Warner Bros. Discovery Execs Report $100 Million Savings Due to Writers and Actors’ Strike
Introduction
Warner Bros. Discovery execs reported the Hollywood writers and actors’ ongoing work stoppage had brought the company savings in the “low $100 million range” during its Q2 earnings results call Thursday.
The Importance of the Creative Community
“We’re in the business of storytelling. Our goal is to tell great stories, stories with the power to entertain and, when we’re at our best, inspire with stories that come to life on screens big and small,” CEO David Zaslav said. “We cannot do any of that without the entirety of the creative community, the great creative community. Without the writers, directors, editors, producers, actors, the whole below-the-line crew. Our job is to enable and empower them to do their best work. We’re hopeful that all sides will get back to the negotiating room soon and that these strikes get resolved in a way that the writers and actors feel they are fairly compensated and their efforts and contributions are fully valued.”
Significant Savings due to Strikes
Following Zaslav’s initial remarks, CFO Gunnar Wiedenfels stated that WBD had saved more than $100 million due to the strikes.
Impact on the Studio Segment
Wiedenfels added that the “uncertainty” in the studio segment due to the strikes “may have implications for the timing and performance of the remainder of the film slate, as well as our ability to produce and deliver content.”
Financial Implications
“While we are hoping for a fast resolution, our modeling assumes a return to work date in early September, should the strikes run through the end of the year, I would expect several $100 million upside to our free cash flow guidance and some incremental downside for adjusted EBITDA,” the CFO said.
The Strikes and the Writer’s Guild of America
The Writers Guild of America has been on strike since May 2, as a result of being unable to reach a new contract with the Alliance of Motion Picture and Television Producers (AMPTP) before the clock ran out on the previous one May 1. The Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) joined them July 14 after failing to ink a new agreement with the AMPTP as well.
Efforts to Restart Negotiations
As Haber Tusba reported Tuesday, AMPTP president Carol Lombardini recently reached out to her counterpart at the WGA in an effort to restart negotiations, marking the first communication between the two sides since talks collapsed and the WGA voted to go on strike.
Demands of the Writers and Actors
Writers and actors are demanding studios raise pay rates and residuals for streaming content and develop rules and guardrails around the use of AI in TV and film. The simultaneous strikes by the writers and performers unions — the first dual work stoppage to hit Hollywood since 1960 — have shuttered most TV and film production.
Conclusion
More to come…
