Warner Bros. saved over $100 million in the second quarter of 2023 due to the strikes.
Actors strike update
The WGA and SAG-AFTRA have been on strike for a while, with both unions lobbying for better streaming residuals and protections from the growing use of A.I. in the industry. Warner Bros. Discovery said it is currently projecting the strikes will end in early September.
“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 to Variety.
“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.”
The strikes have led to a pause to most film and TV productions in Hollywood. “It’s critically important that everybody, the writers, the directors, the actors and producers… everyone needs to be fairly compensated and they need to feel valued and feel that they’re fairly compensated in order to do their best work,” Zaslav continued.
“And we have to focus on getting that done. I’m hopeful that it’s going to happen soon. I think all of us in this business are very keen to figure out a solution as quickly as possible. We are in some uncharted waters, in terms of the world as it is today and measuring it all. And so I think, in good faith, we all got to fight to get this resolved. And it needs to be resolved in a way that the creative community feels fairly compensated and fully valued.”
“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.
