Warner Bros. Discovery Friday detailed its charges for the second quarter that included a combined $825 million hit on the content side, including $496 million for content impairment and $329 million for content development write-downs, as well as $208 million for employee terminations for the three months ended June.
As reported Thursday, WBD posted a net loss of $3.4 billion (or $2.2 billion pro forma) in its first quarter as a combined company, recording $1 billion of restructuring and other charges (and $983 million of transaction and integration expenses). An SEC filing today said that, “Content impairments and development write-offs resulted from a global strategic review of content following the Merger. Employee terminations relate to cost reduction efforts and management changes. These charges resulted from activities to integrate WM and establish an efficient cost structure.”
Restructuring and other charges by segment stood at $200 million for studios, $308 million for networks and $475 million for DTC.
The filing didn’t specify the content — either produced, in production or in development — behind the write-downs. Charges would only apply to projects shelved before the end of June, others will booked in subsequent quarters.
High-profile cancellations across streaming and linear include a hit from pulling the plug on CNN+. Wonder Twins for HBO Max was shut down in May. Batgirl and Scoob: Holiday Haunt movies also set for the streamer, were scrapped. HBO decided last month not to move forward with J.J. Abrams’ HBO series Demimonde. TBS axed The Big D and Kill the Orange Bear.
HBO Max canceled Ellen DeGeneres’ preschool series Little Ellen HBO and Gordita Chronicles.
WBD execs confirmed yesterday that kids and animation content across both streaming and linear networks would be cut “without an adequate investment case against them.”
CEO David Zaslav outlined plans to spend, especially on HBO, but carefully.
On layoffs, many more are likely. As The Hamden Journal reported, a first wave is expected this month, continuing into the fall. Staff cuts didn’t come up on the presentation yesterday but are part of streamlining the merged company, eliminating redundancies and hitting a promised $3 billion or more in cost synergies from the deal.