For the last several months, executives from pre-eminent media companies have warned that the twin strikes by the unions representing actors and writers could throw major segments of their businesses into turmoil.
While the strikes have allowed media companies to conserve cash that they would otherwise be spending on production, the work stoppages have also frozen the pipeline of movies and TV shows, jeopardizing future profits.
Warner Bros. Discovery — the parent company of HBO, CNN and the Warner Bros. movie studio — said in a securities filing this month that its adjusted profits for the year would likely be between $300 million and $500 million lower because of the strikes. Disney said in August it expected to lower its spending by about $3 billion compared to the previous year, in part because of the labor actions.
“If we can get it resolved soon, then the longer-term impacts will be minimized,” David Zaslav, the chief executive of Warner Bros. Discovery, said this month at an investor conference. “But there are real industry challenges here.”
The strikes — by the Writers Guild in May and SAG-AFTRA, which represents TV and movie actors, in July — have come during a difficult time for Hollywood. Moviegoers have begun to get acclimated to theaters again, and a long-term strike that cuts off new releases threatens to imperil that recovery. And investors have lost patience with streaming, underscoring the importance of profits from traditional exhibition.
Robert A. Iger, the chief executive of Disney, called the strikes “disturbing” in a July interview with CNBC, saying it was the “worst time in the world” to add to the disruption affecting the media industry.
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