Warner Bros. Discovery forecasts its earnings for the year to take a hit of $300 million to $500 million, predominantly due to the impact of the ongoing Hollywood writers and actors' strikes.
According to The Hollywood Reporter, the David Zaslav-led media company revealed in a regulatory filing on Tuesday that it had "lowered its 2023 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) forecast to $10.5 billion-$11.0 billion, a hit of $300 million-$500 million" amid the dual strikes.
Warner Bros. Discovery previously assumed a return to work date in early September. However, with no end to the strikes in sight, the company is now revising its expectations and projecting the financial impact through to the end of 2023, though it remains "hopeful" a resolution will come in the near future.
"While WBD is hopeful that these strikes will be resolved soon, it cannot predict when the strikes will ultimately end. 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 stated in its latest filing, updating its guidance for the year.
At the same time, the media giant raised its free cash flow expectations for the full year to at least $5 billion. "The company now expects to exceed $1.7 billion in free cash flow for the third quarter of 2023, in part due to the strong performance of Barbie as well as incremental impact from strike-related factors," the filing said.
The company emphasized that negotiations to end the strikes remain a top priority. "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," it added.
The Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) joined the Writers Guild of America (WGA) on the picket line to strike against the major studios in July. Hollywood was brought to a standstill by the dual strikes, with several major film and TV productions on pause until further notice.
Warner Bros. recently pushed Dune: Part Two back several months on its theatrical release calendar, from November 3, 2023, to March 15, 2024. The Denis Villeneuve-directed sequel had finished filming, meaning the delay is likely due to promotional issues involving the stars, or the studio trying to spread out its slate a little more.
Adele Ankers-Range is a freelance entertainment writer for IGN. Follow her on Twitter.
