Batgirl Only the Start of Warner Bros Write Offs

 It appears that the controversial cancellation of the Batgirl film will not be the only big-budget write off we see from the restructuring efforts at the newly minted Warner Bros Discovery. Just this week we see an announcement of up to $2.5B in further write offs coming. Brandon Blake, the entertainment lawyer with Blake & Wang P.A, elaborates on the news.

                                                                     Brandon Blake

Pre-Tax Restructuring Charges

We always knew that the integration of two key companies in the entertainment landscape would come with changes. However, the newly-formed Warner Bros Discovery is pulling no punches. Somewhere between $3.2B and $4.5B in write offs will fall in its fiscal Q3. The projected $2B-$2.5B will come from its pipeline content, with the remainder comprised of other key restructuring costs, including office and facility consolidation and, of course, the severance packages accompanying its widespread layoffs. 

 

Nor will the steep content write-offs- euphemistically termed  “strategic content programming assessments” come to an end with the fiscal quarter. More are expected in Q4.

Restructuring the Balance Sheet

Currently, we are traveling on an end-2024 cut-off for the balance sheet restructuring, we also see their estimated cash expenditures on these activities rack up into the $1.5B range, with a further $1b in pre-tax restructuring changes from last quarter. Needless to say, these sweeping changes, with little growth attached, have not done much for the already-ailing WBD stock, either. 

Warner Bros. Discovery are hoping to not only synergize costs, but also kill up to $3B in debt within the 24 months post-merger. Many were very surprised to see the $80M Batgirlmovie canned, alongside several underperforming projects for film and TV. In addition to the nearly 300 staff members cut from the organization in the last few months, this isn’t perhaps what we first envisioned from the merger. Whether it’s needed and productive, however, remains to be seen- and we will see some of it on Thursday, Nov 3rd, as they release their full Q3 reports.