As Warner Bros. Discovery shifts strategies from the AT&T era, the company’s decisions have proved disruptive for some talent.
Warner Bros. this week canceled the release of the DC superhero movie “Batgirl,” which was designed to be distributed through HBO Max as part of a broader plan to increase subscribers. The $90 million film had completed shooting and was in post-production, but fell victim the studio’s new corporate mandate after its merger with Discovery Inc. Warner Bros.
Discovery chief executive David Zaslav has been clear in his belief that movies made straight to streaming make little sense financially, and that films do better on streaming services after they debut exclusively in theaters. Still, the decision to shelve substantially completed movie is highly unusual for a studio. “Batgirl” directors Adil El Arbi and Bilall Fallah issued a joint statement Wednesday saying they were “saddened and shocked” by the decision. “We still can’t believe it,” they said.
“Batgirl,” starring Leslie Grace, was commissioned while Warner Bros. was under the control of AT&T and led by WarnerMedia CEO Jason Kilar, who wanted to use original movies to increase HBO Max’s subscriber count. AT&T spun off WarnerMedia, which merged with Discovery in a $43 billion deal that closed earlier this year.
The company also scrapped an animated “Scoob!” sequel that was planned for HBO Max and unceremoniously removed multiple straight-to-streaming films from the service, including Seth Rogen’s “An American Pickle” and Robert Zemeckis’ “The Witches.”
Zaslav emphasized his belief in theatrical box office as the best way to make money from movies and create a sustainable business.
“We will fully embrace theatrical, as we believe it creates interest and demand provides a great marketing tailwind and generates word of mouth buzz as films transition to streaming and beyond,” he said.
Zaslav, one of the highest-paid executives in corporate America, is seeking $3 billion in cost savings from the merger and more layoffs are expected as restructuring of HBO Max continues.
He’s shown little hesitancy when it comes to mothballing projects green lighted by his predecessor, as he showed when he quickly killed streaming service CNN+. Last week, the company cancelled the TBS political comedy show “Full Frontal with Samantha Bee.”
Warner Bros. Discovery reported second-quarter revenue of $9.83 billion, missing analyst estimates. Wall Street had projected $11.8 billion in sales, according to FactSet data. On a pro forma basis, revenues were down 3% from the combined revenues of the two companies during the same quarter last year.
The media giant reported a loss of $3.42 billion, or a loss of $1.50 a share. Analysts had projected profit of 12 cents a share. The loss included $1 billion in restructuring charges and $983 million in expenses related to the transaction and integration of the companies.
Shares fell 11% in after-hours trading.
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