Warner Bros. Discovery Takes Major Tax Write-Down Amid Recent Content Cancellations
Warner Bros. Discovery has taken a $825 million tax write-down on its cancelled and scrapped content, according to a recent regulatory filing. The newly-minted company disclosed the information in documents on Friday (via The Hollywood Reporter), revealing that the number comes from content that was cancelled or axed completely in Q2 of this year. That figure reportedly includes a $496 million impairment on content, representing content that had already been produced or was in production before being axed. It also includes $329 million in content development write-offs, representing programming that did not make it past the development stage. The content is question hails from Warner Bros. Discovery's various film and television studios, linear networks, and streaming services like HBO Max and Discovery+.
"Content impairments and development write-offs resulted from a global strategic review of content following the Merger," Warner Bros. Discovery wrote in the filing.
This number reportedly does not include the recent cancellations of Batgirl and Scoob!: Holiday Haunt, which were first made public earlier this week. Both films, which were already completed and were set to debut on HBO Max, were later reported to be canned for the sake of tax write-downs, which will seemingly be recorded next quarter. In the days since, Warner Bros. Discovery has also removed six HBO Max-exclusive movies from their streaming platform, and cancelled the already-completed third season of Little Ellen.
According to reports, this Q2 number might encompass the cancelling of DC's HBO Max-exclusive Wonder Twins movie, which was suddenly shut down in May of this year after spending months in pre-production. The film would have starred KJ Apa and Isabel May as the titular superhero twins. The Q2 number might also include a number of programming cancellations at TNT and TBS, both of which are suspending development of new scripted programming following the merger. It also could include CNN+, a streaming service that was shut down just weeks after it launched.
This all comes as Warner Bros. Discovery CEO David Zaslav reportedly aims to cut $3 billion from the company's budget over the next few years. The company has already announced plans to merge HBO Max and Discovery+ into a single streaming service, which will hypothetically occur as early as the summer of 2023.
"Owning the content that really resonates with people is much more important than just having lots of content," Zaslav said on Warner Bros. Discovery's quarterly earnings call earlier this week.
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