Warner Bros. Discovery, the media conglomerate that owns HBO, CNN, and other entertainment outlets, is revising its profit expectations for the year due to ongoing strikes by Hollywood writers and actors. The company anticipates incurring costs of up to $500 million as a result of the strikes, which have been ongoing since May for writers and since July 14 for actors.
In a regulatory filing, Warner Bros. Discovery stated that it now expects adjusted earnings before interest, taxes, depreciation, and amortization for 2023 to be between $10.5 billion and $11 billion, down from the previous estimate of $11 billion to $11.5 billion. The company expressed hope that the strikes would be resolved soon but acknowledged that it cannot predict when they will end. As a result, Warner Bros. Discovery anticipates that the financial impact of the strikes will persist through the end of 2023.
Despite the challenges posed by the strikes, shares of Warner Bros., which is headquartered in New York City, rose approximately 2% on Tuesday.
The strikes have had a significant impact on the U.S. film and television industries, with productions being halted or delayed. The writers' strike, which began in May, was followed by the actors joining in July. Both guilds have been demanding better pay and working conditions.
The strikes have disrupted the production of popular television shows and movies, causing financial losses for studios and delays in the release of new content. The strikes have also affected the livelihoods of numerous industry workers, including writers, actors, and other crew members.
As the strikes continue, industry stakeholders, including Warner Bros. Discovery, are closely monitoring the situation and adjusting their expectations accordingly. The hope is for a swift resolution that satisfies the demands of the striking guilds while allowing the industry to resume normal operations and meet audience demand for new and compelling content.