Warner Bros Discovery Inc (NASDAQ:WBD) has said its decision to scrap content such as "Batgirl," "The Not-Too-Late Show With Elmo" and other series and films will cost it as much as $2.5 billion, Reuters has reported.
The newly combined media company said that the massive costs associated with cutting content will make up a significant part of a total $3.2 billion to $4.3 billion in charges related to its financial restructuring, the newswire added.
AT&T Inc's WarnerMedia unit and Discovery Inc completed their merger in April to form Warner Bros Discovery. The company's chief executive, David Zaslav, promised investors he would realize $3 billion in post-merger savings.
In a regulatory filing on Monday, Warner Bros Discovery detailed how Zaslav and his leadership team plan to achieve the promised cost cuts, which will be substantially completed by the end of 2024, Reuters noted.
The media company said it is expecting to book a pretax charge of $1.3 billion to $1.6 billion in the third quarter, much of it related to the removal of 36 titles from the HBO Max streaming service, including originals like the teen drama "Generation" and the animated anthology series "Infinity Train."
Warner Bros Discovery said it anticipates $800 million to $1 billion in costs related to layoffs throughout the company, and another $400 million to $700 million by consolidating facilities., Reuters said.
The company has undertaken a series of cost-cutting measures since the merger, including canceling projects such as the live-action version of the DC Comics character "Batgirl", and shutting down the CNN+ streaming news service less than a month after its highly touted launch.
In its most recent quarterly report in August, the company had laid out a new strategy to merge the HBO Max streaming service with Discovery+, combining WarnerMedia's dramas, comedies and movies with Discovery's reality shows.
Reuters said the company declined to comment on how the charges would impact its third-quarter results, due for release on November 3., with analysts polled by Refinitiv estimating a pretax loss of $771 million.