Warner Bros Discovery says that its costs due to content write-offs could now reach up to $3.5bn, some $1bn more than previously anticipated.
Warner Bros. Discovery has announced a series of cost-cutting measures since the merger of AT&T Inc’s WarnerMedia unit and Discovery Inc.
This includes cancelling projects such as the live-action version of the DC Comics character Batgirl, a planned Wonder Twins film, and shutting down the CNN+ streaming news service.
It emerged this week that prestige HBO shows like Westworld and The Nevers are to be licensed to free, ad-supported streaming platforms.
The cut backs come after Wall Street began to question the business model of many streaming services this year, which are characterised by high content spending and low profitability.
WBD has implemented lay-offs and more are expected at the company’s large media and entertainment stable including CNN.
In October, Warner Bros. Discovery anticipated that it would incur total pre-tax restructuring charges of $3.2bn - $4.3bn related to its restructuring and transformation initiatives, which included content impairment and development write-offs of approximately $2.0 - $2.5bn.
In a filing with the US Securities And Exchange Commission, the company said it now expects to incur total pre-tax restructuring charges of $4.1 - $5.3bn, which includes $2.8 - $3.5bn of content impairment and development write-offs.
The company said the restructuring initiatives will be substantially completed by the end of 2024.
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