Paramount Global hosted its second-quarter earnings call Tuesday amid the ongoing writers and actors strikes in Hollywood. Just like every other major media company that has reported its Q2 results already, the CBS parent companys execs addressed the work stoppages with hopes for a timely resolution and comments on how it will affect their business operations.
We anticipate continued delays in production for the duration of the strikes, and as such, we estimate free cash flow in the back half of the year will be significantly higher than previously expected, Paramount CFO Naveen Chopra said.
Chopras projection comes a week after Warner Bros. Discovery CFO Gunnar Wiedenfels stated that the company had saved more than $100 million in Q2 as a result of delayed and scrapped productions during the Hollywood strikes.
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.
Paramount CEO Bob Bakish opened the media giants Tuesday call with some prepared remarks that noted a desire for a timely resolution, as well as a focus on minimizing disruptions to viewers.
Were saddened that, as an industry, we couldnt come to an agreement that would have prevented this, Bakish said. Our partnership with the creative community is critical to the health of our industry. So we remain hopeful for a timely resolution, and we are committed to finding a path forward. At the same time, we have a responsibility to minimize disruptions to our audiences and other constituents. To that end, weve adjusted our CBS fall slate by leaning into the full power of Paramounts content capabilities. On top of the strong sports lineup, new additions to the CBS schedule include Paramount Network hits like Yellowstone and Paramount+ favorites like SEAL Team, as well as pairing the British hit comedy Ghosts with CBSs own popular version of the show, to name a few. The slate illustrates the strength of our global multiplatform asset base and strategy and its one of the ways were staying nimble.
As for how the strike will impact the content pipeline on both the TV and film side at Paramount, Bakish said:
With respect to our film slate, the good news is we have a significant number of films on which production is complete. That includes Killers of the Flower Moon, Bob Marley, John Krasinskis If, as well as A Quiet Place: Day One, and Dear Santa with Jack Black. We also have the Mean Girls musical for Paramount+. Strikes do present some marketing challenges, something were working to assess with respect to our release strategy, but again, were well stocked. And you heard commentary on the CBS alternate schedule, that too draws from our global multi-platform asset base and is very strong.
So from a content perspective, were in pretty good shape. Again, it all comes down to duration. And I want to reiterate that were hopeful that we can solve this as an industry sooner rather than later because wed all like to get back in the content production business. But in the near term, were working to mitigate the damage the impact to our consumers, and other constituents.
Chopra noted that several Paramount+ originals are ready to launch and others, including unscripted fare, are unaffected by the strike, however, there will be some originals that were previously planned to hit Paramount+ that will move into 2024 due to strike related production delays, but its really too early to sort of estimate what the impact of that will be.
He added: I want to emphasize that we remain focused on executing our strategy and that means continuing to scale streaming while maximizing our traditional business to deliver significant total company earnings growth in 24 and create a more sustainable growth model in the process.