Warner Bros Unveils Astonishing Loss Projection Exceeding Writers' Demands
Warner Bros faces mounting pressure as strike-related financial losses soar, but will they finally engage in meaningful negotiations with writers?
Summary
Warner Bros. Discovery is facing up to $500 million in losses due to ongoing strikes by the Writers Guild of America (WGA) and SAG-AFTRA.
Warner Bros. Discovery has not demonstrated a willingness to address the strike and their language indicates a lack of intention to engage in negotiations. The outcome of both strikes is uncertain due to the studios' refusal to negotiate.
Warner Bros Discovery is bracing for significant financial consequences due to ongoing strikes by the Writers Guild of America (WGA) and the actors union SAG-AFTRA. The WGA has been demanding fair compensation for over four months, and on July 14, SAG-AFTRA joined them in their picketing efforts. As negotiations stall, studios are being forced to shut down operations.
According to The Hollywood Reporter, Warner Bros. Discovery is expected to suffer strike-related losses of up to $500 million. In response to this, the studio has revised its projected 2023 earnings before interest, taxes, depreciation, and amortization (EBITDA) from $11 billion-$11.5 billion to $10.5 billion-$11.0 billion. As a result, the strikes will have a negative impact on the studio's EBITDA, estimated to be approximately $300 million-$500 million. CEO David Zaslav has issued a statement regarding the strike and its financial ramifications, which can be found below:
Will Strike-Related Financial Losses Put Enough Pressure on Studios to Settle Strike?
Despite the hopeful outlook of WBD, the resolution of these strikes remains uncertain, making it difficult to predict their ultimate end. Given that both guilds are still on strike at present, it is expected that the financial consequences for WBD will continue until the end of 2023.
Despite Warner Bros.' expressed hopefulness for a resolution to the WGA and SAG-AFTRA strikes, little evidence has surfaced to indicate their genuine willingness to bring an end to the ongoing dispute. In a recent statement, SAG-AFTRA chief negotiator Duncan Crabtree-Ireland revealed that the studios have effectively halted progress by consistently refusing to engage in negotiations. Crabtree-Ireland went as far as accusing the studios of intentionally prolonging the strike. Consequently, it appears that Warner Bros. Discovery may be pretending to be uncertain about when the strikes will finally be resolved.
Warner Bros. Discovery's recent projections further highlight the studios' absurdity in this strike process. According to a Reuters report from the beginning of the strike, the Writers Guild of America's proposed changes would result in a cost of around $429 million per year for Hollywood. While this is a significant amount, it is actually lower than the highest projected EBITDA loss of just one studio, Warner Bros. Discovery.
These numbers reveal an ironic situation regarding the studio's stance in the strike. Despite claiming that the writers and actors' demands are financially burdensome, Warner Bros. Discovery and other studios have actually experienced greater financial losses. Despite their projected losses, Warner Bros. Discovery has not shown a willingness to settle the strike, and their rhetoric does not indicate a willingness to negotiate. As a result of the studios' refusal to negotiate, the outcome of the WGA and SAG-AFTRA strikes remains unclear and ambiguous.
Source: THR, Reuters
