Wiedenfels, Zaslav’s longtime CFO, said he was “incredibly proud” of the $1.7 billion, but there was much more where it came from; his “transformation team” was looking for more savings.
