In a stunning display of not seeing the forest for the trees, yesterday’s Q2 earnings call for Warner Bros. saw the studio remark on the current impact of the ongoing dual strikes by the WGA and SAG-AFTRA. The good news: they of course hope the strikes will end soon. The bad? Well, it’s not bad for Warner Bros., as it’s attributing over $100 million in savings to the strike action.
Variety reports that Warner Bros. Discovery CFO Gunnar Wiedenfels acknowledged that so far the studio has saved in the “low $100 million range” during the April 1 to June 30 second quarter period, due to the impact of the strikes on projects. That period only covers the time the WGA has been on strike, as the SAG-AFTRA strike began officially on July 14—but speaks to the immediate impact just one of the unions had with its work stoppage.
“While we are hoping for a fast resolution, our modeling assumes a return to work date in early September,” Wiedenfels added. “Should the strikes run through the end of the year, I would expect several $100 million upside to our free cash flow guidance.”
But it’s also a very shortsighted stance to take to see the strikes’ impact so far in the form of cost savings, even if it’s a logical one for Warner Bros. to adopt right now. Sure, in the moment the studio will have less overheads because most new projects aren’t being developed or, now with SAG-AFTRA also on strike, being filmed at all. Warner Bros. already has content in the pocket to release, it will have licensing deals for streaming to rely on—but if the strikes go beyond the vague September window Wiedenfels suggested the studio has modelled, what then? The money the studio is celebrating saving right now isn’t going to suddenly make up for the fact it doesn’t have films and TV shows to make money on.
Still, alongside the celebration of almighty cost savings, both Widenfels and CEO David Zaslav—perpetual Hollywood villain in recent months, and especially with the outbreak of the WGA strike after suggesting that “a love of work” would be what eventually ends the action, not, perchance, a reasonable deal for the striking workers—were more amicable in their comments about the current status of both strikes.
“We’re in the business of storytelling. Our goal is to tell great stories, stories with the power to entertain and, when we’re at our best, inspire with stories that come to life on screens big and small,” Zaslav noted during the earnings call. “We cannot do any of that without the entirety of the creative community, the great creative community. Without the writers, directors, editors, producers, actors, the whole below-the-line crew. Our job is to enable and empower them to do their best work. We’re hopeful that all sides will get back to the negotiating room soon and that these strikes get resolved in a way that the writers and actors feel they are fairly compensated and their efforts and contributions are fully valued.”
The WGA is set to re-enter negotiations with the AMPTP for the first time since the strike began tomorrow, August 4.
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