Warner Bros. Discovery CEO David Zaslav addressed the company’s controversial decision this week to cancel releases for “Batgirl” and “Scoob!: Holiday Haunt,” during the company’s Q2 earnings call on Thursday.
“We’re not going to launch a movie until it’s ready,” Zaslav said during the Q&A portion of the call, when asked directly about “Batgirl” getting the ax. “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.”
During the presentation, Zaslav repeatedly pointed to the company’s DC superhero properties — including Batman, Superman and Wonder Woman — as central to the company’s broader content strategy. To better marshal those properties, Zaslav cited his previously reported goal of putting together a team with a “10-year plan focusing just on DC,” similar to the approach Disney has taken with Marvel Studios, as run by Kevin Feige. But he did not announce who would be heading that team.
“These are brands that are known everywhere in the world,” he said of the DC characters. “And as part of that, we’re going to focus on quality. DC is something that we think we could make better and we’re focused on it now.”
Zaslav mentioned “quality” repeatedly when discussing DC, strongly implying that “Batgirl” was not up to a standard that he believes is necessary for adaptations of the wider comic book property.
“The objective is to grow the DC brand, to grow the DC characters,” he said. “But also, our job is to protect the DC brand. And that’s what we’re going to do.”
Zaslav name-checked “Black Adam,” “Shazam! 2” and “The Flash” as DC features that he’s “very excited about.”
“We’ve seen them, we think they’re terrific, and we think we can make them even better,” he said. (Zaslav’s mention of “The Flash,” currently scheduled to debut June 2023, is particularly meaningful, as star Ezra Miller is facing multiple allegations of abuse and misconduct that neither the actor nor the studio have addressed publicly.)
The decision to shelve two nearly completed feature films — including a superhero property with a $90 million budget — stunned the wider industry. On Wednesday, “Batgirl” directors Adil El Arbi and Bilall Fallah (“Bad Boys for Life,” “Ms. Marvel”) released a statement that they were “saddened and shocked by the news,” and star Leslie Grace said she was “proud of the love, hard work and intention all of our incredible cast and tireless crew put into this film.”
On Tuesday, Variety reported that the main driver for the decision was the shift in company strategy away from creating feature films exclusive to HBO Max, as was the case with “Batgirl” and “Scoob!: Holiday Haunt,” following the merger of WarnerMedia and Discovery.
“This idea of expensive films going direct to streaming — we can’t find an economic case for it, we can’t find an economic value to it, so we’re making a strategic shift,” Zaslav said during the Q&A.
He also addressed this shift during his opening remarks on the Q2 earnings call.
“We will fully embrace theatrical as we believe that creates interest and demand, provides a great marketing tailwind, and generates word-of-mouth buzz as films transition to streaming and beyond,” Zaslav said. “We have a different view on the wisdom of releasing direct streaming films, and we have taken some aggressive steps to course correct the previous strategy.”
During the presentation, CFO Gunnar Wiedenfels cited the strategy driven by previous leadership at WarnerMedia — namely, Jason Kilar and Ann Sarnoff — to bankroll “select direct-to-HBO Max films” as lacking “sufficient support” to sustain. He cited the “Wonder Twins” movie (which was in pre-production), and the nearly completed “Batgirl” and “Scoob!: Holiday Haunt” as “examples of streaming films that do not fit this new strategic approach.”
Wiedenfels said canceling those projects was a “difficult decision,” but the company is “committed to being disciplined about a framework that guides our comfortable investment for maximum return.”
To defray the losses from canceling the films, the company is said to be taking a tax write-down on both movies, citing a shift in strategy in the wake of the merger, but that strategy was not addressed during the earnings call.