‘Coyote vs. Acme’ Foreshadows Hollywood’s Very Depressing Future

According to its own self-mythology, the entertainment industry is something far grander, more poetic and noble, than just a titanic money-maker. Our beloved movies and TV shows—Hollywood’s “products,” if we must call them that—are the sum of our cultural imagination, collective dreams that mesmerize and inspire.

Unfortunately, that sentiment rarely seems to last when studios start looking at their balance sheets. Just ask the filmmakers behind Coyote vs. Acme.

Last November, The Wrap and Rolling Stone reported that Warner Bros. Discovery planned to shelf Coyote vs. Acme—a live action/animated comedy starring Will Forte and the Looney Tunes character Wile E. Coyote—in exchange for a tax write-off. Days later, The Wrap claimed that, thanks to public outcry, the studio had changed its tune and invited the filmmakers to shop their project around to potential buyers. By February, however, the same publication reported that the company wanted $75-$80 million for the film and had rejected “handsome” offers from companies including Netflix, Amazon, and Paramount without allowing them to make counter-offers.

In a statement to The Daily Beast, a representative for Warner Bros. Discovery said that Coyote vs. Acme is not shelved and remains available for acquisition. They said the film cost the studio somewhere in the $70 million range, and that the studio has not taken a tax write-off for it. The representative added that none of the dozen distributors who viewed the film for possible acquisition has submitted a formal offer. A source with knowledge confirmed to The Daily Beast that Amazon MGM Studios has not made a formal bid; representatives for Netflix and Paramount have not responded to multiple requests for comment.

For those who need a quick primer: When a company makes a product that it later decides not to sell, it can write the cost of making that product off as a loss (partial or total) for tax purposes. Sanjay Sharma, Adjunct Professor of Finance and Business Economics for USC’s Marshall School of Business, told The Daily Beast that a company cannot declare a loss on something that remains up for sale. Theoretically, a company could declare a loss on a product one year, release it a year later, and pay the taxes then, Sharma said, but that is “rare” because, frankly, the IRS would hate it.

“If you’re writing it down to zero, you can’t suddenly, next year, write it up again,” Sharma said. “The IRS will say you’re abusing the privilege of writing down.”

When asked if Warner Bros. Discovery could potentially write Coyote vs. Acme off in the future, the representative replied only that it remains available for acquisition.

As one might imagine, the crew who dedicated years to making Coyote vs. Acme—which was originally slated for a theatrical release on July 25, 2023, before it was pushed indefinitely to make way for Barbie—are heartbroken to see their film in limbo. In February, star Will Forte addressed the debacle in a social media post, in which he wrote, “I fucking hate it.” In his own post, director Dave Green wrote that he was “beyond devastated.” While speaking with The Daily Beast, executive producer Carsten H.W. Lorenz called the mess “just unfathomable.”

Like most workers in Hollywood, Lorenz sees his work as something far deeper than a business transaction. “You put so much love into [a film],” he said, “and years and years of work.” Twice during our conversation, he compared the filmmaking process to giving birth to a child.

“You raise it every day, every hour, until, finally, it can walk and go to school,” he said, continuing, “and then, on graduation day—when you think ‘Okay, now the kid is going to go out into the world and shine’—it just gets killed.”

On its face, what’s happened to Coyote vs. Acme seems almost as ridiculous as a Looney Tune. But anyone who’s paid even one meep of attention to what’s been happening in the industry and at Warner Bros. Discovery since its 2022 merger already knows that this maneuver is just one part of a growing trend.

While Coyote vs. Acme still has a small fighting chance, Warner Bros. Discovery actually did shelve Batgirl and Scoob! Holiday Haunt, two films slated to premiere on Max, in 2022. In Q3 of 2022, the company said in an SEC filing that it had amassed “approximately $2.0 – $2.5 billion” in “content impairment and development write-offs,” which THR reported would likely not include either film. Meanwhile, streaming platforms including Warner Bros. Discovery’s Max, Disney+, Hulu, and Paramount+ have spent the past few years removing content to help balance their books.

Still, something about the Coyote vs. Acme fiasco feels different—darker.

For starters, Roadrunner and Wile E. Coyote are two of Warner Bros.’ most iconic characters. This movie stars an SNL legend, and, according to insiders who spoke with The Wrap in February, it tested through the roof. If Warner Bros. Discovery feels comfortable potentially disappearing one of its marquee properties, who’s to say it won’t become common practice across Hollywood?

Rep. Joaquin Castro (D-TX) has been watching the industry for the past five years. Although Coyote vs. Acme is far from his sole focus, the congressman acknowledged during a recent interview with The Daily Beast that the film’s unceremonious treatment could foreshadow a bleak future for WBD and the industry as a whole, if it follows suit.

“People for generations have known these characters, and it tested well in front of audiences,” Castro said. “If you’re an executive at Warner Brothers Discovery, and you can’t sell that thing to the public… I don’t know if you should be [in charge of] a film division. Or a company that deals with films.”

Some spectators on X have suggested an enticing solution, at least where written-off films like Batgirl and Scoob! are concerned. If studios want to shutter their own productions in exchange for tax breaks essentially funded by we, the people, shouldn’t the works in question at least enter the public domain so that everyone can watch them? Especially considering the executives behind these decisions are collecting such massive (and, in some conspicuous cases, increasing) paychecks.

As appealing as this suggestion might sound at first, there are some obvious pitfalls. For one thing, the workers behind these shuttered films still would not receive their residuals if their works were made available for free. Regardless, Danielle Garno—a partner at Holland & Knight who also serves as co-chair of the firm’s Entertainment Law Team—poured an Acme-sized bucket of cold water all over the idea anyway.

From a legal perspective, Garno told me, studios can do pretty much whatever they want with the productions they own. “They can set it on fire, or they can launch it everywhere.” So, the public domain idea is basically a non-starter.

“Short of an act of Congress,” Garno said, “that’s not going to happen.”

Well, then! What say you, Congressman?

Rep. Castro, who has had his eye on Warner Bros. Discovery for years, acknowledged that Washington doesn’t always pay as much attention to Hollywood as it perhaps should. Because of that, he urged anyone who cares about what’s happening to productions like Coyote vs. Acme to reach out to their state representatives.

“That glitz and glamor of Hollywood actually protects it in a way from heavy congressional oversight,” Castro said. Although lawmakers don’t say it often, he added, they tend to view issues surrounding the entertainment industry as somewhat “fluffy”—not as important as, say, immigration, healthcare, or jobs.

“Those are obviously incredibly important issues,” Castro said. “But at some point, you should also get around to what is a major American industry.”

Castro first began monitoring Hollywood around five years ago as part of his effort to boost Latinx representation in media. In December 2021, he joined dozens of lawmakers in urging the Department of Justice to examine the proposed Warner Bros. Discovery merger on antitrust grounds—a matter he and three fellow legislators reiterated in a follow-up letter last April that outlined how their concerns had come to life after the merger went through.

“I don’t know who’s won because of the merger,” Castro said. “Prices have gone up on their packages. Stock price has gone down. Thousands have been laid off. They’ve dumped content. That’s hurt creatives in America.”

The content shelving wreaks its own havoc on the industry. Financially, workers lose their residuals when a film never comes out, and from a reputation perspective, the damage can be just as real.

Castro recalled some of the comments that studio executives made about Batgirl when they first canceled it in the summer of 2022. DC Studios co-chair Peter Safran said he’d seen the film and called it “not releasable.” Warner Bros. Discovery CEO David Zaslav said that canceling the film was necessary to “protect the DC brand.”

“To say those things and not even let anybody watch it or verify what you’re talking about, I think, is especially crass,” Castro told me. At another point, he called what’s happened to Batgirl, Coyote vs. Acme, and other disappeared films “a cancer that is spreading throughout the entertainment industry.”

Castro and Garno agreed that moves like this will only become more common if left unchecked. Both emphasized that Hollywood’s unions will have to bargain over this with studios when their contracts next expire. (The behind-the-scenes workers union IATSE is back at the bargaining table as we speak, as are the Teamsters and Hollywood Basic Crafts.) Until then, as Garno said, studios are free to do pretty much whatever they want with finished films—including throwing them in the trash.

Still, Lorenz refuses to give up just yet. Even if Coyote vs. Acme’s outlook isn’t exactly rosy, he still has hope that it could somehow escape this strange corporate purgatory and see the light of day.

After all, what kind of industry is this if even movies like this one—that somehow make it through the Hollywood rigamarole, that actually accomplish what they set out to do, that have “all the smell of success”—can just disappear? And who, he wonders, would even want to work with Warner Bros. Discovery if they go through with this for no other reason than “corporate greed?” (“Is there a better word for it?” Lorenz asked.)

No, that can’t be the ending. That can’t be the story that Warner Bros. Discovery—and Hollywood at large—want to tell about themselves.

So Lorenz is keeping his hopes up. He’s protecting his Coyote vs. Acme spoilers, just in case people one day get to see the movie he produced. He’s reveling in the memory of getting stopped at Zagreb Airport in Croatia while wearing his Acme T-shirt for a selfie with 12 customs agents who couldn’t stop saying, “Meep meep!” And he’s doing his best to understand why Warner Bros. Discovery couldn’t be bothered to throw this movie on its streaming service and see what happens, given how well it tested.

Still, there’s really no escaping that awful feeling. For this producer, at least, “it’s like somebody died.”

This post was originally published on Daily Beast