Just three months after AT&T spun off WarnerMedia to merge with Discovery Inc., word on the street is that a major restructure is in the works. Let's dive into the rumors.
Here's why some fans think HBO Max could be shutting down.
Rumors about a shakeup at HBO Max began on Aug. 3 when eagle-eyed fans on Reddit noticed that at least six Max Originals had disappeared from the platform.
Shortly after came news that HBO Max had shelved two upcoming releases: a feature-length Batgirl and a sequel to the animated film Scoob. A few other expected titles were also dropped from the release calendar.
But perhaps the most worrying signal for the future of the platform came from an inside source who told The Wrap that layoffs were coming for more than 70 percent of HBO Max's development staff.
A significant headcount adjustment like this isn't exactly a surprise. The rumored layoffs are said to be part of a major restructure to eliminate redundancies created by the merger of Warner Media and Discovery. Upon the merger announcement in May, WMD leadership expressed a goal to cut $3 billion in costs over the next two years.
However, it sounds like the HBO Max side of the business will suffer the lion's share of the cuts.
Shelved DC films could signal plans to spin off or sell content to another streamer.
The unexpected cancelation of Batgirl's release, as well as earlier talk in April about restructuring the DC vertical of HBO Max, may offer some clues. WBD could be planning to sell its DC content to another platform or spin it off entirely.
Meanwhile, the popular Discovery tentpole show Fixer Upper and four other Magnolia Network shows are headed to HBO Max in September. Chip and Joanna Gaines' crossover could signal a future consolidation of HBO Max with Discovery+.
Even more changes are afoot ahead of earnings.
Another rumor circulating suggests the platform may spin off its classic movie properties, which largely exist on the TCM hub.
An ad-supported tier of HBOMax is also reportedly under consideration.
WBD will report its earnings after market close on Aug. 4, at which time there will likely be some clarity over the rumored shakeups. According to consensus reporting from Bloomberg, analysts expect revenue around $11.91 billion and $0.0 adjusted EPS.
While the news hasn't been taken well by fans and stars like Batgirl actor Leslie Grace, it seems to be pleasing investors. The stock was trending up 4 percent by midday on Aug. 4.