Warner Bros. Discovery braced for $500m hit due to strikes

Warner Bros. Discovery (WBD) is bracing itself for a financial hit up to $500m as a result of the WGA and SAG-AFTRA strikes.

In an SEC filing published yesterday, the US media giant said that if production does not resume before the end of the year, then it expects its 2023 earnings to be somewhere between $300m and $500m lower than originally forecast.

WBD now expects its adjust earnings to be around $10.5bn to $11bn for the year and noted that the full-year financial guidance posted in August was based on the expectation that the strikes would be over by September.

“The company noted on the earnings call that if the strikes were to continue through the end of the year, it expected incremental upside to free cash flow and incremental downside to adjusted EBITDA due to the strikes’ impact on timing and performance of the remainder of the 2023 film slate, as well as the company’s ability to produce and deliver content,” said the filing from the David Zaslav-led company.

“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 filing also added that WBD is working “diligently with other industry leadership” to bring an end to the strikes, with the WGA downing tools in May, followed by SAG-AFTRA in mid-July.