Warner Bros. Discovery on Friday detailed its second-quarter expenses, which included total losses of $825 million on the content side, including $496 million for content impairments and $329 million for amortization in development of Content and $208 million for employee terminations for the three months ended June.
As reported Thursday, WBD reported a first-quarter net loss as a combined company of $3.4 billion (or $2.2 billion pro forma) and recorded $1 billion in restructuring and other charges (and $983 million in transaction and integration costs). A filing filed with the SEC today said, “Content impairments and development writedowns resulted from a global strategic post-merger review of content. Employee terminations are related to cost-cutting efforts and management changes. These burdens result from activities for WM integration and 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—either produced, in production, or in development—after the write-offs. Fees only apply to projects that are put on hold before the end of June, others will be booked in the following quarters.
High-profile cancellations at Streaming and Linear include a hit because CNN+ pulled the plug. Wonder Twins for HBO Max was canceled in May. Batgirl and Scoob: Holiday Haunt movies that were also made for the streamer have been scrapped. HBO decided last month to discontinue JJ Abrams’ HBO series Demimonde. TBS canceled The Big D and Kill the Orange Bear.
HBO Max has canceled the preschool series Little Ellen HBO and Gordita Chronicles by Ellen DeGeneres.
WBD executives confirmed yesterday that children’s and animation content would be cut across both streaming and linear networks “without a proper investment case against them.”
CEO David Zaslav outlined spending plans, especially for HBO, but cautiously.
Layoffs are even more likely. As Deadline reported, a first wave is expected this month that will last into the fall. Staff cuts were not discussed at yesterday’s presentation but are part of the streamlining of the combined company, eliminating redundancies and achieving the promised $3 billion or more in cost synergies from the deal.