SAG-AFTRA members and supporters sing outside Paramount Studios on day 118 of their strike against the Hollywood studios on November 8, 2023 in Los Angeles, California.
Mario Tama | Getty Images
Before the actors’ union reached a labor agreement with studios on Wednesday evening, Disney CEO Bob Iger told CNBC’s Julia Boorstin that the strike’s impact on the company had “been negligible” so far.
He also said that sooner or later a resolution would help preserve next year’s box office calendar – so the tentative agreement does just that.
But media and entertainment companies are feeling different impacts.
Due to the actors’ strike, Sony has cut its film division’s fiscal year operating profit forecast from 120 billion yen to 115 billion yen.
“Due to production delays and limitations in promotional activities, we are seeing negative impacts, such as a delay in the release of certain films and a delay in the delivery of television productions,” Sony executives said during the earnings call Thursday morning. “We have included the impact we can currently assume in our forecast for the fiscal year.”
In July, with Hollywood actors and writers both on strike, Sony postponed the release of Marvel Studios collaboration “Kraven the Hunter” until next year and postponed the next “Spider-Verse” movie, both potential blockbusters.
Sony executives also warned of potential ripple effects from the labor stoppages.
“Even after the strike ends, it will take some time for business activities to normalize due to the concentration of productions and cinema releases, so we expect this to have a negative impact on next fiscal year’s results,” they said. “However, we plan to take cost control and other measures to reduce the impact.”
Before the deal was announced Wednesday evening, AMC Entertainment Earlier in the day, the two sides pleaded to make a deal.
Members of the Writers Guild of America (WGA) and the Screen Actors Guild walk the picket line outside Fox Studios on August 9, 2023 in Los Angeles, California. Film and TV production came to a standstill 100 days ago when writers took their pens, which were only added to the picket lines by actors in mid-July.
Alexi Rosenfeld | Getty Images Entertainment | Getty Images
“There has been and will continue to be significant collateral damage as a result of these extended work stoppages,” the company said, reporting figures after the bell. AMC shares fell more than 10% Thursday morning after the earnings report and the company announced its plan to sell more shares in a secondary offering.
“The short-term effects of the writers’ and actors’ strikes will create additional and unnecessary challenges for AMC in 2024,” said CEO Adam Aron.
For the fourth quarter, however, the saving graces for AMC could be Taylor Swift and Beyoncé. Swift’s concert film has made big returns, while Beyoncé’s will be released in December.
“Because of the writers’ and actors’ strikes, there were some films that were going to disappear from the fourth quarter. So there were some gaps in the calendar in the fourth quarter,” Aron said on a call with analysts. “It was nice for movie theater operators who added the unexpected gift of a Taylor Swift concert film and a Beyoncé Knowles-Carter concert film to the fourth quarter calendar, only literally adding a month or two advance to the quarter starting.”
Then there is Warner Bros. Discoverywhose shares plunged on Wednesday after the media giant reported profits.
CFO Gunnar Wiedenfels said on the earnings call that the Hollywood strikes were dragging down studios’ performance, especially on the TV front. He noted that the strikes “hurt the production and delivery of TV content as TV revenues fell significantly, offsetting the strong performance of films and games.”
He also warned that there is “a real risk at this point that a negative financial impact from the strike will continue to some extent into 2024.”
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is a member of the Alliance of Motion Picture and Television Producers.