James Gunn and Peter Safran’s exit from DC Studios was driven in part by cost cutting

This is a mind-boggling situation at Warner Bros./DC. After seemingly being welcomed into the newly formed Skydance (the name of the recently merged Warner Bros. and Paramount), James Gunn and Peter Safran suddenly resigned as co-heads of DC Studios, a decision that came as a shock to just about everyone besides Skydance CEO David Ellison and his colleagues. Now, a report claims that the ouster of the two men was part of an attempt to save money, which, given recent developments, certainly seems plausible.

According to IndieWire, Gunn and Safran’s departure was partly “about cost cutting,” as Skydance prepares to tackle its $80 billion debt and deliver the $6 billion in annual savings over the next three years promised by Ellison. As the outlet puts it, “Skydance was also stunned by Warner Bros’ financial situation.” film unit,” which has struggled to produce many hits in 2026. We already knew that Skydance inherited some huge failures from the Warner deal (including Tom Cruise’s “Digger” and “The Bride!”), but an insider has now told IndieWire that the estimated losses are nearly $1 billion.

According to the report, this played a role in Gunn and Safran’s firing, especially since they oversaw one of the most egregious box office failures of 2026 in “Supergirl.” (The Milly Alcock-led film only grossed $126.5 million at the box office on a whopping $170 million to $186 million budget.) Additionally, sources informed Page Six that “Supergirl” ultimately lost $135 million. So while the film’s performance was always going to have an impact on whether or not Ellison chose to keep Gunn and Safran in their positions, IndieWire’s report indicated that cost-saving measures were even more integral to his decision than we previously thought.

Following the launch of the “Superman” sequel, “Man of Tomorrow,” in 2027, David Ellison reportedly dismantled James Gunn’s DC Universe, thereby resetting the DC film franchise. This is a less than ideal development amid the ongoing superhero fatigue that has already seen the genre fall out of favor with the general public. For Ellison, however, it seems the real motivator is always the same: money.

What makes Gunn and Peter Safran’s exit particularly surprising is that Ellison initially seemed to want to keep them at Skydance. In early October 2026, The Hollywood Reporter cited inside sources saying that DC Studios co-executives met with Ellison and were asked to stay and “keep doing what you’re doing.” According to Page Six, however, plans were already in the works to replace the duo with the new Jeremy Latcham. A source told the outlet: “It was a little strange that it was stated so publicly that (Gunn and Safran) were safe, and meanwhile the process (Latcham) had already been started. They were saying one thing, and then they were actively doing something else.”

But as IndieWire points out, not only did Skydance inherit several failures from Warner Bros. in general, but Gunn and Safran’s deal was “exceptionally generous.” We already knew that the two men reported directly to former Warner CEO David Ellison, who was apparently happy to let them do their thing. But these two were also making tidy profits, with Safran simultaneously running his own company The Safran Company and Gunn earning big salaries for producing “Supergirl” and “Clayface,” and for writing and directing “Superman” and “Man of Tomorrow.” According to IndieWire insiders, Gunn was making up to $10 million per DC movie.

The post-James Gunn and Peter Safran projects of David Ellison make the cost-cutting explanation even more obvious. Jeremy Latcham, who will become president and chief creative officer of DC Studios on December 1, 2026, will now report to Skydance studio executives Dana Goldberg and Josh Greenstein, rather than directly to Ellison. Plus, one thing we know about Latcham is that he has a more mainstream sensibility than Gunn’s prediction for lesser-known, more offbeat DC properties. What does this mean to Ellison? A better chance of making a decent profit compared to Gunn’s plans to give Batman’s two most popular Robins their own movie and produce Mister Miracle animated shows.

Meanwhile, DC Studios hasn’t exactly been the biggest money maker under Gunn and Safran. The Man of Steel is one of DC’s signature characters, but Gunn’s “Superman” has earned $618.7 million in 2025. That’s not bad, but for one of DC’s most popular characters, it’s a bit disappointing (as is the movie). Elsewhere, things were just as disappointing. “Supergirl” was a box office disaster, and DC’s most recent release, “Clayface,” did well, earning $111.7 million on a $40 million budget. Keeping in mind that this is DC, one of Warner Bros.’ crown jewels, you can imagine Ellison taking one look at those numbers with the weight of his financial commitments and simply deciding to part ways with Gunn and Saffron.

For now, Gunn will stay on to oversee the release of 2027’s “Man of Tomorrow.” However, according to a source who spoke to Page Six, this is solely due to Directors Guild of America rules that meant he “could not be removed from his position.” If these reports are accurate, Ellison seems more committed to cutting costs than we thought.