’19 Kids and Counting’ Cancellation Leads to Discovery Restructuring Charge

It costs a lot to take care of a family of more than 20.

Discovery Communications last month said it would no longer produce episodes of  “19 Kids and Counting,” a long-running series about the Duggar family, an Arkansas clan of conservative Baptists with many mouths to feed. The show became too controversial for Discovery’s TLC network to handle after the disclosure that Josh Duggar, the family’s oldest son, had sexually molested two of his teenager sisters several years ago.

Getting rid of the series, however, isn’t that simple. Discovery Communications revealed Wednesday that it had taken charges totaling $24 million for its second quarter, and analysts believe the bulk of that money is for writing down the value of the series, which had aired on Discovery-owned networks since 2008. And doing so affected its profit in the quarter, said Michael Nathanson, an independent analyst, in a research note Wednesday.

During a conference call Wednesday, Andy Warren, Discovery’s chief financial officer, said restructuring and other charges were $19 million more than the $5 million the company took in same quarter in 2014, and he cited “the content impairment charge from cancelling TLC’s ’19 Kids and Counting.'”

Taking a writedown for programming that either fails to catch an audience or has to be yanked from the schedule unexpectedly is not uncommon. In 2014 Time Warner’s Turner unit took a write-down of around $400 million for removal of repeats of the CBS dramas “Hawaii Five-0” and “The Mentalist.” The first was distributed by CBS’ syndication unit and the last by Warner Brothers.

“19 Kids” has been a thorn in Discovery’s side for months. Many TLC advertisers warned the company they did not want their commercials to air alongside the program in the wake of the Duggars’ revelation. The show has not aired on TLC since mid-May, and older episodes available for streaming on Hulu were removed from that service.

As much as the Duggars have cost Discovery, the company is likely to spend a little more on the family in the near future. TLC is expected to air a commercial-free one-hour special on child abuse in the fall, and has consulted with advocacy organizations like the Rape, Abuse and Incest National Network in the production of the show. The special program will feature the Duggar daughters who have acknowledged being victimized by their brother. The company is also open to launching a new series featuring members of the family other than Josh, according to a person familiar with the matter.

 

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