(Reuters)

Media company Warner Bros Discovery today (October 24) said it was expecting to book a pre-tax charge of US$1.3 billion to US$1.6 billion in the third quarter, much of it related to content pulled from the streaming service HBO Max, such as The Not-Too-Late Show with Elmo.

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 realise US$3 billion in post-merger savings.

The regulatory filing details how Zaslav and his leadership team plan to accomplish the financial restructuring, which will be substantially completed by the end of 2024.

CANCELLED MOVIE PROJECTS

The company has undertaken a series of cost-cutting measures since the merger, including canceling projects such as the live-action version of the D.C. Comics character Batgirl and a planned Wonder Twins film.

The coming third-quarter will reflect the removal of 36 titles from HBO Max that failed to attract large audiences, including originals like the teen drama Generation and the animated anthology series Infinity Train.

NEW STRATEGY TO MERGE STREAMING SERVICES

In total, the company expects to write off as much as US$2.5 billion in costs related to canceled projects.

Warner Bros Discovery said it anticipates US$800 million to US$1 billion in costs related to layoffs throughout the media organisation, and another US$400 million to US$700 million by consolidating facilities.

In its latest 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.

Shares of the company were down 0.3 per cent in after-market trading.