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.
Though negotiations have yet to resume between the unions and the studios, WBD says it is currently projecting an early September end to the strikes and return to TV and film production.
Were in the business of storytelling. Our goal is to tell great stories, stories with the power to entertain and, when were at our best, inspire with stories that come to life on screens big and small, CEO David Zaslav said on the call with analysts. 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. Were 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 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.
Its 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 theyre fairly compensated in order to do their best work, Zaslav said. And we have to focus on getting that done. Im hopeful that its 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.
Also during the Q2 earnings call, Warner Bros. Discovery CFO Gunnar Wiedenfels stated that WBD had saved more than $100 million due to the strikes in Q2, which ran April 1-June 30. Only WGA was actually on strike during that time, but TV and film productions were already severely impacted by the solo work stoppage.
Wiedenfels added that uncertainty in the studio segment as a result of 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.
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.
As Variety 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 theWGAvoted to go on strike.
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.
When Zaslav was asked about WBDs position on content licensing, he once again brought up the potential impacts of the strike on the business.
The content licensing we have, we have one of the one of the best TV and motion picture libraries in the world, Zaslav said. If you look at the overall economics, I think were actually below the last couple of years, in terms of what were selling. If the strike continues, there may be more demand. Were always looking to maximize. Were hoping the strike gets settled as soon as possible. Its important. Its important that we get going and that we get back to work doing what we love. And were hoping that both of these strikes get resolved soon. Thats our focus.