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Warner Bros. Discovery adds up to $1B more in content write-offs

Dec 15, 2022
Illustration of a television with static leaking out of it as if it were a liquid.

Illustration: Aïda Amer/Axios

Warner Bros. Discovery disclosed a $1 billion increase to its previous estimates of content write-off charges in an SEC filing Wednesday.

Why it matters: The company's efforts to cut costs and clean house at what was once WarnerMedia continue to dig deep as CEO David Zaslav pursues $3.5 billion in savings over the next three years.

Flashback: AT&T agreed to sell WarnerMedia to Discovery in a deal that valued the combined business at about $130 billion, including debt.

By the numbers: The SEC filing said that WBD's content impairment and development write-offs could be $2.8 billion to $3.5 billion, up from the previous estimate of $2 billion to $2.5 billion.

  • That means it's total pre-tax restructuring charges have increased to as much as $5.3 billion.

Meanwhile: WBD is pursuing licensing deals with other media companies to move some HBO series to competitive streaming platforms.

  • The shows moving off HBO Max include "Westworld," "The Nevers," "Raised by Wolves," "FBOY Island" and more.
  • WBD did not name the distribution partners but said they are "third-party FAST services," meaning free, ad-supported streaming television.

Yes, but: The shows could come back to HBO Max, perhaps once the company launches its own ad-supported model.

💭 Kerry's thought bubble: Licensing deals are common practice. But the reason this is shocking Hollywood is because it is HBO, which has cultivated its brand with exclusive prestige programming.

Of note: HBO Max programming isn't the only change. Zaslav's attempt to redo and improve the DC Universe is taking shape with "Wonder Woman" director Patty Jenkins speaking out on the end of her era and actor Henry Cavill sharing he will no longer play Superman.

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