Warner Bros. Discovery expects the ongoing Hollywood strikes to have a $300-$500 million negative impact on the company’s 2023 earnings.
In an SEC filing Tuesday, the David Zaslav-led media giant stated it was expecting lower adjusted earnings for the full year between $10.5-$11 billion, based on the projection that the continuing WGA and SAG-AFTRA work stoppages will mean a hit of $300 to $500 million for the company.
The WGA strike began May 2 after it failed to ink a new deal with the studios’ org, the AMPTP. SAG-AFTRA joined them on the picket lines July 14.
“While WBD is hopeful that these strikes will be resolved soon, it cannot predict when the strikes will ultimately end,” Warner Bros. Discovery wrote. “With both guilds still on strike today, the Company now assumes the financial impact to WBD of these strikes will persist through the end of 2023.”
Warner Bros. Discovery released this update on its financials ahead of Zaslav participating in an investor conference Wednesday, during which he is expected to discuss the impact of the dual strikes on the company. Without this new information, the investors and analysts listening to Zaslav’s remarks would be working off the most recent financial forecast provided by WBD about the state of its business, which was the Q2 earnings call Aug. 3, when the company had assumed the strikes would be resolved by early September.
At that time, Warner Bros. Discovery CFO Gunnar Wiedenfels disclosed that while the company had saved more than $100 million due to the WGA strike during the second quarter. Should the strikes continue through the end of the year, WBD expected “incremental upside to free cash flow and incremental downside” to earnings “due to the strikes’ impact on timing and performance of the remainder of the 2023 film slate” and Warner Bros. Discovery’s content production pipeline.
“WBD continues to to prioritize and work diligently with other industry leadership to resolve the current WGA and SAG-AFTRA strikes in a manner that is fair and values the important work of, and partnership with, the writers and actors,” the company said in its Tuesday filing.