Disney Taking $1.5B Tax Write-Off After Content Purge; More To Come
In a new SEC filing, Disney says it's looking at a $1.5 billion tax write-off after pulling Disney+ & Hulu content (and it's not done yet).
During last month's earnings call, The Walt Disney Company CEO Bob Iger and CFO Christine McCarthy laid out a number of measures that were going to be put into play to get "The Mouse" back on stable financial ground on the streaming side of things. Along with pulling back on content spending, stretching out the release calendar & layoffs numbering the thousands, Disney is looking to integrate Disney+ and Hulu into one app in the U.S. by the end of the year (and possibly buy out Comcast's stake in Hulu), as well as raise the subscription cost on Disney+ without ads. But the measure that hit the creative community and fans the hardest is one that those of us who followed what went down with Warner Bros. Discovery are all too familiar with. In a new SEC filing from earlier today, Disney confirmed that it will incur a $1.5 billion impairment charge for the June quarter – the result of pulling a large number of titles from both Disney+ and Hulu on May 26th of this year. And it's not done yet…
In its filing, "The Mouse" states that its content review on the two streamers was continuing and that the company "currently anticipates additional produced content will be removed from its DTC and other platforms, largely during the remainder of its third fiscal quarter." What that means is that we could see the $1.5 billion impairment charge we discussed above grow by another $400 million based on additional pulled content – putting the final number in the $1.5 billion-$1.8 billion range that McCarthy addressed during last month's earnings call. Some of those titles that were pulled included Disney+'s Willow, Big Shot, Turner & Hooch, The Mysterious Benedict Society, Just Beyond, and The World According To Jeff Goldblum. On the Hulu side, some of the titles used as tax write-offs included Y: The Last Man, Dollface, The Hot Zone, Maggie, Pistol, Little Demon, and Marvel's Runaways.
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