WBD CFO defends show axes, prepares for third-party licensing, FAST ramp-up

Warner Bros Discovery (WBD) chief financial officer Gunnar Wiedenfels has defended the decision to axe dozens of projects across the combined business, saying the moves are part and parcel of any regime change.

Gunnar Wiedenfels

“I don’t think it’s unusual. We’re a creative industry and one of the elements of creativity is that there are judgements and differences in views on what the potential of a certain piece of IP might be,” said Wiedenfels during an interview at a Bank of America conference on Thursday.

The programming cuts have come thick and fast since the arrival of the new management team, led by WBD president and CEO David Zaslav. Among the most eye-popping was the decision to scrap the Batgirl feature film, despite the fact it was in post-production and had already cost US$90m.

“We’ve got a new management team coming in, new studio leadership with [Warner Bros Pictures Group heads] Pam Abdy and Mike De Luca. They’re obviously going through what’s in the pipeline, and they’ve formed their creative views and assessments. My team has helped them by providing financial data points, to the extent possible, and a framework to assess the potential from a purely financial perspective,” said Wiedenfels.

Media coverage of the programming cuts at WBD had been “blown out of proportion a little bit, in terms of the attention externally,” he said, adding that “media likes to talk about media, I guess, but I think that’s how these things go as a new team takes over.”

One of the new management’s top priorities has been to find US$3bn in annual synergies, and – as of last month – WBD execs said they had already achieved around US$1bn. Those savings are not being made by scrapping shows, said Wiedenfels, but rather from implementing “better business practice.”

Under its previous management team, led by CEO Jason Kilar, WarnerMedia drastically reduced its content-licensing activities as it sought to retain shows and build out its SVoD platform HBO Max. The philosophy around licensing is very different under Zaslav, who has put an emphasis on a maximising revenue in all windows, including theatrical, and making a return to third-party licensing.

WBD plans to resume third-party licensing in a significant way, said Wiedenfels, and that push could begin soon.

“We have a tonne of content that’s been sat idly… and we’re firing this up. There’s a lot of excitement across the organisation. People are happy they have the ability to do the job they were hired for, and we’re seeing a lot of demand across a lot of the distribution windows.”

While combining HBO Max and Discovery+ into a single streaming offering remains among its top priorities – WBD has previously said the merged service will launch next year – Wiedenfels said the company is also looking closely at entering the free ad-supported streaming TV (FAST) channel space as another means of monetising its library content.

“We have so much content, and there is a segment in pretty much every market that’s not going to be willing to pay [for a subscription service],” he said.

“The first priority is to get the SVoD product launched but, in the spirit of utilising the content across as many platforms and offerings as possible, FAST is certainly a very interesting area to play in.”