The benefit of a tax credit for not releasing “Batgirl” outweighed other options in the minds of Warner Bros. Discovery executives, Variety reported on Tuesday. Two people with knowledge of the situation confirmed to IndieWire that was the case.
It seems “Batgirl,” which was always intended to be a direct-to-HBO Max release, was not deemed vital enough to the future of the DC Universe to see that through. At least, not when put up against the potential tax benefit that comes with taking a giant loss on an asset not used to benefit the company in any monetary way. In basic terms, Warner Bros. Discovery can now treat the “Batgirl” budget, which expanded to about $90 million due to Covid issues, as a sunk cost. Monies previously invested and not recoverable can be written off come tax time.
Another option would have been to turn “Batgirl” into a theatrical release, a more direct revenue stream. Former Warner Bros. Picture Group Chairman Toby Emmerich seemed open to that idea, according to a Puck report from April — but then he left the company. The significant reshoots that would have been required plus tens of millions of dollars (at least) in marketing, and the cost of mounting a theatrical release was just too great when measured against the potential box-office performance. Big-budgeted straight-to-streaming movies, a source said, are no longer a priority under the new Zaslav order as they were for former WarnerMedia CEO Jason Kilar.
The New York Post, which first reported the news that “Batgirl” would not see the light of day (or of the Bat Signal at night), cited a source who called the quality of the movie “unspeakable.” They wrote that test screenings were “so poorly received by moviegoers that the studio decided to cut its losses and run.” IndieWire confirmed that there were test screenings of “Batgirl” that received poor marks. But the low marks were not without precedent, one person told us.
Those test screenings took place a week or so before last month’s San Diego Comic-Con. Regardless of their results, “Batgirl” was not going to be featured at the annual fan convention, one source told IndieWire. The decision was made in advance to keep the focus on Warner Bros. two theatrical movies, “Black Adam” and “Shazam! Fury of the Gods.”
“Batgirl” starred Leslie Grace in the title role (and as Barbara Gordon), Michael Keaton returning as his Batman, J.K. Simmons, and Brendan Fraser. It was directed by Adil El Arbi and Bilall Fallah, the Belgian filmmaking team behind episodes of “Ms. Marvel” and “Bad Boys for Life.”
One of David Zaslav’s stated goals is to right the DC-verse ship, and sources tell IndieWire that Zaslav is prioritizing theatrical overall going forward, particularly with respect to DC releases.
Like the tossed-away CNN+, “Batgirl” was not Zaslav’s project — it was another carryover from his predecessors Kilar and Ann Sarnoff. Those two were so dedicated to building the then-WarnerMedia’s streaming portfolio that they elected to release Warners’ entire 2021 slate day-and-date on HBO Max, infuriating theater owners in the process (and plenty of talent, too).
Another of Zaslav’s stated goals is cost-cutting. The still-young company is undergoing rolling layoffs due to a self-appointed mandate to find at least $3 billion in synergies between Discovery, Inc. and WarnerMedia.
“The decision to not release ‘Batgirl’ reflects our leadership’s strategic shift as it relates to the DC universe and HBO Max. Leslie Grace is an incredibly talented actor and this decision is not a reflection of her performance,” a Warner Bros. Pictures spokesperson said in a statement provided to IndieWire. “We are incredibly grateful to the filmmakers of ‘Batgirl’ and ‘Scoob! Holiday Haunt’ and their respective casts and we hope to collaborate with everyone again in the near future.”
Warner Bros. Discovery will report its Q2 earnings on Thursday after the stock market closes. The second quarter of 2022 was the first quarter of Warner Bros. Discovery’s existence as a company. AT&T previously housed WarnerMedia.
Ryan Lattanzio contributed reporting.