WarnerBros Discovery boss David Zaslav reveals HBO lost $3B last year after spending $7B on content

WarnerBros Discovery CEO David Zaslav said HBO lost $3 billion last year after the company spent almost $7 billion on content. 

Speaking at RBC's global investment conference on Tuesday, Zaslav said the company would have to make serious changes to hit its projected $12 billion earnings for 2023, adding that 'it's going to be hard' to reach the goal. 

In its latest earnings report, the company said it missed out on $2.3 billion over a decrease in licensing and distribution revenue from its streaming service, signaling a drop in demand over its vast library.    

As HBO Max prepares to merge with Discovery+ next year, Zaslav said the company plans to sell off some of its shows to cut costs. 

The CEO said: 'We looked at [HBO Max] and we said, 'Most of this is not being watched. Or, we don't think anybody is subscribing because of this.' 

'We can sell it non-exclusively to somebody else,' he added. 'Look at this huge library that we have.' 

It comes as the streaming service is set to put more focus on in-house programing, like Game of Thrones' House of the Dragon, after shelving other projects, like the $90 million Batgirl film.  

WarnerBros Discovery CEO David Zaslav (pictured) said HBO lost $3billion last year after splurging $7billion on content 

He said low-rated shows and bigger budget movies made only for the streaming service would be removed from the platform and sold off 

It comes as Zaslav continues to come up with ways to find $3billion in savings by the end of the year while shifting focus on the streaming service to in-house programing , like Game of Thrones' House of the Dragon (above)

Although Zaslav did not say which shows were going to be on the chopping block, he said the streaming service is being 'sized up,' and that low-rated shows and bigger budget movies made only for the streaming service would be the first to go.  

The CEO reaffirmed that the cuts to save his company money would fall on HBO, which went from making more than $2billion in revenue in 2019 to losing about $3billion as content spending surged.

'It's messier than we thought, it's much worse than we thought,' Zaslav said of HBO and Discovery's merger. 

He also complained that the advertising market was 'very weak' at the moment, and that Warner Bros. Discovery would stay disciplined when discussing NBA rights renewals for 2023. 

'We don't have to have the NBA, and if we do a new deal with the NBA, it's gonna look a lot different,' Zaslav said. 'I'd like to do a deal with the NBA, but it has to be a deal for the future. It can't be a deal for the past.' 

The CEO added that the company was set to launch a free ad-supported streaming service to compete with Pluto and Tubi. 

Warner Bros. Discovery did not immediately respond to DailyMail.com's request for additional information. 

Following Zaslav's comments, the company's stock began to take a tumble, and as of Tuesday afternoon, shares are down 1.58 percent. 

WarnerBros. Discovery stock took a tumble on Tuesday, falling 1.58 percent 

Since the merger in April, Zaslav has touted that he would find $3billion in cost saving measures to the company. 

One of his biggest moves was to immediately pull the plug on the $300 million CNN+ streaming service, just weeks after it launched. 

Executives then suddenly scrapped its $90 million 'Batgirl' origin film and the upcoming 'Scoob!' sequel, 'Scoob!: Holiday Haunt,' which cost $40 million to produce.

WBD execs also pulled the plug on a range of animated shows for HBO Max in another cost-cutting move.

Shifting away from producing movies from its platforms, Warner Bros. Discovery canceled its release of the $90 million production 'Batgirl' (pictured)

It also cut nearly one-fifth of its in-house television division. Teams most impacted by the most recent layoffs include worked primarily for animated, unscripted and scripted shows, including 'Ted Lasso' (pictured)

Last month the company continued laying off employees as nearly one-fifth of its in-house television division were let go. 

The layoffs included 82 current employees and 43 unfilled positions in the sector - headed by chairman Channing Dungey - representing 19 percent of current staff and 26 percent of total employees.

Responsible for shows like 'Ted Lasso,' 'Abbott Elementary' and 'The Bachelor,' the most impacted teams worked primarily for animated, unscripted and scripted shows.

At the most recent Emmys, the division won eight awards across three of its shows.

In addition to slashing 125 positions, the company also canceled Stage 13 and the Warner Bros. Television Workshop program, two initiatives which supported diverse voices for writing and directing.