Warner Bros. recently screened their highly anticipated movie, Coyote vs. Acme, to a select group of potential buyers. The studio, known for its big-budget productions, had set a minimum purchase price of $70 million for the animated live-action hybrid. However, despite generating interest from Netflix and Paramount, the bids fell short of the asking price, leaving Warner Bros. with a significant financial burden.
A Disappointing Loss on Q3 Earnings
In a surprising turn of events, Warner Bros. took a staggering $70 million writedown on their Q3 earnings due to the cost of Coyote vs. Acme. This setback came after the studio decided not to release the film back in early November, leaving it in a state of limbo. While the door has not been completely shut on the movie’s prospects, it seems that Warner Bros. is not actively pursuing a sale.
With no concrete offers on the table, Warner Bros. is left wondering if there are any other potential buyers for Coyote vs. Acme. The studio had hoped to at least recoup the film’s production costs, without aiming for any profit. Could someone like David Ellison, known for his shrewd business deals, step in and put the movie through Skydance’s Netflix output deal? So far, no viable alternatives have emerged.
Phil Lord, the acclaimed filmmaker behind Warner Bros.’ successful Lego Movie franchise, took to Twitter to express his discontent with the studio’s handling of Coyote vs. Acme. Lord accused the conglomerate, helmed by David Zaslav, of using a tax loophole to write off the entire movie. He questioned whether this behavior was anticompetitive, especially considering Warner Bros.’ intention to merge with another major studio. Lord’s frustration extended to the climax of Coyote vs. Acme, envisioning a humorous congressional hearing.
Interestingly, Lord’s tweet resonated with Texas congressman Joaquin Castro, who had previously criticized Warner Bros. for their tax writeoff strategy. Castro deemed the studio’s actions predatory and anti-competitive, calling for the Justice Department and Federal Trade Commission to review the situation. He likened Warner Bros.’ behavior to burning down a building for insurance money, highlighting the questionable nature of the tax loophole.
Those close to David Zaslav, however, have defended the executive, stating that he did not reject Coyote vs. Acme outright. It appears that the decision to shelve the movie was influenced by CFO Gunnar Wiedenfels’ cost-cutting measures following AT&T’s ownership. Despite this, Warner Bros. did invest in marketing materials for the film and had initially intended to release it. There were even expressions of interest from SXSW, but the studio chose not to screen it at the festival.
As the fate of Coyote vs. Acme hangs in the balance, Warner Bros. faces the daunting task of recouping their massive investment. While the current situation may seem bleak, there is still a glimmer of hope that a buyer will emerge to rescue the movie from its purgatory. Until then, Warner Bros. must navigate the complex landscape of the film industry, seeking a solution that will alleviate their financial burden and potentially revive the long-awaited Coyote vs. Acme.
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