Warner Bros. Discovery Taking Up to $1 Billion More in Tax Write-Downs From Cancelled Content
The business decisions of Warner Bros. Discovery are continuing to make headlines, as CEO David Zaslav is aiming to trim billions of dollars of debt from its portfolio. One unique component of that business strategy has been cancelling, and often removing, shows and movies from its HBO Max streaming service — and it sounds like the returns are even higher than initially believed. According to a new securities filing on Wednesday (via The Hollywood Reporter), Warner Bros. Discovery is expected to take $2.8 billion-$3.5 billion in writeoffs and impairments related to content and development costs. This is nearly $800 million-$1 billion more than what the company had originally projected in October of this year.
"Content impairments and development write-offs resulted from a global strategic review of content following the Merger," Warner Bros. Discovery wrote in a filing from August of this year.
Why is HBO Max cancelling so many shows?
This detail comes after weeks of Warner Bros. Discovery cancelling and shelving HBO or HBO Max shows, including The Gordita Chronicles, Love Life, Minx, Legendary, FBoy Island, and Made for Love. Additionally, the streamer has decided to pull two popular HBO shows — Westworld and The Nevers — from the platform.
These patterns began with the cancellation of Batgirl and Scoob!: Holiday Haunt back in August. 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 in Q3 of 2022. In the days since, Warner Bros. Discovery removed six HBO Max-exclusive movies from their streaming platform, as well as a number of fan-favorite animated series. Anonymous sources alleged in August of this year that no existing show is safe from potentially being cancelled or written off, with Warner Bros. Discovery now making decisions on a case-by-case basis.
Will HBO Max and Discovery+ merge?
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.
What do you think of Warner Bros. Discovery's lates tax write-downs? Share your thoughts with us in the comments below!