Warner Bros. Discovery Says Strikes Will Result in Up to $500 Million Hit to Earnings

The strikes continue. This past May, the Writers Guild of America began its long-anticipated strike, sitting out of work in an effort to get a stronger deal with the Alliance of Motion Picture and Television Producers. WGA's main calls for change come within streaming, as writers are not currently earning proportional residuals from popular streaming originals to what came as a result of high-viewed broadcast projects. Beyond that, WGA is seeking definitive protection from the rise of artificial intelligence, as AI-generated content nears closer to being uncanny.

Two months after WGA's strike began, the Screen Actors Guild began a strike of its own, having similar demands to its screenwriting peers. SAG-AFTRA's sit out put Hollywood on pause completely, with both ongoing productions and scheduled press tours being shut down for the foreseeable future.

While there is no timetable as to when these strikes will resolve, every day that they continue, millions of dollars are lost.

Warner Bros. Discovery Will Lose Half of a Billion Dollars

As shared by The Hollywood Reporter, Warner Bros. Discovery has altered its 2023 adjusted earnings from a range of $11.0-$11.5 billion to $10.5-$11.0 billion "predominantly due to the impact of the strikes," meaning the company is expecting to lose up to $500 million. These adjusted earnings are calculated before interest, taxes, depreciation and amortization.

"While WBD is hopeful that these strikes will be resolved soon, it cannot predict when the strikes will ultimately end," WBD said in its Tuesday filing. "With both guilds still on strike today, the company now assumes the financial impact to WBD of these strikes will persist through the end of 2023. The company will continue to update its assumptions based on the timing and any additional impacts of the eventual resolution of the strikes."

The exact areas where WBD will lose this money are unclear, but one major area comes in the form of Dune: Part Two. WBD's blockbuster sequel was originally set to hit theaters in November before it was delayed to March 2024 as a result of the strikes. Dune: Part One was released day-and-date in Fall 2021 but still managed to become a worldwide box office success, earning $402 million on a $165 million budget. With Dune: Part Two's budget down to a reported $122 million and an exclusive theatrical release ahead, early projections had it grossing nearly double the original's box office haul.

"WBD continues to prioritize and work diligently with other industry leadership to resolve the current WGA and SAG-AFTRA strikes in a manner that is fair and values the important work of, and partnership with, the writers and actors," the filing added.