Warner Bros. Discovery is cutting its profit forecast for the year, saying it could incur up to $500 million in costs from an ongoing strike by Hollywood writers and actors.
The U.S. film and television industry remains Paralyzed by a double whammy.Writers’ strike begins in May Actors joined them too July 14.
Warner Bros. Discovery owns HBO and Max, CNN, TNT, and many other entertainment outlets including DC Comics.
The company said in a regulatory filing that it now expects adjusted EBITDA to be between $10.5 billion and $11.0 billion in 2023, down from a range of $11.0 billion to $11.5 billion.
“While (Warner Bros. Discovery Channel) hopes that these strikes will be resolved soon, it cannot predict when the strikes will eventually end. With both guilds still on strike today, the company now assumes these strikes will have a negative impact on (Warner Bros. Discovery Channel)’s The financial impact will last until the end of 2023,” the company said.
Shares of New York City-based Warner Bros. rose about 2% on Tuesday.
Warner Bros. Discovery has been at the center of ongoing negotiations with Hollywood unions, both because of its status as a major TV and movie studio and because its chief executive, David Zaslav, has been the target of particular criticism. It didn’t help that Zaslav and other media CEOs were criticized for their high pay, and it didn’t help that shareholder advocacy groups found Zaslav to be the “highest paid” CEO in the corporate world. Last year, Zaslav’s total compensation was $39.3 million, but the year before, his compensation was as high as $246 million. Tensions reached a boiling point in May when he was booed during his commencement address at Boston University.
Unlike some of his peers, Zaslav has maintained a conciliatory tone with high-profile writers and actors — at least in public. When the writers’ strike began in May, he urged both sides to find a solution. “Let’s try to figure this out,” he told CNBC in an interview. “Let’s do it in a way that the writers feel like they’re valued — and they are — and that they’re getting paid fairly. And off we go.”
He also gave advice to writers and actors during an earnings call in August, saying the company needs a “great creative community” to produce content. “We all have to work on this, and it needs to be done in a way that the creative community feels fairly compensated and fully valued,” Zaslav said.
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