Warner Bros. Under Siege: "No One Is Angry at the Streamers — It’s These Guys"

Warner Bros Under Siege Illustration By Tim Peacock
Illustration By Tim Peacock

WarnerMedia’s production partners are eyeing court battles over its day-and-date HBO Max plan, and top talent like Denzel Washington aren't pleased by "woefully inadequate" overtures.

In the aftermath of WarnerMedia’s decision to put its entire 2021 slate of films on its HBO Max streaming service the same day the titles open in theaters, the AT&T division seems to recognize the need for damage control — but not quite how to go about it.

As Hollywood has revolted publicly against the plan, WarnerMedia CEO Jason Kilar is making rounds of brief calls to the company’s various creative partners, assuring them breezily that everything will be smoothed over before ringing off. And the offers that follow? One producer involved in the mess tells The Hollywood Reporter that what’s been proposed so far is “woefully inadequate” and “adds insult to injury.”

An agency source references Kilar’s Dec. 13 comment in The New York Times that WarnerMedia is approaching “this situation with a guiding principle of generosity” and offers this response: “You don’t know the definition of generous, dude.”

Part of the problem is that Kilar appears to talk out of both sides of his mouth. Warners threw the entire 2021 slate of movies on HBO Max day-and-date, the company says, because it had concluded that people wouldn’t be returning to theaters by the end of the year. This was even as the nation’s top infectious disease expert, Dr. Anthony Fauci, was saying things could be better much sooner than that, and as the world is witnessing planes delivering loads of coronavirus vaccines.

There are those who argue that people will still be reluctant to go to theaters by the end of the year and those who believe people will be very eager to get out of their houses and experience movies on the big screen. But since no one knows for sure, it seems disingenuous to use the pandemic to explain making such a sweeping move for a full year.

While Warners has been telling filmmakers that the move will apply only to 2021 movies, Kilar simultaneously says things like, “At a certain point you do need to lead.” Where is he leading? Is the studio’s destination really consistent with a temporary shift in strategy, necessitated by the pandemic?

Those who come from the digital world believe the revolution is here, and that every movie will stream day-and-date. They cheerfully dismiss industry players like Christopher Nolan — who say the Warners move will destroy the business model that supports film — as Luddites who are resisting the streaming future. But throughout industry history, other outsiders have also had a dangerous tendency to imagine that Hollywood insiders are stupid. It usually ends badly for them.

Filmmakers and stars understand that there’s a pandemic to consider and a digital shift in the works. They know that streaming day-and-date or going without a theatrical release altogether will be routine for many movies going forward; they know the exclusive, weeks-long theatrical window was unsustainable. “None of us are horse-and-buggy people,” says an exec involved in the battle. “We go across all platforms when everyone is in agreement and up-front about it. No one is angry at the streamers — it’s these guys.”

Consider the case of Denzel Washington, whom New York Times critics A.O. Scott and Manohla Dargis just named the greatest actor of the 21st century so far. Most likely, making him very angry was not such a good idea, but sources say that’s what happened as his new detective film, The Little Things, becomes the first one down the WarnerMedia chute.

Like everyone involved with the 2021 slate, Washington was blindsided by the decision to stream day-and-date. Given the pandemic, sources say, he might have been amenable to the move if it had been done transparently the way Warners had handled Wonder Woman 1984. “Many artists would say, ‘As long as we have a fair negotiation, I’m fine,’” says a source involved in the situation.

So Warners could at least partially solve the problem with money, though it hasn’t yet. But even if a Little Things deal is made, that doesn’t address the filmmakers’ unhappiness at being blindsided, nor their concern that the movie is supposed to debut Jan. 29 and Warners, having dismissed veteran Blair Rich, has a leaderless marketing department. Industry insiders note with concern that Warners seems to be purging just about every exec with ties to the studio’s formerly talent-friendly culture — which will have a long-term impact that seems inconsistent with a strategic shift necessitated by the pandemic. (The studio has hired marketing exec Josh Goldstine to consult on Little Things and is rumored to be close to hiring a veteran marketing executive to work across all platforms, which might help the company figure things out.)

More trouble looms with respect to James Wan’s upcoming horror movie, Malignant. A knowledgeable source says Wan, as a producer and director, has an extraordinarily rich deal — 13 percent of first-dollar gross — so he could hardly have been pleased when Warners decided to wipe out the exclusive theatrical window. The same source says the $60 million film was fully financed by Chinese company Starlight Media, which owns all rights.

Warners’ unilateral decision to put the film day-and-date on its own streamer with no deal in place looks like a lawsuit waiting to happen. The source says there is no version of a deal with Warners that does not include an exclusive theatrical release of the film. Starlight is said to be as unhappy as Legendary, which produced Dune as well as Godzilla vs. Kong and plans to fight Warners’ release plan. It doesn’t seem impossible that the two Chinese-owned companies could join forces in litigation against Warners. Legendary declined to comment, and an attorney for Starlight did not respond to a request for comment.

Warners now has to navigate deals with dozens of players. “The poor business affairs lawyers at WarnerMedia — I do not envy them,” producer Jason Blum said on my podcast, KCRW’s The Business. “They have to deal with 17 groups of people who all say, ‘I want to get paid as if my movie did a billion dollars, like you did for Wonder Woman.’ Clearly, they can’t do that, [and] now they’re set up in this super-contentious relationship.”

A source involved with the dealmaking on one film that’s caught up in the new Warners strategy says agencies, producers and talent have to take these talks to the mat: “When you let one company do whatever it wants, it opens the door to another company doing it in different circumstances.”

This will appear in the Dec. 16 issue of The Hollywood Reporter magazine. Click here to subscribe.