Hollywood Strikes Have Saved Warner Bros. Discovery $100 Million So Far

Striking writers and actors saved Warner Bros. Discovery more than $100 million in the second quarter, the entertainment conglomerate said Thursday.

The Writers Guild of America has been striking since May 2, after failing to reach a new contract with the Alliance of Motion Picture and Television Producers before a May 1 deadline. The Screen Actors Guild-American Federation of Television and Radio Artists followed on July 14, also being unable to negotiate a contract.

While writers and actors are foregoing pay as they struggle to negotiate a fair contract, the entertainment giant is saving money.

On the company's second-quarter earnings call with analysts, Chief Financial Officer Gunnar Wiedenfels noted, "modest cash savings from the impact of the WGA and SAG-AFTRA strikes, which we estimate were in the low $100 million range during the quarter."

Warner Bros. Discovery CEO David Zaslav didn't gloat about the savings on the call, emphasizing the vital contributions actors and writers make. Strikers want higher pay, better working conditions, and continued royalties as streaming and artificial intelligence technology transforms their industry.

"We’re hopeful that all sides will get back to the negotiating room soon and that these strikes get resolved in a way that the writers and actors feel they are fairly compensated and their efforts and contributions are fully valued," he said.

The company's revenues and earnings for the second quarter fell below analysts expectations, and its stock dipped more than 1% following their release.

It reported a net loss of $1.24 billion, an improvement from a net loss of $3.42 billion, during the same quarter last year earlier. Revenue rose 5% year-over-year to $10.36 billion from $9.83 billion during the same time last year, but they fell short of analyst expectations.

A decline in its streaming business also disappointed. Global direct-to-consumer streaming subscribers totaled 95.8 million at the end of the second quarter, a decrease of nearly 2 million from the end of the first quarter.

Despite bumps in the company's financials and the travails of the writers and actors, company executives continue to do quite well.

Zaslav's compensation as CEO topped $39 million in 2022, according to an SEC filing. That's down from 2021 when Zaslav took home nearly $246.6 million, but most of his compensation came as part of a stock-option grant worth $203 million.

Filings showed other top executives enjoyed pay increases in 2022.

Wiedenfels took home $13.5 million in 2022 versus $11.3 million in 2021. Chief Revenue and Strategy Officer Bruce Campbell made $13.7 million versus $12.6 million in 2021. And CEO and President of Global Streaming and Games JB Perrette was paid $14.1 million versus $13.4 million in 2021.