With Hollywood strikes over, more companies look like losers than winners
By Samrhitha A
(Reuters) -The twin summer Hollywood strikes from writers and actors are over, but the effects will linger into next year - and some companies are decidedly worse off than others.
While actors were celebrating news of a tentative $1 billion agreement between the SAG-AFTRA union and studios after a four-month work stoppage, companies that rely on original content and advertising like Warner Bros Discovery, were reeling.
By contrast, streaming giant Netflix appears to have emerged stronger from the period of labor unrest, with strong subscriber gains and a pile of free cash amassed from saving $1 billion on content spending.
The twin strikes - beginning with writers in May, followed by actors in July - were in part responsible for a slump in movie box office after the twin-bill phenomenon of "Barbie" and "Oppenheimer" in the height of summer, as striking actors refrained from promoting their projects.
Netflix capitalized on its heft in global production, its robust reality TV pipeline, and licensing reruns of shows such as NBC's "Suits" and HBO's "Ballers," from media rivals, to keep a flood of fresh content flowing onto the service, picking up 9 million subscribers in the third quarter alone.
Companies like Paramount Global employed similar programming sleight-of-hand, recycling a cleaned-up version of its western drama "Yellowstone" to air on CBS, and streaming CBS's NFL broadcasts on Paramount+.
Warner Bros Discovery suffered a Wall Street drubbing this week after it backed away from its 2024 leverage targets, citing uncertainty surrounding the length of the actors strike and a weak ad market. Its television production business has been hard-hit by the work stoppage.
"It's going to take considerable time before new movies, in particular, will appear on screens given the lengthy post-production process," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
Investors clearly saw Netflix as a winner during the strikes. Since May 2, when writers walked out, its shares rose more than 37%, while most studio stocks slumped, led by Paramount, which plunged 48%.
Walt Disney and NBCUniversal-parent Comcast, meanwhile, saw their earnings hold up better because of their diversified businesses - Disney with parks, Comcast with broadband.
Despite having to delay release of films such as the live-action remake of the animated movie "Snow White," and Marvel studios' "Blade," Disney CEO Bob Iger told CNBC the work stoppage's business impact had "been negligible."
(Reporting by Samrhitha Arunasalam in Bengaluru; Editing by David Gaffen and Shinjini Ganguli)
