Warner Bros. Discovery Taking $3.2 Billion to $4.3 Billion in Q3 Charges

Warner Bros. water tower
The water tower at the Warner Bros. lot in Burbank, Calif. (Image credit: AaronP/Bauer-Griffin/GC Images)

Warner Bros. Discovery, restructuring to cut costs and pay down its massive debt, said it expected to report charges against third-quarter earnings of $3.2 billion to $4.3 billion. 

The charge will include an assessment against programming that would lead to content impairment and development write-offs of about $2 billion to $2.5 billion. 

Since Discovery acquired WarnerMedia from AT&T, new management led by CEO David Zaslav has canceled many projects in the Warner Bros. pipeline, including a nearly complete Batgirl film and movies being made for its HBO Max streaming service.

Organizational restructuring costs, including severance, retention, relocation and other related charges, will be between $800 million and $1.1 billion. The company has seen layoffs in nearly all of its divisions. 

Facility consolidation activities and other contract termination costs will be between $400 million and $700 million.

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, the company said.

“While the company’s restructuring efforts are ongoing, including the strategic analysis of content programming which could result in additional impairments above the estimate provided above, the restructuring initiatives are expected to be substantially completed by the end of 2024,” Warner Bros. Discovery said in an SEC filing.

The company plans to announce its third-quarter results on November 3. 

Warner Bros. Discovery reported a $3.4 billion second-quarter loss, which included  $2 billion in amortization of intangible assets, $1.033 billion in restructuring and other charges and $983 million of transaction and integration expenses involved in combining Discovery with WarnerMedia.

The company also cut its guidance for future earnings, blaming decisions and projections made at WarnerMedia that needed to be revised or reversed.

Warner Bros. Discovery shares fell 2.3% to close at $13.18 Monday. The shares are down from a 52-week high of $31.55. ■

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.