Neeraj Khemlani, the president and co-head of CBS News and Stations, is stepping down from his role, according to a Sunday report from Variety.

Khemlani told employees in a memo on Sunday he is leaving his current position for a new “multi-year first-look” deal at CBS where he will create content like documentaries, scripted series and books, the report said. In his current role, Khemlani is responsible for running CBS News, its local stations and popular programs like “Face the Nation,” “60 Minutes” and “CBS Evening News.”

“I’m so proud of what all of you have accomplished — the scores of journalistic wins, the superb storytelling, the creativity that enhanced every aspect of our programming — that has put this division on a stronger path forward,” Khemlani said in the memo, according to Variety.

Paramount, which owns CBS, did not immediately respond to a request for comment.

It is not immediately clear who will succeed Khemlani, but CBS could announce the new executive as soon as Monday, Variety said.

Khemlani began his tenure at CBS in April 2021. Before joining the network, Khemlani spent more than 10 years at Hearst, where he held a number of leadership roles like executive vice president of Hearst Newspapers, president of Hearst Entertainment and Syndication and chief creative officer.

Khemlani’s departure marks the latest major leadership shakeup at a news network this year. CNN’s Chris Licht left the company in June after he faced a rebellion among the network’s talent and staff.

Media companies have been grappling with a soft advertising market, particularly affecting the traditional TV business. Networks are also gearing up for what is expected to be another contentious election cycle in 2024.

As of market close Friday, shares of Paramount are down around 9.5% year to date. In the company’s earnings report for the quarter ended June 30, Paramount reported revenue of $7.62 billion for the quarter, down about 2% year-over-year, as the company’s TV segment was once again dragged down by lower advertising revenue.

The main takeaway from NetflixSecond quarter earnings are business… good.

correct. The core business of a large media and entertainment company is fine.

Netflix added 5.9 million subscribers in the quarter, a sign that its primary initiative for 2023 — cracking down on password sharing and launching a cheaper $6.99 per month ad category — is bringing in new subscribers. Netflix added 1.2 million subscribers in the US and Canada in the quarter — its biggest regional quarterly gain since 2021.

This is not the story for the rest of the media industry. Disney And Warner Bros. Discovery The year was spent cutting content from streaming services to avoid paying waste and saving on licensing fees. Both companies have laid off thousands of employees over the past 12 months to boost free cash flow. Paramount Global And ComcastBoth NBCUniversal affiliates said that 2023 would be the largest annual loss ever for their broadcast businesses.

Meanwhile, Netflix boosted its free cash flow estimate to $5 billion for the year. Previously, the company had estimated it would have $3.5 billion in revenue, but strikes by actors and writers would reduce spending on content. This means that Netflix will actually get more money than you previously thought.

In the next quarter, Netflix expects subscriber gains to be around 6 million again. The company said revenue will accelerate in the second half of the year as it sees the “full benefits” of its password-sharing campaign and steady growth in its ad-supported plan.

In the past year, Netflix’s rating has dropped 60% as subscriber counts have stalled. The company spent a significant amount of time on earnings conference calls focusing on and explaining its new video game business, which was introduced in mid-2021, to help kick-start a new growth narrative.

This quarter’s shareholder letter barely addresses video games.

Why? Because unlike the rest of the media industry, Netflix doesn’t need a new narrative. The old one still works. The flow is increasing. Stacks of liquidity are on the rise. The announcement excites investors. Netflix has a steady pipeline of international content and a deep library to outpace the extended writers and actors strike.

“The lack of references to video games in the shareholder letter suggests advertising is the shiny thing that dominates most of the company’s focus,” said Ross Bennis, an analyst with research firm Insider Intelligence.

Shares of Netflix fell 5% after hours. That’s more of a symptom of profit-taking after Netflix’s big gains this year (up more than 62% as of Wednesday’s close) than anything to chafe in its preliminary quarterly numbers.

After a sharp fall last year, the company is back on track. And you didn’t even need to switch trains.

Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.

— CNBC’s Lillian Rizzo contributed to this article.

Companies and industries have ups and downs. Old media industry in a valley.

The first half of 2023 was a huge disappointment for media executives who wanted this year to be a rebound from a terrible 2022, when a slowdown in subscriber flow slashed ratings. NetflixAnd DisneyAnd Warner Bros. Discovery And Paramount Global to almost half.

Instead, investors are once again excited about Netflix’s future prospects as it cracks down on password sharing, which could lead to tens of millions of new sign-ups. Shares of Netflix have soared in the past five months, outperforming the S&P 500.

Meanwhile, the old players couldn’t get out of their own way.

“When it rains, it rains,” said Rich Greenfield, media analyst at LightShed. “It just keeps getting worse.”

It’s been a bumpy ride for Disney CEO Bob Iger since he returned to lead the company late last year. Disney It recently finished laying off 7,000 employees. Chief Financial Officer Christine McCarthy stepped down last week. The company is pulling programming from streaming services to save money. Its animation business is in serious trouble, with its latest Pixar movie, “Elemental,” scoring the studio’s lowest opening weekend gross since the original “Toy Story” premiered in 1995. Stock has struggled in the past five months.

Paramount Global It cut its dividend last quarter as broadcast losses peaked this year and a weak advertising market exacerbated the ailing cable network business. Wells Fargo issued an analyst note Friday saying the company’s bull case and bear case are the same: selling for parts. Said Warren Buffett, perhaps the most famous investor in history CNBC said the Paramount streaming show “Basically, it’s not good for business.”

NBCUniversal weathered the storm better, shielded by its parent company, Comcast, which derives its revenue from its cable and wireless assets. The above errors have also been taken advantage of. MSNBC has become no. 1 cable news network this month for the first time in 120 weeks, ousting Fox News amid coverage of former President Donald Trump’s federal indictment. The Super Mario Bros. Universal’s Movie is the year’s biggest box office hit, yet stocks haven’t moved much.

All of this is happening with an expanding strike of Hollywood writers playing out in the background with no end in sight. Writers know that the longer the strike lasts, the greater the pain will be inflicted on the media companies, who will eventually run out of content already written. Zaslav recently gave a commencement speech at Boston University and was drowned out in boos and cheers of “pay your book.”

This week may bring more bad news. Film and TV actors are set to join the writers’ strike unless they reach an agreement with Hollywood studios by Friday.

Greenfield said the beneficiaries of shutting down work in Hollywood will likely be YouTube, TikTok and Netflix, which continue to produce international content not affected by the strike.

Legacy media may get a small respite if advertising jumps back up as the 2024 US presidential campaign heats up. But there is still little evidence that investors will reward media companies simply for cutting costs. There is currently no solid growth narrative for legacy media, and merger prospects are murky as regulators block media-adjacent deals like Microsoft’s acquisition of Activision and Simon & Schuster’s proposed Penguin Random House purchase.

The industry has just concluded its annual advertising gala in Cannes, France. Old media executives still shell out company dollars for a yacht lounging trip and rosé drinking. The background was as beautiful as ever.

But the scene is bleak.

Disclosure: Comcast owns NBCUniversal, which is the parent company of CNBC.

WATCH: Mark Reid, CEO of WPP, on the state of the advertising market, from Cannes Lions 2023

Disney On Tuesday, it revealed a change in the film’s release calendar, delaying several entries in the Avatar, Marvel, and Star Wars franchises.

The company hasn’t clarified the decisions behind the release date rearrangement, though studios often adjust their schedules for a variety of reasons. The moves come as a writers’ strike has crippled the film and television industry, causing production halts that could affect release schedules.

Many high-profile films and shows have halted production or ended prematurely since the start of the strike. These include Netflix“Stranger Things” for “Stranger Things”appleTV +, “Severance” and BasicCNBC reported in May that the series, “The Evil.”

Disney did not immediately respond to a request for comment.

James Cameron’s third “Avatar” movie has been moved from 2024 to December 2025, with the fourth film following in 2029. The company’s release calendar indicates that the fifth installment in the franchise is now set to be in 2031. “Avatar,” released in 2009, and “Avatar: Waterway,” released late last year, are two of the top three highest-grossing films worldwide.

In the Marvel Cinematic Universe, the recently retitled “Captain America: Brave New World” will be delayed from May to July next year, with “Thunderbolts” moving to December 2024, “Blade” moving to February 2025 and “Fantastic Four” now. specific. In May 2025.

The changes also affect the two upcoming Avengers movies in the MCU. “Avengers: The Kang Dynasty” has been delayed by a year to May 2026. “Avengers: Secret Wars” won’t be released until May 2027.

Actor Jonathan Majors, who played Kang in Marvel’s Ant-Man and the Wasp: Quantumania, was arrested on assault charges earlier this year and is said to face more abuse charges. Earlier reports said he denied the allegations through his lawyer, but he was dropped by his old management company. Marvel has been silent on Majors’ case.

After the box office disappointment of “Ant-Man and the Wasp: Quantumania,” Disney CEO Bob Iger pondered whether Marvel should prioritize more recent characters instead of continuing to create third and fourth films for established legacy characters.

Disney has also pushed back its planned “Star Wars” movie from December 2025 to May 2026. It’s also added another Star Wars movie to the schedule as well – set for December 2026. Disney has yet to release a Star Wars movie. Movie since “The Rise of Skywalker” in 2019.

humble as it may be, Warner Bros. Discovery CEO David Zaslav this week proved he’s definitely a name-dropper.

Warner Bros. Discovery unveiled its new streaming service on Wednesday, which includes a host of shows from HBO Max and Discovery+. It will be released on May 23 in the US, later this year in Latin America, and in the rest of the world in 2024. It will be called Max — sans HBO.

On a surface level, Warner Bros. Discovery’s decision to ditch the HBO Max name is a logical marketing choice. In depth, it begins to feel like a microcosm of the existential tension that lies at the heart of the company – and the media industry more broadly.

The company is trying to compete with Netflix And Disney Being the winner of the live stream, while at the same time pushing a message of financial discipline that lowers the priority of your streaming subscriber additions. It’s a matter of quality versus quantity, and Warner Bros. Discovery tries to play both sides.

said JB Perrette, the company’s president of broadcasting, during a presentation presenting Max on Wednesday in Burbank, Calif.

Perrett on Wednesday explained why Warner Bros. Discovery has removed the HBO part of the name from the new service. He said HBO is synonymous with adult entertainment, and Max will tend to offer programming for children and families.

“We all love HBO,” Perrett said. “It’s a brand built over five decades to be a trendsetter in adult entertainment. But it’s not exactly a place where parents can easily drop their kids off. Not surprisingly, the category hasn’t met true potential on HBO Max.”

Warner Bros. Discovery executives felt that the HBO name actually limited the streaming service’s audience because it intimidated potential audiences. They also felt that the HBO brand could be diluted by the influx of reality TV shows on Discovery that are set to join the platform, such as “Dr. for conversation over the water cooler in the office.”

“HBO is not television. HBO is HBO. It has to stay that way,” Perrett said at the event. “We would not drive it to its breaking point by forcing it to assume the full scope of this new content proposition had we kept the name in the service brand. By doing so, we will upgrade and better showcase our unrivaled suite of other content and branding services that will be key to expanding The scope of attractiveness of this improved product.

The company’s logic is rational. HBO appeals to a certain audience, but it also doesn’t appeal to a certain audience. HBO fans aren’t going to unsubscribe from the service in response to Max’s name, but some folks who used to be intimidated by HBO may now just subscribe to the adult brand due to the flood of obvious HBO content coming to the service.

When HBO Max initially launched, executives at AT&T and WarnerMedia assured subscribers that this new app was, first and foremost, the home of HBO. Now, about 80 million subscribers later, this point is less important. Those who want HBO already know where to find it, and HBO Max will simply switch to Max on most platforms.

Broadcasting is entering its “teenage” years, Perrett said, and Max as a name makes more sense to continue adding subscribers globally in a world of declining growth.

That would be the end of the story if Warner Bros. did. The stated goal for Discovery was to increase (no pun intended) the number of subscribers who signed up for the Max.

That was every media company’s goal when Zaslav agreed to merge Discovery with WarnerMedia in 2021. But according to Zaslav, that’s no longer a priority.

“I’d rather have 100 million subscribers or 150 million subscribers and be really profitable than try to scale to get too many and end up losing money,” Zaslav told CNBC’s Julia Burstein after the presentation on Wednesday. “We take a look at what people are watching on Max and we can see exactly what they like and don’t like. And some of the things they don’t watch, we can put on AVOD for free.” [advertising-supported video on demand] And some of the things they don’t watch, we can keep non-exclusively on Max, but we can also sell to others.”

“We’re relentlessly focused on creating great content and monetizing in every way we can,” he said.

With a new broadcast strategy — and Max at the center — Warner Bros. Discovery hedges its bets.

The company maintains Discovery+ for customers who are happy to pay $5 or $7 just for Discovery programming. Perrett said the company “doesn’t want to leave any lucrative subscribers behind.”

Zaslav also hinted at Warner Bros. The free, ad-supported Discovery service, which the company said is coming later this year.

Warner Bros. Discovery could have worked for HBO Max, too. For customers who wanted both Discovery+ and HBO Max, it could have offered a bundle at a discount. That’s been the strategy for Disney, which offers bundled ways to mix and match Hulu, ESPN+, and Disney+.

Instead, the company has loaded up one service with everything it has, which may also eventually include some news from CNN and sports like NBA or NHL games. Zaslav said Wednesday that he would get more details on that “in the coming months”. Don’t forget, Zaslav killed CNN+ as a standalone broadcast option last year after about a month in existence.

Warner Bros. Discovery is building the Max as a one-size-fits-all option that has a scale to go around in an ever-increasingly fast post-cable world.

But Zaslav also tells investors it’s okay to limit Max’s growth. It is more important for him to make money than to compete with Disney and Netflix to become the largest streaming operator in the world.

It’s a delicate balance: DisneyAnd Paramount Global, ComcastNBCUniversal and even Netflix They are all fighting the same forces. Investors have shifted the spur-of-the-moment growth-at-all-costs narrative in the past year, halving the valuations of many media and entertainment companies.

What is happening now is, in essence, a hedge. The media industry knows that broadcasting is the future, but growth has slowed. Zaslav defended the value of the traditional pay-TV package while criticizing the former WarnerMedia system’s profligate spending on broadcasting. He’s trying to give investors a new reason to get excited about Warner Bros. Discovery. That message, Zaslav hopes, is to generate free cash flow.

“In the end, I’m the free cash flow guy,” Zaslav said Wednesday. “We want great talent, but in the end, if we don’t make sign-up money, if we don’t have any ARPU… [average revenue per user]We don’t help ourselves and we don’t help shareholders.”

There are some signs that he could be on to something. Warner Bros. Discovery shares are up nearly 50% this year after falling nearly 60% last year.

But when you take a two-part name — HBO and Max — and keep just Max, the implication is “big” over “quality.”

That was the AT&T message. It wasn’t Zaslav’s message yet.

WATCH: The full CNBC interview with Warner Bros. Discovery CEO David Zaslav

Disclosure: CNBC’s parent Comcast owns NBCUniversal and co-owns Hulu.

Activist investor Nelson Peltz spent about 30 minutes Thursday morning talking with CNBC’s Jim Cramer and David Faber in a wide-ranging interview about why he wanted to acquire Disney Board seat.

But his argument barely touched on what must be his strongest point — Disney’s continued failure to plan for CEO succession.

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Peltz referenced his box office slideshow about Disney’s failures under former CEOs Bob Iger and Bob Chapek. He said if he had to boil the presentation down to its core, it would center around Disney’s poor share performance and Trian’s record on value creation. Trian noted that Disney’s share price peaked in 2021 but is currently trading near an eight-year low. The stock rose about 3% on Thursday.

But Disney’s poor performance in 2022 reflected an industry-led recession Netflixstunted growth. Disney’s stock price rally in 2021 resulted from the same phenomenon – investors charging for streaming services with huge subscriber growth. Disney and Netflix are both down about 38% over the past 12 months. Other media stocks fell more. Paramount Global Shares fell 45%. Warner Bros. Discovery Shares are down nearly 50% since AT&T merged WarnerMedia with Discovery on April 8.

Peltz blamed Disney CEO Bob Iger and its board for overpaying 21st Century Fox in 2019 for the company’s decision to shed its dividend during the pandemic. But asking for a seat on the board based on Iger’s track record in making acquisition decisions won’t win over many investors. Iger’s string of deals during his tenure as CEO — acquiring Pixar, LucasFilm and Marvel — ahead of Fox were some of the best acquisitions in the history of the media industry.

Trian also noted Disney’s “flawed direct-to-consumer strategy” in the dossier “despite generating similar revenues as Netflix and having a significant IP advantage”. Netflix launched its streaming business years before Disney+ debuted in 2019. Naturally, Netflix is ​​ahead of Disney (and every other streaming service) in terms of profitability and free cash flow generation.

Peltz plans a proxy battle and it shouldn’t be a stronger argument for shareholders about Iger’s performance as CEO. Instead, it has to do with the Board’s continued failure to plan for a post-Iger world. Iger developed a history during his initial 15-year tenure as CEO of chasing down potential successors, including Jay Rasullo, Tom Staggs and Kevin Mayer. When he quit his job as CEO in 2020, he failed to leave the company outright, setting up an 18-month period where his chosen successor, Chapek, felt undermined by his presence.

Iger is now back, and the Disney board has tasked him with finding a successor in the next two years. Egger’s track record indicates that succession planning is the one area where he really struggles.

“Historically Iger has dominated the succession process, but it shouldn’t be Iger’s choice, it’s the board’s choice,” said Charles Elson, founding director of the Weinberg Center for Corporate Governance. “Disney has left itself open to activist interference because it has had governance issues with succession for nearly 25 years.”

Part of Trian’s presentation to investors is the succession issue, but it doesn’t come up until slide 27 of the 35-slide presentation. Most of Peltz’s argument rests on Disney’s underwhelming stock performance, the decision to cancel the dividend, how the Fox deal didn’t work out, how a hypothetical deal for Sky (one that never happened in reality) wouldn’t have worked, and Trian’s history of boosting share value. He also told CNBC that Disney either needed to take over Comcast’s 33% stake in Hulu or “get out of the streaming business.”

Disney is addressing last year’s stock slump by bringing back Iger, a CEO who is well respected by employees and investors alike. Disney will also have a new CEO soon. Peltz’s argument that Egger needs Trian’s strategic decision-making help after only a few months of returning to the job can prove challenging.

It’s much easier to explain that Disney’s board of directors and Iger consistently got it wrong with succession planning. In his presentation, Trian said that Disney’s shareholder engagement process was “among the worst (if not the worst) of all the companies we’ve dealt with.”

Disney likely wouldn’t want Peltz on the board because it would force the issue of succession, limiting Iger’s ability to remain CEO for longer than two years. As Trian noted in his presentation (on slide 28), the Disney board extended Iger’s retirement date five different times between October 2011 and December 2017.

Perhaps Peltz needs to hone his message to focus on that.

Watch: Disney is more than just a media company, says Trian’s Nelson Peltz

Disney James Cameron’s “Avatar: The Way of Water” took in an estimated $56 million during its second weekend in theaters, which is a 58% drop from its debut.

Declines in ticket sales are common for blockbuster titles, with most seeing a 50% to 70% decline. This metric, known as the second-week decline, is often used as an indicator of whether a film will outlive at the box office or may fade quickly.

Films that drop below 50% are expected to have strong running runs, while ticket sales that reach 70% are likely to see sharp declines as the film fades from the public eye.

“Avatar: The Way of Water’s second weekend drop puts it right where it needs to be as this performance will set the tone for the film’s continued box office journey,” said Paul Dergarabedian, senior. Media analyst at Comscore.

Box office analysts noted that cold winter weather and storms over the Christmas weekend would likely slow ticket sales domestically.

In addition, international ticket sales continue to thrive. The second week decline for markets outside the US and Canada was 43.9%. “The Way of Water” was always expected to generate at least 70% of its box office take from international ticket sales and that’s exactly where the split is as of Sunday.

“The Way of Water” has generated $855 million in worldwide ticket sales since December 3. 16th Edition – $254 million domestically and $601 million from the international markets. Presently, it is the fifth highest-grossing movie released in 2022.

Basic And Skydance’s Top Gun: Maverick is the current leader with $1.48 billion worldwide, followed by universal “Jurassic World: Dominion” ($1 billion), Disney and Marvel Studios’ “Doctor Strange in the Multiverse of Madness” ($952 million) and Universal and Illumination’s Minions: The Rise of Gru ($939 million).

“The Way of Water” is less than half of what Cameron said the film would need to make in order to be considered profitable. Despite dwindling word of mouth, which focused on stunning visuals interrupted by a lackluster plot, the “Avatar” sequel has room to run at the box office.

The next blockbuster – Disney and Marvel’s “Ant-Man and the Wasp: Quantumania” – isn’t hitting theaters until February 4th. 17, leaving “Water Road” a long run at the box office without stiff competition.

“January is absent from direct competition against the film,” said Sean Robbins, senior analyst at BoxOffice.com. “This is when an Avatar sequel can make up for any perceived loss toward reaching long-term expectations, if it is ever going to do so.”

“We live in a world where the craving for instant gratification leads to early results being used as the ultimate measure of a film’s success,” he said. “Realistically, sometimes it makes sense, but sometimes it doesn’t. This is one of the last cases.”

Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is the distributor for “Jurassic World: Dominion” and “Minions: The Rise of Gru.”

The Woman King settled at the box office during its second weekend in theaters.

The Sony movie is expected to generate $11.2 million in ticket sales domestically from Friday through Sunday, down 42% from its opening weekend. Typically blockbuster movies drop 50%-70% from the first weekend to the second weekend.

“Evidence that The Woman King is in it in the long run is reflected in its 42% drop in its second weekend,” said Paul Dergarabedian, senior media analyst at comScore. “As expected, word of mouth and the awards season helped make the film a must-see cinematic event.”

Box office analysts expect The Woman King to easily recoup its $50 million production budget, and have the potential to expand to a wider audience as word-of-mouth spreads, much like Paramount and Skydance’s Top Gun: Maverick in recent months.

Additionally, Warner Bros. Don’t Worry Baby, which has a production budget of $35 million, is expected to make $19.2 million over its opening weekend domestically.

“The Woman King” and “Don’t Worry Darling” are a welcome injection of business for theaters during a lull in the theatrical calendar and for studios building their pipeline of original content and adult-led drama. Low-budget movies like this don’t hit huge numbers at the box office but provide much-needed supplemental revenue to movie theaters.

Production delays caused by the coronavirus outbreak combined with the push to put content on streaming services led to fewer theatrical releases in 2022, compared to pre-pandemic times. So far this year, only 50 films have been released domestically in more than 2,000 locations, which is a drop of nearly 40% from 2019.

While big-budget franchise films dominate the box office charts, films with small to medium budgets are just as important to the theatrical ecosystem. Without them, the domestic box office would lose billions in ticket revenue.

“The Woman King is another great example of original content that connects with and inspires moviegoers on its long-running box office trajectory that could culminate in award season nominations in the coming months,” said Shawn Robbins, Senior Analyst at BoxOffice. com.

According to the National Association of Theater Owners, the $3 movie ticket promotion aimed at boosting sales through movie theaters during a normally quiet weekend for business has attracted 8.1 million customers.

With those numbers, the group said, Saturday was the best day of the year to go to movie theaters.

Movie theaters drew $24.3 million in ticket sales from the National Film Day promotion, according to Comscore. The media analytics firm said it was up 9% from the previous week.

More than 3,000 movie theaters and 30,000 screens in the United States participated in the initiative, including major chains such as AMC Entertainment and Regal Cinemas as well as independent theaters. Feature films included Paramount’s “Top Gun: Maverick”, Warner Brothers’ “DC League of Super Pets”, and Sony’s “Bullet Train”.

Some theater chains offered discounts on franchises, too.

Ticket sales have plummeted in recent weeks, in part due to the lack of summer releases.

The nonprofit Film Foundation, which is part of the National Association of Theater Owners, hopes the discount ticket initiative will motivate customers to return to theaters, especially ahead of some big releases planned for the fall, such as Warner Bros. “Black Adam” movie for Discovery and “Black Panther: Wakanda Forever” movie by Disney.