Warner Bros Discovery once said ongoing strikes saved it $100m – but now it’s done a bit of an about turn there.
Warner Bros Discovery has an investors conference happening later today, during which the company’s financials will of course come under close scrutiny. As such, WBD has elected to try and head off any particularly virulent reactions by releasing a pretty shocking statistic ahead of time so all involved can attempt to digest it.
The whopping numbers were released as part of a securities and exchanges financial filing, stating that WBD had lowered its expected earnings for the full year to between $10.5-$11 billion. That’s a drop of between $300-500m from its original expected earnings, a deficit that the company is blaming squarely on the ongoing strikes being staged by writers and actors.
The company makes that stance clear in a statement released alongside the filing, saying: “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.”
Let us not forget too, that earlier in the year Warner Bros Discovery were one of the companies that previously used an investors call to announce that the strike had saved it cash, to the tune of $100m. Add that figure into the pot and we’re looking at a possible losses of $600m, apparently all due to the strikes.
Whilst those leading the strikes will on one hand be satisfied by this announcement, a public admission that their actions are having a very real financial impact, we wonder if there might be a bit of scepticism surrounding this claim too. With the exception of Barbie's stunning success, Warners has not enjoyed a good year at the box office and thus far, little of that has had to do with the strike (although admittedly, losing its expected 2023 earnings for the delayed – into 2024 – Dune: Part II could be a significant chunk of change.
The disappointing commercial performances of The Flash, Shazam! Fury Of The Gods and to a lesser extent, Blue Beetle have as much to do with quality control, haphazard studio strategy and superhero fatigue as anything else. There’s also a growing sense that the studio might struggle to meet its financial targets for the upcoming Aquaman: The Lost Kingdom film which has suffered from a somewhat troubled production. Beyond Warner Bros’ film studio, other areas of its business such as the ailing CNN network have not performed over the last year, this has nothing to do with the Hollywood strikes.
It hasn’t been a great year for the company in most respects and whilst they have undoubtedly added to that, the strikes also present a suitable smokescreen behind which Warner Bros Discovery can attempt to hide some of its failings. We’ll see how well the company fares with this tactic when it faces investors later today.
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