How much content does Warner Bros. Discovery scrapped since its merger with WarnerMedia just a few months ago? Worth $825 million.
The company announced in a regulatory filing Friday that it has taken an $825 million write-off on content following the deal. That figure includes a $496 million write-down on content, as well as a $329 million write-off on content development.
“Content reductions and development write-offs were the result of a global strategic review of content after the Merger,” the company wrote in the filing.
The write-downs and write-downs were spread across the company’s studio business (including its film and TV studios), its network business (including its linear TV networks), and its DTC business, including streaming services such as HBO Max and Discovery+. The content limitations were for programs that had already been produced or in production, and the development depreciations were for content still in development.
And that dramatic figure probably doesn’t include batgirl or Scoob!: Holiday Haunt, two films set to debut on the HBO Max streaming platform until this week. (Those movies will most likely be accounted for next quarter.) However, it would include a write-off related to the movie Wonder Twinsanother DC project for HBO Max that was in pre-production and that was canceled in May, before the second quarter ended.
The filmmakers of batgirl were told earlier this month that the project would not proceed despite it being well into post-production. Sources at the company indicated it plans to shelve the film for tax purposes, and the write-offs announced Friday would support that.
The second-quarter write-off likely includes some programs discontinued from TBS and TNT, as well as costs related to CNN+, the ill-fated streaming service that WBD shut down just weeks after launch. The filing also noted that the company had $208 million in employee layoffs in the quarter.
TBS and TNT have cut back significantly on programming since the merger, leaning instead on sports and unwritten fare. TBS cut comedies Chad (which was already in production during the season), Full frontal with Samantha Beeand Tracy Morgan’s The last OGwhile TNT announced an end date for snow piercer. Script development on both networks was interrupted and the company chose not to renew its deal to broadcast the SAG Awards.
During the company’s earnings call on Thursday, WBD streaming chief JB Perrette said that children and animation content for linear and streaming, direct-to-stream movies and shows for TBS and TNT are most responsible for the content recalibration, “particularly.” the content published to [Turner] shows that had no path to generate sufficient ratings or incremental monetization potential.”
WBD, led by CEO David Zaslav and CFO Gunnar Wiedenfels, has said it is targeting approximately $3 billion in cost savings over the next few years as a result of the merger. Those savings will come in the form of merging technology systems and offices, as well as layoffs, but rethinking how and where it spends money on content is clearly part of the plan, too.
“Owning content that really engages people is much more important than just having a lot of content,” Zaslav said during the company’s earnings call on Thursday.
“We will continue to make healthy content investments, but with the coming together of these two content portfolios, we see smart opportunities to do this at a much more moderate pace than in the previous plans,” added Perrette. “These are tough decisions, but we are committed to being disciplined about a framework that guides our content investment for maximum return.”