Warner Bros Discovery expects up to US$2.5b charge on scrapped content
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WARNER Bros Discovery on Monday (Oct 24) put a price tag on its decision to scrap Batgirl, The Not-Too-Late Show With Elmo and other series and films deemed unworthy of the investment: as much as US$2.5 billion.
The newly combined media company said that costs associated with cutting content could reach US$2.5 billion, making up a significant part of the total US$3.2 billion to US$4.3 billion in charges related to its financial restructuring.
AT&T’s WarnerMedia unit and Discovery completed their merger in April to form Warner Bros Discovery. The company’s chief executive, David Zaslav, promised investors he would realise US$3 billion in post-merger savings.
In a regulatory filing on Monday, Warner Bros Discovery detailed how Zaslav and his leadership team plan to achieve the promised cost cuts, which will be substantially completed by the end of 2024.
The media company said it was expecting to book a pretax charge of US$1.3 billion to US$1.6 billion in the third quarter, much of it related to the removal of 36 titles from the HBO Max streaming service, including originals like the teen drama Generation and the animated anthology series Infinity Train.
Warner Bros Discovery said it anticipates US$800 million to US$1 billion in costs related to layoffs throughout the company, and another US$400 million to US$700 million by consolidating facilities.
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The company has undertaken a series of cost-cutting measures since the merger, including cancelling projects such as the live-action version of the DC Comics character Batgirl and a planned Wonder Twins film and shutting down the CNN+ streaming news service less than a month after its highly touted launch.
In its most recent quarterly report in August, the company had laid out a new strategy to merge the HBO Max streaming service with Discovery+, combining WarnerMedia’s dramas, comedies and movies with Discovery’s reality shows.
The company declined to say how the charges would impact its third-quarter results, due for release on Nov 3. Analysts polled by Refinitiv estimate a pretax loss of US$771 million.
Shares of the company were down 0.3 per cent in after-market trading. REUTERS
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