Warner Bros. Executives Under Scrutiny as Box Office Disappointments Mount: Are They Out?

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In 2023, Michael De Luca, standing at Caesars Palace Las Vegas’ Colosseum, joked to an empty audience during a rehearsal at CinemaCon, “Morning, guys,” hinting at his recent change of job from MGM’s film division to the 102-year-old Warner Bros. Studios. However, this joke didn’t make it into the final presentation. Fast forward two years later, the situation at Warner Bros. is far from amusing.

Under De Luca and his longtime friend Pamela Abdy’s leadership, while “Barbie” was a 2023 blockbuster hit, the studio’s 2024 film slate faced significant setbacks. Upcoming movies like Bong Joon Ho’s “Mickey 17” and “The Alto Knights” are expected to cause losses of at least $110 million due to their heavy reliance on special effects.

Despite their reputation as champion filmmakers who take bold risks, the duo’s focus on the balance sheet has become a concern, especially with morale on the lot being dangerously low. Rumors suggest that their days at Warner Bros. may be numbered, as they have reportedly lost the confidence of CEO David Zaslav, known for his impatient management style focused on profitability.

The pressure has been intense, causing tension within the motion picture group, which one insider described as a “swirling fiasco.” This tension allegedly reached a peak last week, leading to heated arguments between De Luca, Abdy, and their team. When asked about these rumors, both executives denied any open hostility towards each other or their teams. They emphasized that their friendship, spanning over 30 years, extends beyond the business.

In response to the mounting pressure, some key releases like Paul Thomas Anderson’s $130 million-plus crime thriller starring Leonardo DiCaprio and Maggie Gyllenhaal’s “The Bride!” have been rescheduled for later release dates.

Dana Nussbaum, holding the position of Executive Vice President for Global Marketing at Warner Bros., has been with the studio for 21 years and has witnessed a variety of leaders during her tenure. She hasn’t noticed any open conflicts in the past few months. Instead, she appreciates the supportive leadership shown by Mike and Pam, who have been active and transparent in their roles.

The duo acknowledged some high-profile setbacks and expressed confidence in their upcoming lineup of movies. Preliminary data indicates that Jack Black’s “Minecraft” film might strike a chord with audiences, but it’s unlikely to match the success of “The Super Mario Bros. Movie.” Abdy and DeLuca are particularly optimistic about “Sinners,” an original vampire concept from “Black Panther” director Ryan Coogler, which is currently forecasted to open with around $40 million in its first three days (though it’s important to note that Coogler, not Warner Bros., will retain ownership of the underlying intellectual property). With a production budget of $90 million, the film must earn at least $185 million to reach profitability.

In Seth Rogen’s Apple TV+ series, “The Studio,” a studio head with refined taste struggles to create art for the public while his boss (played by Bryan Cranston) looks on. This dilemma mirrors issues at Warner Bros., particularly on costly director projects like those from Anderson and Gyllenhaal. According to someone familiar with DeLuca and Abdy’s relationship, Anderson has been a longtime favorite of the studio head (referred to as “Mike”), while “The Bride!” is a pet project for Abdy.

De Luca and Abdy refuted any conflicts in their relationship, stating they collaborate on all projects at Warner Bros. Those within the studio also emphasized that both projects were intended for a wide audience, and were filmed using IMAX cameras. However, Abdy expressed irritation towards a recent report suggesting she and De Luca were reckless for providing Gyllenhaal with a substantial budget for his second directorial venture (following the $5 million Netflix film “The Lost Daughter”). Abdy questioned, “Is it not cool to suggest Maggie doesn’t deserve a big budget? Many men have lower-budgeted movies initially and then go on to have larger budgets.”

The studio leaders contended that moving the movie to March provided an opportunity for it to compete in a less crowded market, citing successful films like “Dune: Part Two,” Legendary’s monster movies such as “Kong,” and competing titles like Disney’s “Cruella” which all debuted during the spring season.

Unless there is a change in leadership at Warner Bros. before then, the true test will be in September with the release of DiCaprio’s new movie. Despite being one of the biggest stars in Hollywood, even DiCaprio has experienced a decline in box office success. His last film, “Killers of the Flower Moon” (released in 2023), made only $68 million at the domestic box office. A reliable source familiar with “One Battle After Another” stated that the film has been tested in multiple markets over the past few months, and a common feedback was that audiences had difficulty empathizing or rooting for any of the characters, reviving the age-old debate about the importance of ‘likability’ in commercial films.

2007’s “There Will Be Blood,” Anderson’s highest-grossing film, raked in a global total of $76 million. To match its production costs, “One Battle” needs to gross at least $350 million worldwide. For comparison, “Once Upon a Time” starring DiCaprio garnered $392.1 million, but it also featured co-stars Brad Pitt and Margot Robbie.

According to insiders at Warner Bros., director Paul Thomas Anderson has consented to audience testing for the film “One Battle,” marking his first such agreement since “Boogie Nights.” Producers Abdy and De Luca have verified that the movie has been tested in three locations: Phoenix, Las Vegas, and Dallas. Leonardo DiCaprio’s performance is being lauded as “unconventional,” based on the testing results. A role portrayed by Benicio del Toro received the highest scores, with another played by Sean Penn also registering high (with Penn already in contention for next year’s Oscars). The same source hinted that there is a disagreement between DeLuca and Anderson regarding the final edit of the film, which exceeds 2.5 hours in length.

Inside sources refute rumors of tension between De Luca and Anderson, noting that De Luca was part of Anderson’s wedding party. Another source mentioned that Anderson made the choice to cut around eight to ten minutes from “One Battle” based on feedback received during early screenings.

According to more than a dozen individuals, including current employees and associates connected to the studio, there is a lack of shared enthusiasm at lower levels in Warner Bros. Pictures regarding Abdy and De Luca’s optimism. Many have expressed fear and disdain among staff members since the start of the new year. The entire company is reportedly on edge, hoping that the release of “Minecraft” on April 4 will lift morale.

As a dedicated cinephile, I can empathize with the shared sentiment that was expressed by De Luca when discussing the disappointment surrounding Phillips’ “Joker” sequel. We didn’t want to let down David, and we believe that with the upcoming “Minecraft” project, we’re starting to turn a corner. This success should provide us with the momentum we need for our diverse portfolio strategy.

Currently, the industry is keeping a close eye on how exhibitors react to Warner Bros.’ film lineup at CinemaCon. They’ve got blockbuster hits and well-known intellectual properties to display, particularly from New Line, which is overseen by Richard Brener. This lineup includes upcoming films in the “Conjuring” and “Final Destination” series, as well as a movie adaptation of “Mortal Kombat.” If only there was more time at CinemaCon to screen movies still in development and production – they’ve got a treasure trove of potential intellectual properties on tap, such as a new “Matrix” film, a sequel to the classic “Practical Magic,” featuring Sandra Bullock and Nicole Kidman reuniting, another installment of George Clooney’s “Oceans” series, and reboots of “Gremlins” and “The Goonies.

It remains uncertain whether Mike and Pam will tell jokes in Las Vegas this year. Maybe they could draw inspiration from another one of DiCaprio’s films, whose production cost caused quite a stir, and portray Jack and Rose: two deeply connected individuals struggling to keep their heads above water in treacherous waters.

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2025-03-28 22:23