WarnerBros. Discovery CEO David Zaslav expressed optimism on Wednesday that a deal between the AMPTP and SAG-AFTRA will be reached soon, which would put an end to the historic strike.
“We are hopeful we will reach a resolution to the SAG-AFTRA strike soon. We made a last and final offer, which met virtually all of the union’s goals and includes the highest wage increase in 40 years and believe it provides for a positive outcome for all involved,” Zaslav said on the company’s third quarter earnings call. “We recognize that we need our creative partners to feel valued and rewarded and look forward to both sides getting back to the business of telling great stories.”
Executives at Warner Bros. Discovery also made note of the financial impact both the SAG-AFTRA and the WGA strikes have had on the company’s finances. During the prepared comments at the top of the earnings call, CFO Gunnar Wiedenfels explained that pre-cashflow for the quarter was up partially due to “some benefits from the strikes.” In the third quarter of 2023, pre-cashflow was a $2.1 billion compared to the negative $200 million the company saw this time last year.
“The vast majority of the improvement has been the result of our transformation efforts and relentless focus on efficiencies across the enterprise, from finding deeper cost synergies, with more than $3 billion of incremental cost synergies flowing through this year, to driving working capital improvements and far greater discipline on capital allocation,” Wiedenfels said.
The CFO also revealed that the company expects to see a “recovery” on the studio side after the SAG-AFTRA strike comes to an end but noted it’s “too early to be any more specific.” Networks revenue for the quarter was $4.87 billion, a 7% drop from this time last year. This decline was credited to certain large licensing deals from the prior year as well as the impact of the WGA and SAG-AFTRA strikes.
However, the overall content revenue for the quarter increased by 3% to $3.27 billion, a jump that was credited to Warner Bros. Discovery’s theatrical and games division.
The AMPTP and SAG-AFTRA are currently in the middle of negotiations. After meeting until late in the night on Monday, SAG’s negotiating committee spent 10 hours deliberating on Tuesday . They are set to meet again Wednesday. AI remains a major issue as the two continue to negotiate.
