Warner Bros. Renaissance Remains a Waiting Game

New York Times

27-03-2025

David Zaslav blew into Hollywood in 2022 like a tornado of fresh air, telling anyone who would listen about his rejuvenation plans for Warner Bros.
As a lifelong television executive, he was new to the film business. But the merger of Discovery and WarnerMedia had put him in charge of the most storied studio left standing — a troubled Warner Bros. — and the solution to its woes, he said at the time, was relatively straightforward.
Make more movies for exclusive theatrical release. Make a wider variety of movies, not just big-budget spectacles. And then watch multiplexes fill up. 'This business could be bigger and stronger than its ever been,' Mr. Zaslav said at a 2023 convention of movie theater owners, to jubilant applause.
Yet two years later, the movie business finds itself weaker than it has ever been. Ticket sales are down 40 percent compared with 2019, just before the pandemic sped a consumer shift to streaming, according to Comscore, which compiles box office data.
And one reason (among many) involves Mr. Zaslav's Warner Bros.
Warner Bros. has delivered only one homegrown hit over the last year. That was 'Beetlejuice Beetlejuice,' which was released in September. Since then, the studio has whiffed five times. 'Joker: Folie à Deux' died on arrival in October. 'The Lord of the Rings: The War of the Rohirrim' fizzled in December. 'Companion,' a low-budget thriller, came and went in January. 'Mickey 17,' an expensive science-fiction adventure, bombed this month.
'The Alto Knights' — a mob drama starring Robert De Niro that Mr. Zaslav personally championed — added to the carnage last weekend. It cost roughly $50 million to make and another $15 million to market, but sold a mere $3.2 million in tickets over its first three days. That made the film a near-complete wipeout; studios and theaters split ticket sales roughly 50-50.
In Hollywood, blame for a bad weekend at the box office usually gets spread among studio personnel. But this time much of it has been aimed squarely at Mr. Zaslav, the chief executive of Warner Bros. Discovery.
'Rammed through by the C.E.O. on behalf of his elderly cronies, against the best instincts of the people who make movies for a living,' one entertainment industry trade news outlet said. 'A type of film that's 30 years past its sell-by date,' reported another. 'A $50 million money pit' that 'anyone with any knowledge of the last 50 years of theatrical box office' could have spotted, a third asserted.
Combined with snickering in studio hallways and private text-message rants, the commentary carried a clear undertone: Mr. Zaslav, they suggested, does not understand movies.
Mr. Zaslav pushed for 'The Alto Knights' shortly after taking over in 2022. Some executives at the studio pushed back, saying the box office prospects were grim — it was a film for a streaming service, at best. But Michael De Luca and Pamela Abdy, whom Mr. Zaslav had hired to run the Warner Bros. Motion Picture Group., agreed to give 'The Alto Knights' a shot. (One prominent dissenter, Courtenay Valenti, a 33-year Warner Bros. veteran, soon decamped to Amazon Studios.)
Mr. Zaslav and Warner Bros. Discovery declined to comment.
Irwin Winkler, who produced 'The Alto Knights,' defended Mr. Zaslav and the film in a phone interview on Monday. The men are longtime acquaintances.
'I think David Zaslav is a really, really great executive,' Mr. Winkler said. 'I think the film is terrific. I wish it did more box office. Over the years, I'm sure that Warners will make some money on it.'
Mr. Winkler, who has produced films since the 1960s, including 'Rocky' and the recent 'Creed' spinoffs, noted that 'Goodfellas,' which he also produced, had soft ticket sales in 1990. 'We never did big theatrical business with that one, but we certainly did in home entertainment — DVDs in those days. I think that in the long run 'The Alto Knights' will have the same kind of long-range audience acceptance.'
Movies flop all the time. In a financial sense, 'The Alto Knights' is actually a relatively small miss. Disney's 'Snow White' stumbled last weekend on a more calamitous scale, costing at least $350 million to make and market and collecting $42 million over its first three days in domestic theaters.
Perception also has a cost, however, and this is where 'The Alto Knights' takes on greater weight. It's a cliché to say that perception is everything in Hollywood, but it also happens to carry a lot of truth.
Perhaps the movie business is turning out to be a little harder than Mr. Zaslav expected? Is the promised Warner Bros. turnaround ever going to materialize? Studio assembly lines move slowly: It takes years to develop, shoot, assemble, market and distribute a single movie — and that's if everything goes well. But Mr. Zaslav has now been in charge of Warner Bros. for three years.
Adding to the pressure: Movies are now one of Warner Bros. Discovery's only clear problem spots.
Warner Bros. Discovery generated $677 million in profit from streaming in 2024, up from $103 million a year earlier, according to securities filings. In February, Mr. Zaslav said streaming would deliver $1.3 billion in profit this year, exceeding previous guidance by 30 percent.
The Warner Bros. television studio has new hits in 'The Pitt' on Max and 'Running Point' on Netflix, among others. HBO has been delivering, too, with shows like 'The White Lotus' and 'The Gilded Age' expanding their audience, and a second season of 'The Last of Us' arriving on April 13. Last year, the company reached new multiyear agreements for its cable networks (TNT, TBS, CNN, Discovery, HGTV, Food Network) with major pay-TV providers.
As for movies?
Mr. Zaslav acknowledged that film is 'a tough business' at a Morgan Stanley conference this month, and seemed to ask for a bit more patience. 'It's a long-cycle business, and we've been winding out of what wasn't ours,' he said, a reference to flops like 'War of the Rohirrim' and 'Mickey 17,' which were given a greenlight before he arrived. 'Over the next few years you're going to see what is ours, and I'm optimistic about it.'
The next Warner Bros. release, 'A Minecraft Movie,' could break out when it arrives next week, box office analysts say. 'Minecraft,' which cost $150 million to make, is based on the popular game and aimed at families. (Legendary Entertainment contributed 25 percent of the budget and helped produce it.) A couple weeks later, Warner Bros. will release the R-rated 'Sinners,' a $90 million original horror thriller set in the 1930s and starring Michael B. Jordan. 'Sinners' was directed by Ryan Coogler ('Black Panther'). Both movies were overseen by Mr. De Luca and Ms. Abdy.
At the Morgan Stanley event, Mr. Zaslav praised the pair for getting into business with Mr. Coogler and other marquee filmmakers on expensive original projects. 'In some cases, we may have overspent,' Mr. Zaslav said, an apparent reference to a Bloomberg article on Feb. 26 that questioned the strategy. 'I don't think we did. Because we wanted to bring the best and the brightest people back to Warner Bros.'
The most important movie on Warner Bros. Discovery's immediate schedule is 'Superman' from DC Studios, which is managed by James Gunn and Peter Safran. It arrives on July 11 and represents an effort to reboot the company's superheroes for a new generation of moviegoers. Mr. Zaslav, noting at the Morgan Stanley conference that he had just spent an hour and a half with the DC Studios team, called the movie 'a huge moment for us.'
The budget for 'Superman' isn't known, but superhero movies typically cost about $200 million to make, not including marketing.
If it becomes a hit, the result would represent a turnaround for the studio from last summer, when Warner Bros. released duds like 'Furiosa: A Mad Max Saga' and managed only a 4.7 percent share of domestic movie-ticket sales. By that measure, it was Warner's worst performance since analysts started to compile seasonal box office data in 1982.