Batgirl’s Cancellation Illustrates Warner Bros. Discovery’s Current Culture of Cost-Cutting

When you’re looking for any cost savings you can find, everything must go.

It started small yesterday, as a story in the New York Post, which isn’t the most reliable source of news. Warner Bros. Discovery was shelving Batgirl, the DC Universe film that was planned for release on the HBO Max streaming service sometime this year. That story was later backed up by The Wrap, but people still had questions. Would the newly-merged Warner Bros. Discovery really cancel a film that was mostly finished? It just didn’t sound right.

The news was later confirmed by veteran trades like Variety and The Hollywood Reporter. Batgirl has been entirely shelved with no planned release on any platform. That’s a $70-90 million film that’ll never see the light of day. THR also noted that the $40 million animated feature Scoob!: Holiday Haunt was also getting cut.

It’s a shocking move for Warner Bros. Discovery. “A minute after this story posted got a call from a rival studio exec who was floored by [the] move. ‘Worked in this town for three decades and this is some unprecedented shit right here,’” tweeted Deadline reporter Justin Kroll. It’s not an entirely unexpected move, however. Especially if you look back at the merger of Warner Bros. and Discovery.

Passing On Debt

Warner Bros. Discovery was formed in April of this year, when telecom giant AT&T decided to get out of the content business, spinning off Warner Bros. into its own company. That entity merged with Discovery, Inc., the company behind channels like Food Network and HGTV. Discovery president and CEO David Zaslav took control of the merged company and immediately started to make changes.

The issue with the merger was AT&T decided to leave a large amount of debt with Warner Bros. The combined company has around $57 billion in debt, with Zaslav promising to cut costs by around $3 billion to stem the bleeding. Some analysts have called that number too conservative, saying that WBD could find around $4-5 billion in cost savings.

It didn’t help that under prior management, WarnerMedia CEO Jason Kilar, the company spent a ton of cash to make premium content for the HBO Max streaming service. In contrast, Zaslav’s Discovery and Discovery+ were heavily invested in unscripted reality TV shows, which are wildly successful and much cheaper to produce. Basically, the management for Warner Bros. Discovery is used to a business model that doesn’t require as much spending, while also shouldering the burden of substantial debt on its back.

HBO Max 2021 Slate

The Business Of Looking Under Couch Cushions

Once Zaslav fully took over, the cuts began in earnest, starting with redundancies. Anytime you have a merged company, you’ll have multiple sets of employees doing the same job. Some stay and some are cut off completely, with the survivors usually leaning toward those already aligned with the new management.

That’s how it’s shaken out at Warner Bros. Discovery. WarnerMedia CEO Jason Kilar and Warner Bros. CEO Anna Sarnoff were out immediately. They were followed by a number of c-level executives on the Warner Bros. side of things. The remaining executives included HBO/HBO Max chief content officer Casey Bloys, Warner Bros Picture Group chairman Toby Emmerich, and Warner Bros Television Group chairman Channing Dungey. Emmerich would be gone two months later.

The cuts weren’t just for executives though. Warner Bros. Discovery cut scripted programming at Warner networks TNT, TBS, and TruTV, leaving those networks to focus on unscripted shows and sports. Around 30% of the ad sales team at the merged company was slashed, leading to nearly 1,000 layoffs. HBO Max recently canceled the family comedy series Gordita Chronicles, noting that “live-action kids and family programming will not be part of our programming focus in the immediate future.” This is only the start, however, with Deadline reporting that the company is expected to have major cuts starting in August and stretching to Thanksgiving.

“I don’t think I’ve ever seen someone come in and look to just outright gut a company like this,” a Warner employee told Deadline.

It’s in this environment that Batgirl’s “unprecedented” cancellation is happening.

Management Believes in DC Films, Just Not These DC Films

Earlier reports pointed toward Batgirl’s cancellation being related to the quality of the film itself. Later reports from Variety mentioned insiders who said that issue was scope and scale; Zaslav wants DC to be a blockbuster production studio and Batgirl didn’t fit the bill. A further report stated that WBD didn’t see Batgirl as worthy of a theatrical release in its current form. It would’ve been prohibitively expensive for reshoots and marketing, while also being too expensive to make financial sense for HBO Max. Instead, the studio is positioning it as a tax write-down.

Zaslav believes heavily in DC Comics as a brand. In fact, he sees it as one of Warner Bros. Discovery’s key pillars, similar to Marvel Studios’ place within Disney.

“Over the last few months, Toby and I have been talking about the best structure for Warner Bros. Pictures Group and the idea of creating three distinct film segments around Warner Bros. Pictures/New Line Cinema, Warner Bros. Feature Animation, and DC-Based Film Production. I have greatly appreciated his insight and partnership throughout this process and feel confident this is the right strategy for our company going forward,” Zaslav said in a memo announcing Emmerich stepping down from his position.

Zaslav has consulted with former Disney CEO Robert Iger on restructuring WBD, with Iger being the man behind the Disney acquisition of Marvel Entertainment. Iger placed producer Kevin Fiege at the head of the brand and Zaslav is looking to find a similar figure for DC Films. While he waits for the right candidate, the overall direction of the line is… uneven.

Batgirl 2022 Concept Art

Waiting For a Flash of Inspiration

DC Films has a number of films ready for release, but no real plan for the future. Black Adam is coming on October 21, 2022, while Shazam: Fury of the Gods is being sent out against Avatar: The Way of Water this holiday season. It took that spot from Aquaman and the Lost Kingdom, which got pushed back to a crowded March 2023 against Dungeons & Dragons: Honor Among Thieves, Creed III, and John Wick: Chapter 4.

The big question mark is The Flash, a film that was scheduled for release this year in June but got pushed back to June 23, 2023. The Flash is a key part of the new DC film universe, marking a transition from the one established by Zack Snyder’s films. Unfortunately, it’s also cursed. The Flash originally began development in 2004, but the real starting line was in 2013, when Warner Bros. announced a Flash solo film as a part of the DC Extended Universe.

Since then, The Flash has had five directors and seven screenwriters. (The final film was directed by Andy Muschietti and based on a script by Christina Hodson.) Former Batman Michael Keaton joined the cast for a film based roughly on the comic crossover event Flashpoint. Everything looked good and then lead actor Ezra Miller started causing controversy. Now, Warner Bros. has a keystone film it cannot promote, as evidenced by the film not even being mentioned during the studio’s presentation at the recent San Diego Comic-Con.

That’s not to say that DC Films has nothing! Sequels for Joker and The Batman are in the works, Peacemaker was fantastic, and Harley Quinn Season 3 just started airing on HBO Max. But the release schedule is uneven and Zaslav wants to get that under control. Warner Bros. Discovery wants big beefy blockbusters for Batman, Superman, Wonder Woman, and the rest. Apparently, a smaller Batgirl film didn’t fit within that vision.

An Ongoing Crisis

Zaslav is trying to save money and anything that doesn’t 100% fit his new vision of the company is on the chopping block. And given that he’s willing to shelve a mostly completed film, everything is on the table in terms of cuts.

The question is, what survives Zaslav’s vicious cost-cutting spree? We haven’t heard anything about the Green Lantern series for HBO Max recently. That’s being produced by Greg Berlanti, who has seen his Arrowverse projects get hacked to death over at the CW. Is something like a second season of Peacemaker not “blockbuster” enough for Zaslav? What about Blue Beetle, the film that was announced as an HBO Max Original like Batgirl, before being moved to a theatrical release? J.J. Abrams has projects for Zatanna and John Constantine in production, but Zaslav already cut his expensive original show Demimonde.

And given that we here at Fanbyte are largely focused on video games, you have to look at Warner Bros. Interactive Entertainment, the gaming division. Rocksteady Studios has Suicide Squad: Kill the Justice League coming in 2023, but it hasn’t delivered a game since 2015’s Batman: Arkham Knight. Monolith Productions’ Wonder Woman game is likely years away. WB Montreal’s Gotham Knights looks decidedly average, so it’s hard to judge how that’s going to sell. And Avalanche Software is hoping Hogwarts Legacy is a hit so that it doesn’t end up in the same place it did under Disney Interactive.

The shining graces of the division are Netherrealm Studios, the stewards of Mortal Kombat, and TT Games, who just had a hit with Lego Star Wars: The Skywalker Saga. Is this enough for Warner Bros. Discovery to keep its gaming division around? (Probably not.) Square Enix just got rid of its similarly-placed Western studios and Zaslav consultant Bob Iger is the guy who outright killed Disney Interactive and moved the company to a licensing model. It’s likely he’s telling WBD’s CEO to do the same.

Batgirl isn’t the first major cut at Warner Bros. Discovery and it won’t be the last. The company has to find $3 billion in savings and that means everything must go. Zaslav will hack-and-slash until he has a leaner, meaner company that can stand toe-to-toe with Disney and NBCUniversal, but hopefully without spending too much. It’s just a matter of where those cuts are going to come from.