Content write-offs add another billion dollars to WBD restructuring costs

Westworld (courtesy of HBO)

Warner Bros. Discovery has significantly increased its estimates on how much the company’s current pivot to streaming is going to cost. With the US TV sector gripped by a series of high profile show cancellations, WBD made an SEC Filing in which it said total pre-tax restructuring charges would now be in the range of $4.1-$5.3bn. In October, the company estimated this figure would be between $3.2-$4.3bn.

Almost all of the revised upward estimate is down to content write-offs. The previous estimate included “content impairment and development write-offs of approximately $2.0-$2.5 billion”. The Company now expects that figure to be between $2.8-$3.5bn.

Tellingly, WBD said it is “not revising previously disclosed estimates for organisation restructuring costs, facility consolidation and other contract termination costs.”

The company doesn’t expect the cost revisions to change its restructuring timetable – which makes sense given that it is primarily about cancelling shows. However it did warn that there could be “additional impairments above the revised estimates”.

In practical terms, WBD’s restructuring has resulted in widespread editorial job losses and the cancellation of shows like Nevers and Westworld. The move is part of a wider cancellation trend that has also seen AMC axe Moonhaven, Starz drop Dangerous Liaisons and Netflix wrap up Warrior Nun. AMC’s interim chief James Dolan complained recently that the monetisation of content is currently “in disarray”.

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