Thursday, December 8

Warner Bros Discovery expects up to $1.6 bln charge on scrapped content

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Media company Warner Bros Discovery on Monday said it was expecting to book a pre-tax charge of $1.3 billion to $1.6 billion in the third quarter, much of it related to content pulled from the streaming service HBO Max, such as “The Not-Too -Late Show with Elmo.”

AT&T Inc’s WarnerMedia unit and Discovery Inc completed their merger in April to form Warner Bros Discovery. The company’s chief executive, David Zaslav, promised investors he would realize $3 billion in post-merger savings.

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The regulatory details how Zaslav and his leadership team plan to accomplish the financial restructuring, which will be substantially completed by the end of 2024.

The company has undertaken a series of cost-cutting measures since the merger, including canceling projects such as the live-action version of the DC Comics character “Batgirl” and a planned “Wonder Twins” film.

The coming third-quarter will reflect the removal of 36 titles from HBO Max that failed to attract large audiences, including originals like the teen drama “Generation” and the animated anthology series “Infinity Train.”

In total, the company expects to write off as much as $2.5 billion in costs related to canceled projects.

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Warner Bros Discovery said it anticipates $800 million to $1 billion in costs related to layoffs throughout the media organization, and another $400 to $700 million by consolidating facilities.

In its latest 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.

Shares of the company were down 0.3% in after-market trading. (Reporting by Eva Mathews in Bengaluru; Dan Chmielewski in Los Angeles; Editing by Anil D’Silva, Josie Kao and David Gregorio)