Netflix co-CEO Ted Sarandos addressed SAG-AFTRA and the WGA’s historic double strike at the top of Wednesday’s earnings call.
“This strike is not an outcome that we wanted,” he said. “We make deals all the time. We are constantly at the table negotiating with writers, with directors, with actors, with producers, with everyone across the industry, and we very much hoped to reach an agreement by now.”
Sarandos acknowledged the “enormous pull” strikes can have on families both financially and emotionally, citing his own upbringing in a union household.
“You should know that nobody here, nobody within the AMPTP and I’m sure nobody at SAG or the WGA took any of this lightly,” he added. “But we have a lot of work to do, there are a handful of complicated issues, we’re super committed to getting to an agreement as soon as possible, one that’s equitable and one that enables the industry and everybody in it to move forward into the future.
His comments came as Disney CEO Bob Iger has faced backlash for calling striking actors and writers’ demands “very disturbing” and “just not realistic.” During an interview with CNBC’s Squawk Box, Iger warned that the double strike would be “very disruptive” to the company and the economy.
“It has been a great business for all of these people and it will continue to be even through disruptive times. But being realistic is imperative,” he said. “It will have a very, very damaging effect on the whole business. And unfortunately, there’s huge collateral damage in the industry to people who are support services. I could go on and on. It will affect the economy, different regions even because of the sheer size of the business. It’s a shame. It is really a shame.”
Sarandos declined to say when Netflix’s backlog of content would run out. However, the company noted in its quarterly shareholder letter that it expects lower cash content spend in 2023 than originally anticipated due to “timing of production starts and the ongoing WGA and SAG-AFTRA strikes.”
“We put some of our upcoming content in the letter. We said in the last call, we produce heavily across all kinds of content, TV, film, unscripted, scripted, local, domestic, English, non-English, all those things. And they’re all true,” Sarandos added. “But it’s besides the point. The real point is we need to get the strike to a conclusion, so that we can all move forward.”
While the company said the decreased content spend “may create some lumpiness in [free cash flow] from 2023 to 2024,” it plans to deliver “substantial positive [free cash flow] in 2024.” Netflix anticipates free cash flow of at least $5 billion for 2023, up from its previous estimate of at least $3.5 billion.
Netflix shares fell over 8% following the earnings announcement.
