Investors, staffers brace for Warner Bros. Discovery earnings, news of potential cuts and future of HBO Max
By Matt Collins Article may include affiliate links
As Warner Bros. Discovery prepares to release the first earnings results since it was formed from the combination of WarnerMedia and Discovery, analysts are keeping an eye on how the company might cut costs and how it plans to move forward with its streaming strategy.
This comes on the heels of news that WBD was canceling the release of feature films “Batgirl” and “Scoob!: Holiday Haunt” despite both nearing completion. The projects had been expected to debut on HBO Max and some were left scratching their heads on why the plug was pulled when so much had already gone into the films.
A separate Variety report suggested canceling the project could have tax benefits for the company that might not be possible if the films were released publicly. It’s relatively rare for projects to get canceled that far in the production process — with films that aren’t expected to perform well released without significant marketing investments or sold off to another company.
As part of the merger, the combined WBD was expected to cut $3 billion in costs through 2023. This could include a 70% cut in the company’s development team, according to The Wrap.
Insiders say that major changes to HBO Max and Discovery+ are likely to be announced soon. Prior to the merger, execs had expressed interest in combining the two streamers, which were both launched when the companies were separate from each other and, depending on what strategy is being considered, could be seen as duplicative.
The Wrap reports that HBO Max will be “gutted” by significant layoffs as the streaming operations get merged.
There have also been some rumblings that, assuming WBD combines HBO Max and Discovery+, the resulting platform could get a rebrand.
HBO Max takes its name from the WarnerMedia brand that was originally conceived as a way to distribute feature films via premium cable but has since branched out into producing its own programming, many of which would become major hits and might not fit well with the reality and non-fiction focus that Discovery+ has built itself around.