An email came in yesterday from a TV writer: “You should know that, on multiple writer text chains, people are calling him Zaslav The Butcher.” This person was referring, of course, to David Zaslav, the Warner Bros. Discovery C.E.O. who in less than four months atop HBO Max, Warner Bros., and all those cable channels, has quickly become known for his slash-and-bash strategy. Scripted shows on TBS and TNT? Gone. Kids stuff and animation on HBO Max? Disappearing. CNN+? RIP+. And that was before he started reshaping the Warner Bros. movie studio.
Hence this batshit Batgirl situation. Is there a greater indignity for a filmmaker than a studio telling you it would rather take a tax deduction than release your $90 million movie? It’s not just that co-directors Adil El Arbi and Bilall Fallah had nearly finished the film, or that it was based on DC characters, Warners’ most prized I.P. This is a freaking Batman movie, featuring the O.G. Dark Knight, Michael Keaton. Can you imagine if Disney C.E.O. Bob Chapek just scrapped a nearly-finished Marvel film? Bedlam. Chapek and his new beard would be beaten to a pulp by crazed fans with Thor hammers.
Come to think of it, has a film with Batman ever failed to generate an audience? Diminished returns, maybe, but the fans show up. The Batgirl test screening scores were lower than recent DC fare, I’m told. And I talked to someone who attended a screening and said it played like a CW pilot: low stakes, thin characters, light action, and a twisty, convoluted plot. When viewers were asked after the screening if the movie felt “big”—Warners’ effort to discern whether it could justify the elevated budget by releasing it theatrically—they emphatically responded “no,” according to this source. Meaning no amount of reshoots or C.G.I. would polish this direct-to-video turd into a theatrical diamond.
That’s not necessarily DC chief Walter Hamada’s fault; he was making the pricey streaming movie that Jason Kilar, the former WarnerMedia C.E.O. under AT&T, and Toby Emmerich, the ex-Warners film chief, told him to make. A $90 million CW pilot was the strategy, not an anomaly, though presumably they asked Hamada to make it a good CW pilot.
But now, like so many recent pivots at Warners under its various owners, there’s a new leader and a new strategy. Less Netflix-style volume, more HBO-style quality (but broader!), and superhero movies should be events for theaters first. Zaslav and C.F.O. Gunnar Wiedenfels, the Butcher’s Hatchet Man, both newcomers to the film business, just aren’t going to spend that amount of money on direct-to-streaming movies. “We cannot find an economic case for it,” Zaslav said on the company earnings call today. What he really means is that the stock market no longer values wild spending for sub growth. And he’s got so many financial pressures to deal with.
It’s no coincidence that on the same call, Zaz also disclosed weaker revenue results and projections, the company’s still-heavy debt obligations, and a 2023 EBITDA expectation that dropped from $14 billion during the combination of the Warner and Discovery assets to $12 billion today. The WBD stock dipped double-digits after hours, despite the tease that HBO Max and Discovery+ will become one yet-to-be-named superservice next summer, with the goal of hitting 130 million paid subs by 2025. In that grim context, does Zaslav really need to make a Wonder Twins movie or Little Ellen, an animated series about a pint-sized Ellen DeGeneres? No, he does not.
The problem, of course, is that by axing an almost finished Batgirl movie (and the less pricey Scoob! sequel), he’s sending a clear message to the town: Come work with us, just know we will murder your movie in cold, cold blood if we can save a few bucks. On the call today, Zaslav, the career cable TV guy, said the most important “pillar” of his strategy is “attracting the best storytellers.” If my inbox is any indication, it’s safe to say that many creatives don’t believe him. As TV writer Aaron Serna asked, “Does anyone know how many act breaks are in a tax write-off?”
That’s why it was a bit surprising to see CAA, the agency home of the Batgirl filmmakers—as well as star Leslie Grace, and now, via the ICM Partners acquisition, Keaton—staying mum. After the deployment of Project Popcorn, wherein Kilar decided to drop the entire 2021 movie slate day-and-date on HBO Max, CAA and WME leaders went very public with their displeasure. And that narrative dogged Kilar until the day he stepped down. This move is arguably worse—simply tossing various clients’ creative work in a dumpster—yet CAA and the various guilds have been quiet.
Unlike Kilar, Zaslav did give CAA’s Bryan Lourd a heads up in advance, I’m told, and the new film chiefs Mike De Luca and Pam Abdy followed up by making the phone calls to talent before the New York Post broke the news Tuesday. Lourd knows Zaslav is in a tough spot on the financials, and who knows what kind of promises were made on that call—after all, it wasn’t that long ago that Lourd was acting as Zaz’s L.A. consigliere—but the talent must be wondering why the Hollywood power-agency couldn’t prevent this outcome.
Because, as several film veterans have reminded me, you never know what will hit. Remember back in 2008, when all the major studios were questioning their commitment to Miramax-style specialty movies, Warners “dumped” the nearly-finished Slumdog Millionaire on Fox Searchlight—and it proceeded to make $378 million worldwide and win eight Oscars. More recently, Venom tested so poorly that a Sony executive told me they thought it might be among the worst movies the studio had ever made. Boom: $856 million worldwide.
None of that mattered for Batgirl, a movie that might be called the martyr for the waning days of the Peak TV streaming wars. A $90 million (with Covid costs), direct-to-streaming superhero movie probably never would have happened if AT&T’s Randall Stephenson and John Stankey had not decided that they could leverage HBO to both challenge Netflix with a general-interest streaming service and supercharge their wireless customer base. Now, having bailed on that strategy, they left it to Zaslav to figure out. And he cares mainly about reversing the stock slide—the company’s market valuation is down around 30 percent since the deal closed in April—convincing a very skeptical Wall Street that he’s got a forward-looking plan that grows streaming responsibly, along with other revenue streams. So far, that means a near total and pretty remarkable rebuke of his predecessor Kilar’s streaming-first worldview—“aggressive steps to course-correct,” Zaz called it today—and a return to the windowing waterfall that has served Hollywood so well for decades.
It seems obvious, but it required a rethink of the mania that has gripped Hollywood for the past few years, causing otherwise smart executives to jettison decades of profitable distribution strategies to chase streaming subs. Under Kilar, Warners was among the most aggressive, but this has been an industry-wide brain cloud, fueled by the Netflix share price and a market-induced fear of the digital revolution. The TV business will soon become the streaming business—we all know that—but it will not be the only business, and it doesn’t need to be funded like it’s the only business. In this respect, Batgirl died for the sins of Kilar, which were the sins of you, me, and an entire industry that saw what Netflix was doing and was terrified of being left in the analog dust.
Or at least that’s the strategy now. The real problem at Warner over the past decade is the lack of stability. That’s been an almost comical issue throughout the company’s history, as anyone who has read James Andrew Miller’s HBO oral history knows. Buyer after buyer, strategy after strategy. But just in the past five years, these assets have gone from Time Warner to AT&T—first under Bob Greenblatt and then Kilar—and now to Warner Bros. Discovery. And despite, for instance, Zaslav saying there will be a clear 10-year strategy for DC—how many times have we heard that now?—the parent company will probably be sold again in three to five years, whether to Comcast, as my Puck partner William Cohan just suggested, or to someone else.
In the meantime, Zaslav seems to be relying on Alan Horn, the former Warners and Disney executive, to architect a shift to Disney’s tentpole-driven movie strategy, of which DC will play a key role. Great. Fewer movies, bigger swings. That doesn’t solve the Kevin Feige problem (namely, Warners doesn’t have one), but it’s at least something to talk about on earnings calls. Anything to right this ship in the eyes of investors. “We’re not going to launch a movie until it’s ready,” Zaslav said today. “We’re not going to launch a movie to make a quarter and we’re not going to put a movie out unless we believe in it.” His implication: The previous regime—and, in some ways, the entire entertainment industry—has been out of its collective mind.
Maybe that’s why the Batgirl debacle strikes so many as a cruel sign of the times. As others follow Zaslav’s lead and the streaming wars settle into their more responsible next phase, these abrupt cuts are going to happen to others. Beware.