The Journal. - Can Warner Bros. Uncancel J.K. Rowling?

Episode Date: March 1, 2024

Harry Potter author J.K. Rowling has come under fire in recent years for comments she’s made about gender and sex that some say are transphobic. WSJ’s Erich Schwartzel reports on how Warner Brothers Discovery, the company that owns the rights to Harry Potter, is calling upon the controversial author to make more magic. Further Listening: – The Media Mogul Taking an Ax to Hollywood  Further Reading: – Can Warner Bros. Uncancel J.K. Rowling?  – How the Minions Became Hollywood’s Mightiest Franchise  Learn more about your ad choices. Visit megaphone.fm/adchoices

Harry Potter came to me on a train in 1990. I was sitting just staring out of the window, and the idea just fell out of nowhere. It was the purest stroke of inspiration I've ever had in my life. That's J.K. Rowling, the creator of Harry Potter, the boy wizard that became a cultural sensation. She was giving an interview in 1998. Almost from the start,

I'd envisaged it as a seven-book series, which would see him through wizard school and then he'd be a fully qualified wizard at the end of it. That's the... But in recent years, Rowling has become known for something more controversial. The woman who is likely the world's best-known children's author is defending herself against growing accusations of transphobia.

She had taken some public stances arguing that women as a political class, biological class, had been eroded by some of the trans activism in the UK and elsewhere. That's our colleague Eric Schwartzel. She really very quickly became, for many trans rights activists, the face of their opposition. Rowling has said that she's not against trans people, but that she's worried about preserving women's rights.

Still, her statements turned her into a divisive figure. And the company behind the hit Harry Potter movies, Warner Brothers, found itself in a difficult position. She wanted a stronger show of support. She wanted Warner Brothers to say that they had her back. And instead, they would put out statements that were a little bit more, you know, we value relationships, we value opinions of all kinds.

It was more general than what she and her camp wanted. And so it really alienated her. The relationship between Rowling and the company grew tense. But because of her connection to Harry Potter, Rowling was still a powerful figure at the studio. No franchise is more iconic to the Warner Brothers Discovery brand and its future than Harry Potter. And she has over time, in part due to the incredible success of the franchise and the credibility that that has bought her, she has just continually accrued more and more power in the relationship.

Now, Warner Brothers Discovery is in a tough financial situation. And its new leaders want to salvage its relationship with the author and get itself a little more Potter magic. and get itself a little more Potter magic. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Friday, March 1st. Coming up on the show, Harry Potter and the Author Conundrum. lovely aromas of apple. This light-bodied, fruity cider offers a crisp, clean finish, perfect for sunny days and warm nights. Enjoy it well-chilled or over ice. That's refreshing. That's Summersbee. Must be legal drinking age. Please drink responsibly. Carlsberg, Canada Inc., Waterloo, Ontario.

Are you a big Harry Potter fan? I am a fan. I mean, I'm 37, so I was at the perfect age for Pottermania. And so I read all the books almost as they came out. I do remember going to get either book five or book six at midnight at the local Barnes & Noble and reading it that night. So which Hogwarts house are you? I've thought about this. I think most every journalist is a Ravenclaw. I agree. I was going to say. You know, overachieving readers with a healthy amount of wit.

Yeah, I think we're Ravenclaws. J.K. Rowling started to build her wizarding world in the 1990s, and Warner Brothers saw potential right away. Before the first book was even released in 1997, a producer at the studio got a look at an early copy. This might be the single greatest bet in modern Hollywood history because there was a producer named David Heyman

who read the unpublished manuscript of the first Harry Potter book. He liked the idea, he liked the characters, he thought it had something, and he took it to Warner Brothers in early 1997, and they secured the rights to the series. From the get-go, J.K. Rowling wanted to be closely involved in how Harry Potter would be adapted. J.K. Rowling made it clear that she did not want it to be a, you know, sign here on the dotted line and we'll get you two tickets to the premiere. It was going to be a very close relationship

because, as she would often say, these characters were like her children and she was going to have joint custody. So what was her influence? The key to understanding her leverage at that time was that she really was synonymous with Harry Potter. She had a lot of credibility among fans. And there was concern that if she didn't like the way something had

been handled, didn't like the execution on it, that she would speak out about it. And that could potentially alienate millions of fans from their product. The concern there sounds like, if she said, this wasn't really how I envisioned it, that fans would side with her over the studio. That's right. So the famous example that came up in the course of my reporting was an interview that she gave early in Pottermania on 60 Minutes. And at the end of the interview,

they're talking about all of the offers that she is fielding to put Harry Potter on T-shirts or put him in airplane commercials or put him anywhere they can. If people could see the kind of offers I've had to use Harry in advertising and publicity and all sorts of ridiculous, frankly, things, and I've said no to absolutely all of them. I think she really has always from the start known how oversaturation can really cheapen a franchise or diminish a property. And so at the end, the interviewer, Leslie Stahl, starts asking her about a future in which Harry Potter might be on TV or might be in an action figure. You're going to have a television series. You're going to have action figures. I don't know about the television series. Possibly.

Possibly. Action figures. Don't say action figures. And you can watch J.K. Rowling visibly blanch at the idea. Well, whatever. I'm a mother. I hate action figures. And she looks a bit shocked at what she's saying. And then there's

this moment where she says. And I can only say now to all the parents out there, if the action figures are horrible just tell the bit shocked at what she's saying. And then there's this moment where she says, And I can only say now to all the parents out there, if the action figures are horrible, just tell the kids that I said don't buy them. Sorry, Warners. And she's shocked at what she said, and she says, sorry, Warners. And that's the last note of the interview.

Is that common between creators and their IP? Like, the way that Rowling viewed Harry Potter and the type of control she was able to have over it as a result? Like, I'm thinking about George Lucas in Star Wars with Disney. Like, is this type of relationship something that we see in other parts of the business? Well, you're getting at a core element to the story, which is that there's always tension between the creator of a story and the studio that is charged with telling it. There's always going to be that tension. But I think in this case, it is singular because probably not since George Lucas have we had a book or a film or some work of art so closely associated with an author. How far did Rowling's influence go in Warner Brothers over the years?

Oh, I mean, I would talk to people who, frankly, I would hang up and I would think to myself, is J.K. Rowling the most powerful person at Warner Brothers Discovery? So, for instance, starting around, I think, 2015 or 2016, they started hosting these meetings where everyone would go to London or New York and meet her usually about twice a year and basically fill her in on all of their plans. And J.K. Rowling dubbed them the Ministry of Magic meetings. And they'd sit around the table and they'd say, here's what we're thinking about doing here. And she might in that meeting issue a yes or no vote. Wow. So she had veto power, essentially.

She did. She did. I mean, it was de facto veto power. Rowling wanted to be involved in all kinds of decisions. And over time, that started to wear among the folks at Warner Brothers. There were a lot of executives who at various times were ready to pull their hair out. There's this story I heard about the chocolate frogs, which are these, like, they're exactly what they sound like. They're little frogs made of chocolate. And they're from the books, and you can buy a version of them at the parks.

Naturally. Exactly. And at one point, J.K. Rowling emailed the executives at Warner Brothers and was asking them why the chocolate used in the chocolate frogs wasn't sourced fair trade. Wow. But although Rowling's attention to detail frustrated many at Warner Brothers,

Harry Potter became a global phenomenon. How much is the Harry Potter franchise worth today? Billions of dollars. I mean, untold billions of dollars. I mean, it stretches from books that are still bestsellers. Chapter one, The Boy Who Lived. Movies that are among the highest grossing films in Warner Brothers history. You're a wizard, Harry. I'm a what? A wizard. I think probably the way that most fans are interacting with the franchise today

is probably through the theme parks. Hey, everybody. Today I'm at one of my favorite places on the planet, Universal's Wizarding World of Harry Potter. And then, of course, in video games, which is a relatively new development, but a massively successful one. There was a game that came out last year called Hogwarts Legacy. Now it is time to add your own story to these hallowed walls. That was the best-selling game of 2023. It ended up generating more than a billion dollars in revenue.

It's wild. And that's just on one game alone. And we haven't even covered toys, merchandise, the Broadway show that's still going. I mean, it really is just a cash machine. But it wasn't pure magic. cash machine. But it wasn't pure magic. Starting in 2019, Rowling began making those comments on gender and sex. At one point, she mocked the term people who menstruate. In another tweet, she wrote, quote, if sex isn't real, the lived reality of women globally is erased. I know and love trans people, but erasing the concept of sex removes the ability of many to meaningfully discuss their Some Potter fans were hurt.

From their point of view, the creator of one of the world's most famous outcasts was herself targeting a marginalized group. So J.K. Rowling has been back on the transphobia train recently. The fact that she has chosen violence when she has had every chance to choose love and learning reveals the true nature of her character. It's a topic that won't seem to die, so let me make something very clear. If you buy the Hogwarts Legacy game, you are contributing to transphobia, even if you consider yourself an ally, even if you yourself are trans.

Rowling has said that she is not attacking trans people. In a tweet from 2020, she wrote, quote, I respect every trans person's right to live any way that feels authentic and comfortable to them. Here she is on a podcast called The Witch Trials of J.K. Rowling. Women, by virtue of their biology, are subjected to specific harms, specific pressures, and require certain protections. And that is inextricably linked with our biology,

and we cannot fight for our rights without naming and accurately describing what makes us different from men. The controversy around Rowling largely didn't impact Harry Potter's commercial success. Even though some fans weren't thrilled with the author, they were sticking with Harry. But the stars of the Harry Potter films distanced themselves from Rowling. And in 2022, when HBO Max released a special celebrating the first film's 20th anniversary, almost everyone from the original cast appeared.

So Daniel Radcliffe and Emma Watson and Rupert Grint, all of whom we were first introduced to when they were prepubescent, are now these young adults. How do we all feel being back and talking about this? A, really emotional, obviously. They gather to have this reunion slash nostalgia fest about the Harry Potter films and bringing them to life.

Right. And yet, one very notable person was missing from that reunion. That's right, J.K. Rowling herself. She said she didn't want any involvement with it. But perhaps surprisingly, the executives at Warner Brothers were very relieved when they heard that that was the case. And so it was one of the moments when her kind of public image and how that had changed really came to a head in the business relationship. And how that had changed really came to a head in the business relationship.

But just a few months later, Warner Brothers would become Warner Brothers Discovery. And a new CEO was ready to bring Rowling back into the fold. That's next. Whether you're practicing your morning breath work, waiting for your favorite artist to come on stage, or running errands at the perfect pace, liquid IV powder helps you turn ordinary water into extraordinary hydration so you can live a more extraordinary life. Live more with Liquid IV Hydration Multiplier.

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Add your teen to your Uber account today. In 2022, the company that made the Harry Potter movies, Warner Brothers, merged with Discovery. It created a huge entertainment conglomerate that now owns everything from CNN. This is CNN breaking news. ...to HBO... Welcome to the white lotus. ...to Animal Planet. And it had the biggest movie of last year. Hi, Barbie.

Hi, Barbie. Hi, Barbie. Hi, Barbie. Hi, Barbie. But all that name recognition still hasn't meant good business for Warner Brothers Discovery. How have things been going since the merger? Not very well. The share price is down more than 60% since the merger of the two companies that formed Warner Brothers Discovery.

There's a sense when you talk to people that they don't really know what the future holds for a company, which is obviously an interesting thing to hear about a company of any size, but when it's as big and as storied as Warner Brothers, you really sit up and notice. Fixing Warner Brothers' discovery is the job of new CEO David Zaslav. And one of his first orders of business was to build up the Harry Potter brand. It was still a huge moneymaker for the company. But the recent spinoff series, Fantastic Beasts, was a commercial disappointment. The series was supposed to have five films, but the future is in doubt after only three.

To reinvent Harry Potter for a new generation, Zaslav needed to salvage the relationship with J.K. Rowling. So he hopped on a plane to London to meet the author in person. It was the first time she had seen a Warner Brothers executive in two years. Now, you could say, well, that was mostly during COVID, and that's true, but she was also ignoring Zoom calls. She wasn't meeting digitally either. So they met in London. And my understanding is that he just really spent it trying to get to know her. And introducing himself to her, too, because he was a brand new CEO for her to meet as well.

The dinner ended up lasting four hours. And over the next few months, company executives continued to meet with Rowling. Then, on an earnings call in February, Zaslav made it clear that Rowling was back on board. And we spent some real time with J.K. and her team. Both sides are thrilled to be reigniting this franchise. Our conversations were great, and we couldn't be more excited about what's ahead. And What's Ahead is a big Harry Potter TV series.

The TV show is based on those original seven books that you and I read. So basically, the plan, I think, is for about one book per season. So you might have six to eight to 10, 12 episodes exploring one book. So you can get into a lot more of the details. And the plan is then do it over all seven books. So this might be a potentially 10-year project costing $2 billion.

Untold amounts of money, yeah. An absolutely insane amount of money. They're meeting with TV writers now, a small number of whom are going to pitch J.K. Rowling herself. And if you're David Zaslav, you're thinking more and more about streaming and the world of streaming and the world of TV. And so trying to bring your most popular franchise

to your most important medium is going to be paramount. We've not been shy about our excitement around Harry Potter. The last film was made more than a dozen years ago. And for years, even I referenced, you know, in the 60 Minutes interview, she says she has very little interest in a Harry Potter TV show. But a lot has changed, right?

A TV show today looks very different than it did 20 years ago. For one thing, it's often a lot more expensive. You can do a lot more with special effects and sort of cinematic detail. It's also been more than 20 years since those first movies. So this might be a way to bring people

much younger than you and me on board. Ouch. It's a reality. I know. I'm sure Dumbledore has something wise to say about aging and growing old and wise. The TV series is now in development. In that earnings call,

Zaslav said that they're aiming to release the show in 2026. Is Harry Potter enough to save the studio? No, no, no. no single franchises, no. It's a major asset, and it's something that they see the potential value in, but the larger questions facing not just Warner Brothers Discovery, but the traditional studios are so broadly existential and governed by such major trends that no spell or cast can fix it.

So there are seven canon Harry Potter books. Eric, if the Warner and J.K. Rowling story was spread over seven books, which book are we reading right now? Okay, let me think through. Okay, Goblet of Fire. Jump straight to the middle, right? Yeah, I don't think this story's over. We certainly don't have any resolution. So I would say Goblet of Fire for a couple reasons.

Goblet of Fire book five is like, when that came out, that was like peak Potter mania, like millions of copies sold in the first 24 hours. And we were certainly there when it comes to the overall franchise. It is on fire. But as we all know, this is a very combustible relationship. And so I think the fire metaphor works well in many different ways here. So I'd say we're on book five. Goblet of Fire is book four. Oh, it is? Oh, God.

Then we're on book four. Oh, sorry. I'm sorry. For some reason, I thought it was book five. Everything I just said, though, still holds. No, and I actually think it makes sense. It also, book four was also the book, I am revealing so much of myself here.

Book four was also the book that kind of opened up the universe, right? Like before that, everything happened at Hogwarts and you didn't really know whether there was anything else going on. And then they introduced all these other schools, all these other like spaces in the Harry Potter universe. And I feel like just everything that we've talked about, like it's opened up a lot more than it had previously. Oh, that's a far richer literary analysis. I like that. Yes.

I totally agree. I'm not supposed to be doing the analysis here. Totally agree. Well, thank you for this amazing conversation. Really, really enjoyed it. Yeah, me too. That's all for today, Friday, March 1st. The Journal is a co-production of Spotify and The Wall Street Journal. The show is made by

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