Warner Bros. said. Discovery, which is trying to regulate its balance sheet, said it will incur roughly $3.2 billion to $4.3 billion in pre-tax restructuring charges in the third quarter.
The media company, which represents the Discovery and WarnerMedia merger, revealed the expected fees in an SEC filing on Monday. “As part of its plan to achieve significant cost synergies, in the third quarter of 2022, the company finalized the framework that supports ongoing restructuring and transformation initiatives that will include, among other things, strategic content programming evaluations, enterprise restructuring, facility consolidation activities and other contracts WBD said.
Fees include:
• Strategic content programming evaluations, resulting in content weakening and development write-offs, by about $2.0-2.5 billion;
• Strategic content programming evaluations, resulting in content weakening and development write-offs, by about $2.0-2.5 billion;
• Organizational restructuring costs, including termination, retention, transition, and other related costs: $800 million – $1.1 billion; And the
• Facilities consolidation activities and other costs of contract termination: $400 million – $700 million.
Of the total amounts above, the estimated cash outlays from organization restructuring, facility consolidation activities and other costs to terminate the contract would be in the range of $1.0 billion-$1.5 billion, according to the WBD.
The company incurred $1.0 billion in pre-tax restructuring fees in the second quarter of 2022 and estimated additional pre-tax restructuring costs of $1.3 billion-$1.6 billion, primarily attributable to content, in the third quarter of 2022.
While the company’s restructuring efforts are ongoing, including a strategic analysis of content programming that could lead to an additional depreciation above the above estimate, significant restructuring initiatives are expected to be completed by the end of 2024.
The Company intends to treat fees related to its restructuring initiatives as items that affect the comparability of results. The estimated fees and costs mentioned above are subject to a number of assumptions. Actual results may differ materially as a result of several important factors, including the risks and uncertainties described under “Cautionary Note Regarding Forward-Looking Statements” below.
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