In unfortunate news for Warner Bros. Discovery, the ongoing Hollywood strikes have taken a toll on the company’s earnings. CFO Gunnar Wiedenfels expressed the urgency to resolve the strikes as quickly as possible, as they are causing significant disruptions to TV and film productions. Speaking at the Bank of America Media, Communications, and Entertainment Conference, Wiedenfels emphasized the need to get back to work while ensuring that everyone involved feels respected and fairly rewarded.
The impact of the strikes on Warner Bros. Discovery’s operations has been considerable, with Wiedenfels stating that there is very little content production happening at the moment. Last week, the company disclosed that the strikes are expected to result in a $300 million to $500 million hit to its full-year 2023 earnings. Consequently, the company revised its expected adjusted earnings for the year to $10.5 billion to $11 billion.
According to estimates from the Writers Guild of America (WGA), accepting the proposed contract terms would cost Warner Bros. Discovery an additional $45 million annually. Despite these challenges, Wiedenfels expressed confidence in finding a solution to the strikes. CEO David Zaslav is actively engaging with industry peers in resolving the issues, and once an agreement is reached, the company aims to resume normal production as soon as possible.
During the Bank of America conference, Wiedenfels also discussed the intense nature of the past 17 months since Discovery acquired WarnerMedia. The focus has been on breaking down silos within WarnerMedia to achieve better financial results. However, the CFO revealed that he was participating remotely due to his COVID diagnosis, highlighting the ongoing challenges faced by the industry amid the pandemic.
Warner Bros. Discovery had initially hoped for the strikes to end by early September when it reported its Q2 earnings. However, with the strikes continuing, the company issued a warning to investors regarding the expected impact on earnings. Content releases in Q3 and Q4 are expected to be subdued, and the promotion of Warner Bros.’ film slate will be affected due to SAG-AFTRA rules forbidding actors from promoting struck work.
As the strikes continue to create roadblocks for Warner Bros. Discovery, the company remains determined to find a resolution promptly. The industry as a whole is eagerly awaiting an end to the strikes, which have caused significant disruptions and financial losses.