Warner Bros. Discovery frontman David Zaslav takes no prisoners, but will take tax breaks.
“Moonshot” starring Cole Sprouse and Zach Braff, “Superintelligence” starring Melissa McCarthy (and written by her husband Ben Falcone), the 2020 remake of “The Witches,” “An American Pickle” starring Seth Rogen,” Locked Down” starring Chiwetel Ejiofor and Anne Hathaway, and a Sundance title “Charm City Kings” were the ones that were notably deleted from HBO Max in recent months. Also permanently sidelined is LeBron James and Maverick Carter’s “House Party” reboot, which was scheduled to premiere July 28 on HBO Max but never premiered.
A person with knowledge of the decision told IndieWire of the six films in question, as first discussed in a reddit thread and reported by Variety, are part of a long list of movies and series being pulled from HBO Max and Discovery+ as executives at Warner Bros. Discovery prepare to turn two SVOD (subscriber video on demand) services into one. The content sought to be removed tends to be shows and movies that don’t work on the service but have the opportunity to be partially canceled.
Content costs may be amortized, or assigned a cost that an entity recognizes over several years, over the expected useful life of the program or movie. If there are years left on that timeline, a business can remove that asset from the distribution and use its remaining cost balance to offset taxable income elsewhere. (There’s also a nonmonetary advantage to cleaning house, according to our source: The service is more likely not to overwhelm subscribers with content choices.)
The accounting practice is not new, but it is under the microscope at the moment, especially given the Bombshell of “Batgirl”. On Tuesday, Warner Bros. Discovery’s decision to directly cancel the release of the completed film (save for some reshoots), straight to broadcast”Bat girlshocked Hollywood. With options to release DC Comics’ Leslie Grace-starring Max movie as planned, or to invest tens of millions more and go into theaters, David Zaslav chose none. So you’ll never see that movie, which included the return of Michael Keaton as Batman, and Zaslav’s accountants probably didn’t see their families for weeks, realizing that.
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The HBO Max movie streaming cleanup is another example of differentiating strategies between new boss Zaslav and old boss Jason Kilar. Zaslav, who oversees the entirety of Warner Bros. Discovery, has the unenviable (and somewhat self-imposed) task of identifying $3 billion in cost-saving synergies between his now-merged former company, Discovery, Inc., and WarnerMedia. Kilar was immediately shown the door, as were some of his projects (Do you remember CNN+?) and its focus on transmission.
Kilar was so enamored with the possibilities of streaming that he ordered all 2021 Warner Bros. theatrical releases to catch up with HBO Max. The decision, which of course counted Covid and the box office recovery as a factor, was not popular with movie exhibitors and talent. By the end of Kilar’s career, HBO and HBO Max combined for nearly 77 million subscribers. Zaslav’s Discovery+ had 24 million subscribers at the time.
The person we spoke to for this story said that Warner Bros. streaming-exclusive movies are not subject to disproportionate removal from HBO Max. And it certainly won’t all be erased: take the new version of “Father of the Bride,” for example. The Andy Garcia-Gloria Estefan version has done well on HBO Max, so stick with HBO Max. Media analysts — and fair media — will get an explanation of the strategy during Warner Bros. Discovery’s second-quarter earnings conference call on Thursday afternoon, we’re told.