Warner Bros. Discovery Will Take Up To $4.3 Billion In Restructuring Charges From Merger

Warner Bros. Discovery will take a hit of between $1.3 billion and $1.6 billon in pre-tax restructuring charges for the third quarter ended in September as part of the ongoing merge of its operations, primary from content write-downs.

It said in an SEC filing it plans to complete its restructuring initiatives by the end of 2024 with total charges coming in between $3.2 and $4.3 billion. That includes “strategic content programming assessments” leading to content and development write-offs of approximately $2 to $2.5 billion.

The charges, which also include organization restructuring, facility consolidation activities and other contract termination costs, is part of the merged company’s plan to achieve significant $3 billion cost synergies it promised Wall Street.

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The company took a $1 billion restructuring hit in the second quarter, including over $800 million in content and development.

Layoffs have been rolling out across divisions. Warner Bros Television is axing more than a quarter of its workforce amid changes in unscripted and animation. HBO and HBO Max laid off 14% of staff in August and cuts have targeted streaming and marketing.

Series have been scrapped or canceled, including Full Frontal With Samantha Bee. Nearly finished HBO Max film Batgirl was an early casualty under CEO David Zaslav.

In addition to content and development impairments, total write-downs include $800 million to $1 billion in organization restructuring costs, including severance, retention and relocation; and $400 to $700 million in facility consolidation activities and other contract termination costs. Of the total amounts above, the company said, the estimated cash expenditures from the organization restructuring, facility consolidation activities and other contract termination costs will be in the range of approximately $1 billion to $1.5 billion

Warner Bros. Discovery closed its merger in April and first introduced the combined company to investors and the industry during a rocky quarterly earnings call and presentation in August with a big net loss, disappointing revenue, high debt and a slower outlook for streaming. CFO Gunnar Wiedenfels called 2022 a transition year and said that a full look at the combined numbers, possible only after the deal was closed, required adjustments forecasts for this year and next.

The stock took a nosedive. It closed down 2.3% today at $13.18.

The company will report its third quarter earnings Nov. 3.


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