Warner Bros Discovery already seeing financial hit from strike
Jenny Goldsberry
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Warner Bros. Discovery admitted in Thursday’s earnings call that the Hollywood strike has affected its earnings and warned it could continue.
The company reported a $1.24 billion loss this second quarter. CFO Gunnar Wiedenfels described the “modest cash savings” the company has on hand as the Screen Actors Guild-American Federation of Television and Radio Artists and Writers Guild of America 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.” Free cash flow was $1.7 billion this quarter, more than double the $789 million from the same time last year.
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“While we are hoping for a fast resolution, our modeling assumes a return-to-work date in early September,” Wiedenfels said.
CEO David Zaslav also expressed his desire to settle with the unions “as soon as possible.”
The losses were greater than expected, with Zacks Investment Research having estimated a loss of 39 cents per share. Instead, the loss reflected 51 cents per share.
“The remainder of feature films this year as well as Warner Bros TV production, release dates, and performance expectations are naturally fluid given the ongoing strike and we’ll evaluate our options and update the market accordingly; we’ll see greater vulnerability against our forecast,” Wiedenfels went on.
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Meanwhile, SAG-AFTRA raised $15 million through its Emergency Financial Assistance Program since its strike began. This came as a result of donations of $1 million or more from celebrities including George Clooney, Matt Damon, Leonardo DiCaprio, Hugh Jackman, Dwayne Johnson, Nicole Kidman, Jennifer Lopez, Ryan Reynolds, Julia Roberts, Arnold Schwarzenegger, Meryl Streep, and Oprah Winfrey.
This is the first SAG-AFTRA strike in 43 years. This is also the first time WGA and SAG-AFTRA are simultaneously on strike in 63 years; during the last joint strike, Ronald Reagan, then an actor, served as a union leader. WGA has been on strike for over three months.