Warner Bros. Lifts Discovery Write-Down to $5.3B

The media giant slashes content production as restructuring costs mount

Podium bearing HBO logo in front of screen displaying WarnerMedia logo at an entertainment industry event.

Getty / Emma McIntyre

Media giant Warner Bros. Discovery Inc. (WBD) predicts write-downs and other restructuring costs could be as high as $5.3 billion, far more than previously estimated.

As recently as October, the company had anticipated total pre-tax restructuring costs to range from $3.2 billion to $4.3 billion. The revised estimate of $4.1 billion to $5.3 billion, disclosed in a regulatory filing Wednesday, reflects higher content impairment costs and development write-offs.

Key Takeaways

  • Warner Bros. Discovery raised its write-down estimate to as high as $5.3 billion on Dec. 14.
  • The company previously predicted these costs to be only as much as $4.3 billion.
  • Restructuring following the merger of Discovery Inc. and AT&T's WarnerMedia has included writing off film and television series and canceling production on others.
  • Batgirl, Wonder Woman, Minx, and Westworld are among the titles axed so far.

The company's restructuring process has included writing off some films and television shows as well as dropping others from development entirely. In August, executives scrapped the nearly-complete film Batgirl, and earlier this month news broke that production had halted on the next Wonder Woman film. Warner Bros. also pulled the plug on the comedy series Minx and removed the big-budget sci-fi series Westworld from HBO in recent weeks.

Warner Bros. Discovery said in October that it expected charges as high as $2.5 billion to write off films and shows and drop development on others. The increased estimate from December suggests it is planning to cancel more projects. The company reiterated its previous predictions for organization restructuring, contract termination, and other consolidation costs.

The conglomerate was created in April 2022 by the merger of Discovery Inc. and AT&T Inc.'s (T) WarnerMedia, home to media brands including HBO, CNN, and DC Comics. It now wrestles with completing restructuring—estimated to be finished by the end of 2024—while it loses cable TV customers to streaming rivals. In the latest quarter, the firm announced a decrease in pro forma advertising and distribution revenue due to entertainment and news audience declines and a drop in pay-TV subscriptions.

At 2:36 p.m. ET, Warner Bros. Discovery stock was down 8.47%.

Article Sources
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  1. Warner Bros. Discovery Inc. "Form 8-K," Page 2.

  2. Warner Bros. Discovery Inc. "Form 8-K/A (Amendment No. 1)," Page 1.

  3. Bloomberg. "Warner Bros. Discovery Lifts Writedown Costs to $5.3 Billion."

  4. Wall Street Journal. "Warner Bros. Scraps ‘Batgirl’ and Other Films Amid Broader Cost-Cutting Effort."

  5. Warner Bros. Discovery Inc. "Warner Bros. Discovery, Inc. Reports Third-Quarter 2022 Earnings Results," Page 3.

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