Warner Bros. Discovery Takes $825M Writedown on Content Following High-Profile DC Cuts and TBS-TNT Cancellations

How a lot Warner Bros. content material? Has Discovery eliminated for the reason that WarnerMedia merger only a few months in the past? $825 million.

The corporate revealed in a regulatory submitting on Friday that it had written down $825 million on content material because of the deal. This determine features a $496 million write-down on content material, in addition to content material improvement write-offs of $329 million.

“The content material write-downs and improvement cancellations resulted from a worldwide strategic overview of content material following the merger,” the corporate wrote within the submitting.

The impairment and write-off figures have been damaged down into the corporate’s studio enterprise (which incorporates movie and tv studios), its networks enterprise (which incorporates linear tv networks), and its DTC enterprise, which incorporates streaming companies like HBO Max and Discovery+. Content material write-downs have been for applications that had already been produced or have been in manufacturing, and improvement write-offs have been for content material that was nonetheless in improvement.

And that dramatic determine in all probability does not embody bat lady The place Scoob! : The vacation hang-out, two movies that till this week have been scheduled to debut on the HBO Max streaming platform. (These movies will almost certainly be booked for the subsequent quarter.) This might, nevertheless, embody an impairment associated to the movie surprise twinsone other DC mission for HBO Max that was in preproduction and was shut down in Might, earlier than the top of the second quarter.

The filmmakers of bat lady have been knowledgeable that the mission wouldn’t be transferring ahead anytime quickly this month, though it’s effectively into post-production. Firm sources have indicated that it plans to carry the movie for tax functions, and the writedowns disclosed on Friday would assist that.

The second-quarter writedown possible consists of a lot of applications that have been axed at TBS and TNT, in addition to prices associated to CNN+, the ill-fated streaming service that WBD shut down simply weeks after launch. The submitting additionally famous that the corporate had $208 million in worker termination prices throughout the quarter.

TBS and TNT have considerably decreased their programming for the reason that merger, focusing as a substitute on sports activities and unscripted fare. TBS Lower Comedies Chad (which had already accomplished the manufacturing of its season), Full frontal with Samantha Beeand Tracy Morgan The final OGwhereas TNT introduced an finish date for snowdrops. Scripted improvement on each networks was halted, and the corporate elected to not renew its deal to air the SAG Awards.

Throughout the firm’s earnings name on Thursday, WBD streaming chief JB Perrette stated youngsters and animated content material for linear and streaming films, direct-streaming films and reveals for TBS and TNT have been primarily liable for content material recalibration, “significantly content material spending on [Turner] reveals that lacked the flexibility to generate enough rankings or additional monetization potential. »

WBD, led by CEO David Zaslav and chief monetary officer Gunnar Wiedenfels, stated it was in search of some $3 billion in value financial savings over the subsequent few years associated to the merger. These financial savings will come within the type of merging expertise techniques and workplaces, in addition to layoffs, although rethinking how and the place it spends cash on content material is clearly a part of the plan as effectively.

“Having the content material that basically resonates with folks is way more vital than simply having quite a lot of content material,” Zaslav stated throughout the firm’s earnings name on Thursday.

“We’ll proceed to have wholesome investments in content material, however with the merger of those two content material portfolios, we see sensible alternatives to do that at a way more measured tempo than in earlier plans,” Perrette added. “These are robust choices, however we’re dedicated to being disciplined on a framework that guides our funding in content material for max return.”