At Warner Discovery it’s lean times, except for the movie studio bosses

Among the concerns was Gyllenhaal’s desire to shoot “The Bride!" in New York City. Netflix pushed for New Jersey because it would be cheaper, people familiar with the matter said.

The co-chairs and CEOs of the Warner Bros. motion picture unit, Mike De Luca and Pam Abdy, stepped in to foot the bill. The movie’s costs, including production and marketing, will likely exceed $100 million, a figure some Hollywood executives say is rich for the period drama, which is scheduled for release in the fall of 2025.

“It’s a risk to take on me, and they really have supported me in every way," said Gyllenhaal, adding that the pair never pressured her “and I know that’s something that can happen, especially on a big-budget movie."

De Luca and Abdy have long had a reputation in Hollywood for being talent whisperers with a willingness to spend. Their aggressive dealmaking since assuming their posts two years ago has cast them as outliers inside parent company Warner Bros. Discovery, a media conglomerate that is in austerity mode.

With a debt load of nearly $40 billion and a stock price down about 50% over the past year, Warner has been trimming costs just about everywhere. On Wednesday, the company reported a nearly $10 billion loss primarily because of a write-down of the value of its cable networks.

The company’s TNT network was unable to strike a new deal to hold on to its rights to National Basketball Association games because it didn’t want to pay as much as rivals NBC and ESPN.

Many movies and TV shows have been removed from Warner’s Max streaming service, and Turner Classic Movies, which plays old films, had much of its staff eliminated. This summer, some 800 jobs are being eliminated across the company, on top of the several thousand job cuts over the past two years.

When it comes to spending on content, De Luca and Abdy have been spared the scrutiny some other departments have faced, some executives inside the company say. Some describe the duo as the “chosen children" of Warner Discovery Chief Executive David Zaslav, a movie buff who counts the De Luca-produced “Moneyball" as one of his favorites.

Stephen Galloway, dean of Chapman University’s film school, said the problems in the theatrical business—with consumers going to the theater less than they used to—make it hard to justify heavy spending. That is especially true for a company like Warner Discovery, which is also battling other challenges.

Zaslav, he said, “has much bigger concerns" than the stagnant movie business.

De Luca and Abdy’s admirers say they are paying what the market justifies in competitive situations, and aren’t just trying to make splashy deals. A senior Warner studio executive said the pair are under the same level of scrutiny as their counterparts throughout the company and added that their film slate carries a fraction of the overall annual budgets of other content divisions.

Following ‘Barbie’

Last year, Warner’s global box-office market share was 11.6%, behind Universal and Disney, according to Comscore, in a year when all studios were hit by a monthslong labor strike that delayed production and paused new releases. The megahit “Barbie," which surpassed $1 billion in box-office revenue, and “Wonka" were among Warner’s strongest performers.

Those films were approved by the previous regime, as were disappointments like this summer’s “Furiosa." Movies hatched on De Luca and Abdy’s watch are just now starting to hit the big screen. The first one—“The Watchers" from Ishana Night Shyamalan, daughter of filmmaker M. Night Shyamalan—performed poorly at the box office.

This past weekend, “Trap" from M. Night Shyamalan took in only $15.4 million in the domestic box office, a disappointing showing that was lower than what the studio hoped.

“We have a really good team with Mike and Pam," Zaslav said of the movie production unit on an earnings call. “We’re encouraged by our slate ahead. We’re still working our way through the slate that we inherited."

The movie industry faces big challenges as consumers embrace streaming and it becomes harder to persuade people to go to a theater. Most studios aren’t in risk-taking mode, preferring to count on established franchises and superheroes.

At Warner, the pair is trying to create a diverse slate of movies—horror, science fiction and adult dramas, as well as the occasional sequel. Comic-book films, with the exception of “Joker," are left primarily to Warner’s DC unit, which doesn’t report to De Luca and Abdy.

Catering to talent

The duo has made flashy deals with stars such as Tom Cruise, Timothée Chalamet, George Clooney and Margot Robbie as well as filmmakers like Ryan Coogler.

Big bets include “Mickey 17," a science-fiction effort from Oscar winner Bong Joon-ho (“Parasite"), and the mob movie “Alto Knights" starring Robert De Niro. Both were originally to premiere this year but now are planned for 2025.

“Mickey 17" has a production budget of at least $120 million and a cast that includes Robert Pattinson and Mark Ruffalo. The movie has been through scheduling delays and now is set to be released in January, a month typically seen in Hollywood as a dumping ground.

“An expensive question mark" is how David Herrin, founder of the film-tracking firm The Quorum described “Mickey 17," adding, “Once you move a movie to January it telegraphs that you don’t think this is an Oscar contender."

The production budget for the sequel to the massive hit “Joker" has ballooned to the $200-million range, more than three times the original movie. “Joker: Folie à Deux," which has Lady Gaga joining star Joaquin Phoenix, is a musical, which might not be what fans of the first one are expecting.

De Luca and Abdy don’t just open their wallets—they have a reputation for catering to talent. To land “Black Panther" director Coogler’s as-yet-untitled supernatural thriller starring Michael B. Jordan, the studio agreed to give the copyright of the movie back to Coogler after 25 years. It is a rare concession that was a bridge too far for other studios. Some at Warner were against it for fear of setting a precedent.

Art-house filmmakers are also getting big checks. Director Paul Thomas Anderson, a critical darling whose credits include “Magnolia" and “Licorice Pizza," has a budget of more than $140 million for his next movie, which stars Leonardo DiCaprio and Sean Penn.

That amount is more than double his typical budget. The highest-grossing movie of Anderson’s career is 2007’s “There Will Be Blood," which took in $76 million at the box office.

Warner executives say DiCaprio’s box-office track record justifies the budget for Anderson. DiCaprio’s payday for the movie is $20 million.

‘Big swings, nothing safe’

Bryan Lourd, chief executive of the powerhouse talent agency CAA, applauds the pair’s willingness to take risks. “All big swings, nothing safe about it," he said of their approach. The marketplace wants “differentiated premium experiences," and they are “backing many of the best artists in the business," he added.

A force in the industry for more than three decades, De Luca was only 27 when named president of production for New Line Cinema, where he championed commercial and critical successes such as “Austin Powers," “Seven" and “Boogie Nights."

Before joining Warner in 2022, he was chairman of MGM’s Motion Picture Group Studios, and Abdy was president. The pair had a mixed record. Successes included “Dog," while expensive misses included “Gucci" and “Cyrano."

Still, they were credited with pumping life into what was perceived as a moribund studio and increasing its value to suitors. The pair left after MGM was acquired by Amazon in a deal valued at $8.5 billion.

What appeals to filmmakers is that De Luca and Abdy don’t see movies as “just a product or a commodity," said director Tim Burton, whose long–awaited sequel to “Beetlejuice," titled “Beetlejuice Beetlejuice," is scheduled for release by Warner this fall.

“Wonka" producer David Heyman credits them with encouraging a new take on the ending “that had a significant impact on making it a better film."

“Yes, there will be failures," Heyman said of the challenge moviemakers face, “but we mustn’t use that to prevent us from moving forward and taking risks. And I think Mike and Pam believe that and know it."

Write to Joe Flint at Joe.Flint@wsj.com