Welcome to a new age in Hollywood, where even a finished movie isn't guaranteed to see the light of day.
Since 2022, Warner Bros. Discovery has ruffled feathers by taking the highly unusual step of scrapping movies that had already been fully filmed and were nearly ready for release. The latest instance, though, may have been the straw that broke the camel's back, sparking massive backlash in the industry. One lawmaker is even calling for the FTC to take action.
Holy tax write-offs, Batgirl!
In 2020, a top priority at WarnerMedia was propping up the company's new streaming service, HBO Max, with content to attract subscribers. That was part of the reason for the controversial decision to send all of the studio's 2021 films to HBO Max and theaters at the same time during the pandemic. But to that same end, Warner Bros. also ordered a number of films that would premiere exclusively on HBO Max and never be released in theaters, including "Batgirl."
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Cut to 2022, and everything had changed after the theatrical business was beginning to return to normal and WarnerMedia merged with Discovery. WarnerMedia CEO Jason Kilar, who had made streaming a top priority, departed the company. The new boss, Warner Bros. Discovery CEO David Zaslav, made clear he would prioritize theatrical releases going forward.
This was the context heading into the bombshell news in August 2022 that Warner Bros. Discovery would shelve "Batgirl," meaning a $90 million film that had already been shot would never be seen. "Scoob!: Holiday Haunt," another nearly finished film intended for HBO Max, was also canceled. Zaslav suggested the main reason was Warner Bros. Discovery's pivot away from streaming-exclusive films. "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," he said.
So why not just release "Batgirl" in theaters? Well, the movie’s $90 million budget still made it cheaper than a typical tentpole superhero movie. So it seemed "Batgirl" fell into an unfortunate middle ground where Warner Bros. deemed it too big for streaming, but too small for theaters. Warner Bros. Discovery was also looking for ways to cut costs, and scrapping "Batgirl" allowed it to take a tax write-off.
Coyote vs. Acme vs. Zaslav
The cancellation of "Batgirl" was hugely controversial, but the thinking was that it was a one-off situation, not the start of a trend. Cut to November 2023, and Warner Bros. revealed it would shelve another movie that was already filmed: "Coyote vs. Acme," a Looney Tunes comedy originally made for HBO Max. Warner Bros. again cited that it had "shifted its global strategy to focus on theatrical releases," and Deadline reported the studio would take a $30 million tax write-off. Similar to "Batgirl," Warner Bros. questioned whether the $70 million film "played theatrically enough," according to Puck.
The backlash was swift as it became clear that "Batgirl" was not an isolated incident, and filmmakers who have seen "Coyote vs. Acme" came forward to praise it. Even Rep. Joaquin Castro (D-Texas) got involved, slamming Warner Bros. Discovery’s "tactic of scrapping fully made films for tax breaks" as "predatory and anti-competitive" and calling for FTC to "review this conduct." This time, though, Warner Bros. backed down. The studio is now allowing the film to be shopped to other buyers, meaning another company could distribute it.
But has the damage to Warner Bros.' reputation been done? The company already drove away Christopher Nolan with its focus on streaming over theaters. If during its pivot back to theaters Warner Bros. earns a reputation for throwing away artists’ work, will this affect other writers' and directors' willingness to do business with them? The company is currently hard at work to revive the DC franchise, so it's not a good time to be turning away top talent.
After the "Coyote vs. Acme" cancellation, though, several filmmakers told their reps to cancel meetings with Warner Bros., according to The Hollywood Reporter. And Rolling Stone revealed the film's director and producers were only informed about the decision after the studio "already underwent the process of writing off the movie." Like Wile E. Coyote chasing the road runner, Warner Bros.' actions could blow up in its face.
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