Warner Bros. Discovery Lifts Writedown Costs to $5.3 Billion

(Bloomberg) — Warner Bros. Discovery Inc., the film and TV giant, expects to incur writedowns and merger-related costs of up to $5.3 billion, far above previous estimates as management continues to drop film and TV projects.

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The media conglomerate, created by the union of Discovery Inc. and AT&T Inc.’s WarnerMedia, had previously estimated such expenses at up to $4.3 billion. The new sum was disclosed in a regulatory filing Wednesday.

“The company’s restructuring efforts are ongoing and could result in additional impairments above the revised estimates,” Warner Bros. said in the filing. The restructuring won’t be substantially done until the end of 2024.

Management, led by Chief Executive Officer David Zaslav, is grappling with the difficult task of merging two media companies while their biggest source of revenue — the cable-TV industry — losing customers to online rivals like Netflix Inc. Their own streaming operations, while growing, aren’t making money.

Warner Bros. warned in October that significant post-merger costs loomed for the combined company, saying at the time it was expected to record charges of up to $2.5 billion to write off some films and TV shows and drop others in development.

The new total suggests the company is canceling or dropping additional projects. Warner Bros. said it’s not revising the previously disclosed estimates for organization restructuring costs, facility consolidation activities and other contract termination costs, or cash expenditures.

At 4:31 pm New York time, Warner Bros. Discovery was down 0.8% to $10.89 in postmarket trading.

(Updates with details of expenses starting in second paragraph.)

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