Warner Bros. Discovery CFO Says Company Wants to Resolve Strikes ASAP After Disclosing up to $500 Million Earnings Hit From Work Stoppages
The two Hollywood strikes that have ground TV and film productions to a standstill are bad for business — and Warner Bros. Discovery is working diligently to resolve them as quickly as possible, according to CFO Gunnar Wiedenfels.
“It’s an unfortunate situation… We have to get back to work,” Wiedenfels said, speaking Thursday at the Bank of America Media, Communications and Entertainment Conference. WBD is working toward a solution in which “everybody feels they are respected and rewarded fairly.”
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From an operational perspective, “we’re really shut down,” Wiedenfels said. “There’s very little content production going on right now.”
His comments come after Warner Bros. Discovery last week disclosed that it expects the dual strikes to result in $300 million-$500 million hit to full-year 2023 earnings, revising downward its expected adjusted earnings for the year to $10.5 billion-$11 billion. The WGA writers strike began on May 2 and actors who are members of SAG-AFTRA joined them on the picket lines July 14.
According to the WGA estimates, if Warner Bros. Discovery agreed to the union’s proposed contract terms, it would cost the company an additional $45 million a year.
Wiedenfels said that Warner Bros. Discovery CEO David Zaslav “is spending a lot of time with his peers” in working to bring an end to the WGA and SAG-AFTRA work stoppages. “We are confident there will be a solution,” he said, and “once that happens, we will get back to a normal production cadence as soon as possible.”
Wiedenfels said that the media company, when it reported Q2 earnings on Aug. 3, had been “hopeful” the strikes would be over by early September. They weren’t — so WBD issued the warning to investors that the strikes would lower its total earnings given that content releases would be “subdued” in Q3 and Q4, while Warner Bros.’s film slate would be affected to a certain extent because actors under SAG-AFTRA rules are forbidden from promoting struck work.
Widenfels, who appeared at the BofA conference remotely because he has COVID, said the 17 months that have passed since Discovery bought WarnerMedia have been “the most intense 17 months I’ve seen in my career… we’ve chopped a lot of wood.” Much of the work has focused on breaking down silos among the WarnerMedia businesses to achieve better financial results, he said.
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