- Warner Bros. Discovery CEO David Zaslav said the writers and actors strikes need to end as the media industry is in a transitional moment.
- Earlier this week, Warner Bros. Discovery revised its full-year guidance, and expects earnings to take a hit of up to $500 million assuming the strikes last through year-end.
- Zaslav spoke Wednesday at Goldman Sachs’ Communacopia and Technology conference.
The media industry is in a transitional moment — from streaming to traditional TV — and the focus needs to be on ending the writers and actors strikes, Warner Bros. Discovery CEO David Zaslav said on Wednesday.
“We’re a content company. We’re a storytelling company. And we need to do everything we can to get people back to work,” Zaslav said at Goldman Sachs’ Communacopia and Technology conference. “People need to be fairly compensated.”
“We really have to focus as an industry, and we are, on trying to get this resolved in a way that’s really fair.”
The comments came a day after Warner Bros. Discovery alerted investors that it has revised its full-year outlook, factoring in the impact of the actors and writers strikes if they were to continue through year-end. Initially, the company’s guidance was based on the assumption the strikes would be over in September.
The company now expects its adjusted earnings before interest, taxes, depreciation and amortization will take a hit of $300 million to $500 million, putting it in the full-year range of $10.5 billion to $11 billion.
Zaslav has been part of the discussions with the Members of the Writers Guild of America union, which has been on strike for more than 100 days, as well as being in talks with the actors’ union, which started its strike in July.
The work stoppages have halted production on Hollywood sets, affecting companies like Warner Bros. Discovery, which owns a TV and movie studio, as well as the biggest portfolio of pay TV networks.
On Wednesday, Zaslav spoke about the various issues facing the industry as a whole — from the strikes to theaters still feeling the effects of the pandemic, to the tough advertising market and to bulking up the streaming business.
The company has been focused on increasing its free cash flow and paying down its debt, much of which stems from the 2022 merger of WarnerMedia and Discovery. The impact of the strikes isn’t expected to affect its debt paydown and net leverage target for the year.
Warner ended the second quarter with $47.8 billion in debt. In recent months, the company has done two tender offers, both vehicles for paying down its debt.
On Wednesday, Zaslav said that effort remains the focus of the company as it has made decisions to cut back on costs, adding there are no plans to “jeopardize” the health of the company for any one piece of content.
Warner Bros. Discovery recently started discussions with the NBA regarding the upcoming rights renewal, he said Wednesday.
Still, like its peers, Warner Bros. Discovery has been looking for ways to bulk up its streaming business. Max, its flagship streaming service, was relaunched earlier this year.
Zaslav said the company would have updates in coming weeks on adding sports to Max. CNBC previously reported the company is targeting the beginning of MLB playoffs to debut a sports tier on Max.
This month Max is adding more content from both Warner Bros. Discovery’s portfolio and other media companies. It also added more than 200 episodes of series from AMC Networks, which will be available in a designated hub — free to Max subscribers — for the next two months.
Later this month, CNN will join the Max platform as a 24/7 live news hub featuring top anchors from the network.
Source: Business - cnbc.com
