Warner Bros. Discovery says Hollywood strikes will cause up to $500M hit to 2023 earnings
Warner Bros. Discovery (WBD) estimated the ongoing writers and actors strikes will cost between $300 million to $500 million from lost 2023 earnings as TV and film productions remain halted, according to a new securities filing.
Warner Bros. Discovery said it is expecting its adjusted earnings before interest, taxes, depreciation and amortization to take a hit of $300 million to $500 million, for full-year earnings of $10.5 billion to $11 billion.
The projected hit is “predominantly due to the impact of the strikes,” the company wrote Tuesday in a filing with the U.S. Securities and Exchange Commission.
While maintaining its financial disclosures are not a prediction of when the strikes will end, WBD said it expects to feel the impact of the strikes through the end of 2023.
“While WBD is hopeful that these strikes will be resolved soon, it cannot predict when the strikes will ultimately end,” the company wrote.
The company also said it expects to exceed its free cash flow expectations thanks to the "strong performance" of the "Barbie" movie, which is now Warner Bros.'s highest-grossing release ever.
The strike by members of the 11,000-member Writers Guild of America (WGA) began in May after failed contract negotiations with the studio chiefs of the Alliance of Motion Picture and Television Producers.
The strike marks the longest strike in WGA history and has paused TV and film productions in Hollywood for more than the past 100 days.
SAG-AFTRA, the largest union for Hollywood actors, joined the strike two months later in July after failing to reach an agreement with film studios, marking the first dual strike since 1960.
Both unions are demanding better wages and working conditions as well as higher residual rates related to streaming.
Shortly after the strike began, David Zaslav, the CEO of Warner Bros. Discovery, was heckled with chants of “pay your writers” while delivering a commencement speech at Boston University in May.
On a call last month with analysts, Zaslav reportedly said he hopes all sides will return to the negotiating table to resolve the strikes “in a way that the writers and actors feel they are fairly compensated and their efforts and contributions are fully valued,” according to Variety.