Warner Bros. Regime Change: What's Behind Greg Silverman's Ouster

The production head's departure comes amid flops, lost confidence (and that $85?billion AT&T takeover).

The departure of Greg Silverman as Warner Bros.' production head on Dec. 14 came as a surprise only in that it finally happened. For many months, Silverman-is-out rumors swept the industry, usually pegged to the release of such flops as Jupiter Ascending, Pan and In the Heart of the Sea. Sources say that months ago, talent reps and even some major filmmakers began lobbying Warners chairman Kevin Tsujihara to replace Silverman, 44, having lost confidence in his leadership as the studio suffered through a drought.

This year, Warners began to do better at the box office, pulling in $873 million worldwide for Batman v. Superman: Dawn of Justice, $746 million on Suicide Squad and $685 million and counting on J.K. Rowling's Fantastic Beasts and Where to Find Them. Warners recently started pitching around town that it is having one of its best years ever, noting its operating income of $433 million in the most recent year is a 12 percent increase from a year earlier — which made it an odd time to pull the plug, finally, on Silverman.

The nicest possible spin, as advanced by one high-level studio insider, is that Tsujihara knew some time ago that Silverman had to go but loyally waited for the studio to get some hits to make his production chief look good on his way out. (Silverman, in the first year of a three-year deal, said he chose to leave to pursue a "multifaceted new venture focusing on both content production and media and technology-related entrepreneurial ventures.")

The reality is that while Warners has had hits in 2016 and The Lego Batman Movie likely will perform in February, the studio has been serving up a better grade of beef, but it hasn't been prime steak. Silverman's critics say Batman v. Superman, properly executed, should have topped $1 billion worldwide, and with DC movies dated for years to come, that launch was important.

By imitating Disney's silo strategy, Warners has invited unflattering comparisons with its Burbank neighbor, which is hitting one movie after another over the fence: The Jungle Book, $967 million; Captain America: Civil War, $1.2 billion; Finding Dory and Zootopia, $1 billion each. Watch and see if Rogue One doesn't get past $1 billion, too.

So Tsujihara needs to up his film game. The Warners shake-up comes against the very big backdrop of a pending $85 billion merger of Time Warner with AT&T. Peter Chernin, the former No. 2 man at Fox, likely will play a role of major influence over content creation when and if the AT&T acquisition goes through.

Even if it happens, the AT&T-Time Warner deal is expected to take months to grind its way through the system, and that provides an opportunity for Tsujihara, 52, to build a stronger case for himself. Another agent with significant business at Warners adds that Tsujihara's only logical move was promoting New Line chief Toby Emmerich, 53, an insider who already sits on the studio's greenlight committee and who has long been understood to have a strong relationship not only with Tsujihara but with Time Warner CEO Jeff Bewkes. "That is Management 101, to have your own person," says the agent. (Sue Kroll, 55, will continue to run marketing and distribution.)

The move comes just before New Line is expected to stumble with Collateral Beauty, but the division has had a good year, with hits including Central Intelligence ($217 million) and The Conjuring 2 ($320 million). Still, one industry figure with ties to Warners notes that New Line's movies have been cheaper and more concept-driven than the Warners films, which tend to be more filmmaker- and star-driven. While Warners had been like a high-end retailer, he says, for the most part, "New Line was only trying to do 99 cent store commerce."

This story first appeared in the Jan. 6 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.