HBO Max has ceded full rights to Minx back at the Lionsgate production studio, and the independent studio has said it plans to find a new home for the first season and the as-yet-unaired second.
Photo: HBOmax
On one level, Monday was a great day for HBO and HBO Max. Rating data shown The White Lotus ended its second season with record ratings, and the platform basked in the glow of 14 Golden Globe nominations. However, as has happened several times this year, relentless cost-cutting by parent company Warner Bros. Discovery stole some of the spotlight. Word leaked out that several other HBO and HBO Max series were about to disappear from the Max, including the wildly successful Westworld🇧🇷 Obviously, the moment wasn’t intentional, but Hollywood folks again wondered: What the hell is happening?
The short answer, based on conversations with sources familiar with the situation, is that this is a continuation of the story we saw earlier this year. Programs like Minx and Westworld are being shelved because WBD is taking advantage – one last time – of special circumstances relating to the merger of the former WarnerMedia and Discovery Networks. Long story short, there are legal rules and regulations that allow a company like WBD to write off costs incurred as part of a post-merger restructuring – but only for a short period of time. Do shows like Minx or Westworld outside of HBO Max and, more importantly, the WBD library will apparently help the megacorporation make your future balance sheets look that much better. It’s not just about saving a few thousand dollars in residual checks or licensing costs; it is about amortizing millions in amortization costs that these bonds would have incurred in the coming years. A missing show here, a missing show there, and pretty soon you’re talking about a significant hit to WBD’s overall earnings report — or so the company hopes.
What’s odd about this week is that a few months ago, it was assumed that WBD had gone through its books and found every possible cost savings related to the merger. Since Westworld and Minx hasn’t aired new episodes since the first round of the cut, why not just delete them from the HBO Max vault over the summer? No one is talking, but it’s hard not to conclude that WBD CEO David Zaslav has chosen to withdraw his cost cuts yet again because his company’s financial situation has deteriorated in recent months.
Indeed, the refrain of several media CEOs in recent weeks is that the advertising market has gotten a lot colder, with no signs of improvement. In fact, last month, Zaslav told an investor conference that “it will be difficult” to meet revenue forecasts unless things improve on the announcement front. And referring to the general state of WBD, Zaslav made Debbie Downer sound optimistic: “It’s messier than we thought, it’s a lot worse than we thought.” So basically, in addition to a debt problem and Wall Street’s generally meh attitude toward streaming, WBD found itself dealing with broader economic headwinds this fall. The result? Yet another round of repudiation of WBD content.
If there’s any good news, it’s that several titles could re-emerge elsewhere next year. HBO Max has ceded full rights to Minx back to the Lionsgate production studio, and the independent studio has said it plans to find a new home for the show’s first season and the as-yet-unaired second season. (If necessary, Lionsgate might even decide to put the series on its own platform, Starz.) Meanwhile, titles produced in-house by WBD studios could end up on ad-supported free streamers like Roku Channel or Amazon’s Freevee, sources say. While there have been reports that these shows would end up on a planned ad-supported streamer owned by WBD, sources tell me this is unlikely. Since they are being shelved as part of the “restructuring” savings, these programs can no longer bring the company significant money. Any revenue gained from selling to an external FAST platform, however, would be so relatively small that, apparently, that’s fine.
The past six months have been, as Zaslav himself has said, incredibly confusing for WBD — and, by extension, HBO Max. A streamer that seemed to be making a name for itself in early 2022 with buzzing shows and an improved UI has been subjected to a thousand small cuts (and a few big ones) from its owners. It’s entirely possible that more pain is yet to come if the ad market continues to deteriorate. And on Dec. 14, HBO Max said a few titles we weren’t aware of earlier in the week – including The Time Traveler’s Wife and Finding Magic Mike – will disappear over the next few days as part of the same elimination round it claimed Minx and Westworld🇧🇷
On the other hand, a source tells me that the main cause of HBO Max’s dwindling library – the post-merger restructuring rules – will no longer be an issue in 2023. These special rules made the 2022 purge possible and will not apply in The new year. As a result, any shows that are removed going forward will save WBD a lot less money, and while Zaslav never found a budget cut he didn’t love, it seems less likely that we’ll see as many – or indeed any – dramatic back catalogue. cleanups in 2023. Of course, if and when WBD decides to sell itself to Comcast, Apple or Amazon in 2024? Well, all bets are off.
This story has been updated with additional information.