With Warner Bros. and Warner Max, Is AT&T Setting Up a Sibling Rivalry?

As WarnerMedia's streamer HBO Max preps for a May launch, a new film division will become a direct pipeline — and could spark awkward internal politics.

It says something about the state of the industry in general and the state of WarnerMedia in particular that the announcement of Warner Max, a “unique joint venture” between HBO Max and the Warner Bros. film studio that will produce up to 10 movies a year for the new streaming service, was not greeted with joy in the town.

A customer for up to 10 movies a year would seem like a blessing at a time when it’s harder than ever to get a green light for anything other than a comic book movie or sequel, but the news wasn’t received that way. Instead executives, agents and producers reacted to what appears to be an opaque structure and possibly an exercise in misdirection.

“It does seem like too many people on a press release screwing in a light bulb,” said one executive with longstanding ties to the Warners film studio.

The Warner Max announcement Feb. 5 mentioned six top executives who, with their teams, will create “dynamic and compelling films that draw on the depth and scope of the creative resources across WarnerMedia,” in the words of Toby Emmerich, chairman of Warner Bros. Picture Group. That reflects an intention to break down the long-siloed culture of the studio and its parent company.

To be fair, Hollywood is in such a state of anxiety that possibly nothing can make insiders feel optimistic. The industry is facing existential questions due to the disappearance of legacy studio Fox in the wake of the Disney acquisition, which has many in Hollywood feeling like a limb was amputated. Then there is the massive disruption of the streaming revolution, the long-running fight between agents and writers, and the looming threat of a writers strike.

And now industry veterans fear that another legacy studio — Warner Bros. — is being ever so slowly metabolized by HBO Max. Not that Warners will stop making movies, but many believe it will make fewer, in a much narrower range. “Is the new corporate owner [AT&T] going to give Warners the proper resources they need?” asks an executive with significant ties to the studio. “Warner Bros. has long been the gold standard of the industry on a lot of levels. If this were [a lesser studio], you’d be like, ‘Oh, well.’”

Adding to the concern is the fact that the film studio has been on a cold streak, with Birds of Prey’s disappointing performance setting off a noisy round of internal finger-pointing. (Warners sold off 50 percent of its big 2019 hit, Joker.) The studio does have some potential hits coming, including the Wonder Woman sequel and Lin-Manuel Miranda’s In the Heights.

Perhaps ironically, the Warner Max reveal seemed designed to quell fears that Warners will be dominated by HBO Max executives. Warner Bros. CEO Ann Sarnoff’s name went first, before that of Robert Greenblatt, chairman of WarnerMedia entertainment and direct-to-consumer. But that doesn’t alter the consensus of the town. “HBO Max is the locomotive there,” says one veteran producer: “That’s what matters to AT&T. Everything is dictated by the needs of HBO Max.”

So how will Warner Max operate in terms of management? Pay close attention:

HBO Max’s Kevin Reilly will share greenlight authority with film studio chief Emmerich. Reilly would already seem to have plenty to do: His full title is chief content officer, HBO Max and president, TNT, TBS and truTV. He’s also a television veteran who lacks film experience.

The person on the HBO Max side who has been designated the liaison between HBO Max and the Warners film studio is Jessie Henderson, executive vp original feature films. She formerly was co-president of Paul Feig’s production company and has credits on his 2018 film A Simple Favor and the 2017 Amy Schumer vehicle Snatched. She will jointly report to Sarah Aubrey, HBO Max’s head of original content, and Warner Bros. COO Carolyn Blackwood.

The announcement of the Warner Max structure is not clear regarding the roles of Aubrey and Blackwood; it simply says Emmerich and Reilly “will work in close collaboration” with them. Sources say Blackwood has been named Warners’ liaison with the HBO Max side, so presumably she will be liaising with Henderson, who — remember — reports to her and Aubrey.

Got all that?

This arrangement elicited a disparaging adjective from a leading agent that can’t be repeated. “As much as I hate Disney,” he says, “You look at what they’re doing with Disney+ and there seems to be a sort of seamlessness.” (Disney never made an announcement charting out an executive map when launching Disney+.)

There are many fundamental questions raised by the joint venture: What is an HBO Max movie and what will stay with Warners for a theatrical release? Will HBO Max make movies outside of the joint venture? Will Warners attempt to shorten theatrical windows in deference of the streaming service? And who’s running this show?

Sources say Warners film execs initially thought HBO Max, which launches in May, might give them an opportunity to make films that were in development but no longer seem right for theaters. (The studio has already announced that the Melissa McCarthy comedy Superintelligence will bypass multiplexes and debut on HBO Max.) But naturally, those on the HBO Max side are wary of seeing the streaming service used as a dumping ground.

A studio insider dismisses that. Deciding which films are for the studio and which belong on streaming is going to be “intuitive,” “a judgment call” or “a coin toss,” this person says, but plenty of the studio's material will be used by Warner Max.

For decades, going back at least to the Warner Communications era, the culture at the company has been marked by divisions that remained separate and siloed. With Warner Max, an effort is underway to convince the two entities to cooperate. The thinking at Warners is that HBO Max will have a competitive edge because it will utilize Warners infrastructure, including physical production.

The joint venture has yet to announce its first title. To date, HBO Max has one original feature in production, an adaptation of abortion road trip novel UNpregnant starring Haley Lu Richardson and Barbie Ferreira. In addition to Superintelligence, acquisitions include the Steven Soderbergh-directed package Let Them All Talk, a comedy-drama that will reteam him with Meryl Streep, and the Russell Simmons doc On the Record, which was dropped two weeks ahead of its Sundance debut by AppleTV+ and exec producer Oprah Winfrey.

Despite the Hollywood angst, a WarnerMedia insider says the hand-wringing over the Warner Max initiative is misplaced as the initiative will offer life to 10 movies a year that otherwise might not find a home. “Given these days of the big blockbusters,” he says, “this seems to present a great opportunity for storytellers."

But one industry veteran who works closely with the Warners film studio raises the biggest question of all: Will all the resources being plowed into the HBO Max streaming service pay off? "I don't know how it can be Disney+ or Netflix," this person says. "And if that's the case, then what?"

Pamela McClintock contributed to this report.

A version of this story first appeared in the Feb. 12 issue of The Hollywood Reporter magazine. Click here to subscribe.