Warner Bros. Discovery Friday detailed its charges for the second quarter which included a combined hit of $825 million on the content side, including $496 million for content impairment and $329 million for content development writedowns, as well as $208 million for employee layoffs for the three months ended June.
As reported Thursday, WBD reported a net loss of $3.4 billion (or $2.2 billion pro forma) in the first quarter as a combined company, recording $1 billion in restructuring and other charges (and $983 million in transaction and integration expenses). An SEC filing said today that “the content write-downs and development cancellations result from a global strategic review of content following the merger. Employee departures are linked to cost reduction efforts and management changes. These costs were the result of WM’s integration activities and the establishment of an efficient cost structure. »
Restructuring and other charges by segment were $200 million for studios, $308 million for networks and $475 million for DTC.
The filing did not specify the content — produced, in production, or in development — behind the writedowns. The fee would only apply to projects suspended before the end of June, with more being booked in subsequent quarters.
The high-profile cancellations across streaming and linear include a disconnect hit on CNN+. wonder twins for HBO Max was shut down in May. bat girl and Scoob: Holiday Haunt movies also scheduled for the streamer, have been dropped. HBO decided last month not to move forward with JJ Abrams’ HBO series Demimonde. TBS removed The big D and Kill the orange bear.
HBO Max has canceled Ellen DeGeneres’ preschool series Little Helen HBO and Chronicles of Gordita.
WBD executives confirmed yesterday that children and animated content on streaming and linear networks would be cut “without an adequate investment case against them.”
CEO David Zaslav has outlined his spending plans, especially on HBO, but with caution.
Of the layoffs, many more are likely. As Deadline reported, a first wave is expected this month, continuing into the fall. The staff cuts were not mentioned in yesterday’s presentation, but are part of streamlining the merged company, eliminating layoffs and reaching a $3 billion pledge or more cost synergies thanks to the agreement.