Warner Bros. Discovery CEO David Zaslav 'hopeful' Hollywood strikes end soon

Alexandra Canal

Warner Bros. Discovery (WBD) CEO David Zaslav said he's "hopeful" the end is near when it comes to the ongoing double strike in Hollywood.

"At Warner Bros. Discovery, we're in the business of storytelling ... And we cannot do any of that without the entirety of the creative community," Zaslav said during the company's second quarter earnings call on Thursday.

"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 added.

Last month, actors joined writers on the picket line for the first time since 1960.

SAG-AFTRA — the union that represents approximately 160,000 actors, announcers, recording artists, and other media professionals around the world — announced the strike after failing to negotiate a deal with the Alliance of Motion Picture and Television Producers (AMPTP), which bargains on behalf of studios including Warner Bros., Disney (DIS), Netflix (NFLX), Amazon (AMZN), Apple (AAPL), and NBCUniversal (CMCSA).

The Writers Guild of America (WGA), which represents about 11,500 television and movie writers, called for a strike in early May. WGA leaders told writers late Tuesday night they will meet with studio representatives on Friday to discuss restarting negotiations.

'Very keen to figure out a solution'

Writer Julie Benson holds a picket sign with an image of the late actor and comic Paul Reubens, dressed as his character Pee-wee Herman, outside Universal Studios on Tuesday, Aug. 1, 2023, in Universal City, Calif. The actors strike comes more than two months after screenwriters began striking in their bid to get better pay and working conditions. (AP Photo/Rick Taber)

Warner Bros. Discovery said Thursday the company has seen "modest cash savings" due to the impact of both strikes, estimating those savings were in the low $100 million range during the second quarter.

After reporting free cash flow of over $1.7 billion in Q2, WBD said it expects to see "sequentially larger savings" in the third quarter as a result of the the strikes. The company guided to free cash flow of around $1.7 billion in Q3, reflecting "similar underlying trends as in Q2."

The strikes could also lead to more demand when it comes to content licensing with Zaslav telling investors on the call, "We are always looking to maximize."

HBO's "Insecure" landed on Netflix last month — highlighting the strategy Zaslav has championed when it comes to providing content to competitors. According to Deadline, "Six Feet Under," "Ballers," "Band of Brothers," and "The Pacific" will also debut on the platform as part of the licensing deal.

Still, Zaslav underscored his commitment to ending the strikes "as soon as possible" — echoing the sentiments of other media executives. He reiterated it's "critically important" that all creatives are fairly compensated in order to do their best work.

"I think all of us in this business are very keen to figure out a solution as quickly as possible," Zaslav said. "We are in some uncharted waters in terms of the world as it is today and measuring it all. [We've] all got to fight to get this resolved, and it needs to be resolved in a way that the creative community feels fairly compensated and fully valued."

Uncertainties remain the longer the strikes drag on — particularly surrounding film release schedules.

"Uncertainty in the studio segment has increased with the dual strikes," WBD CFO Gunnar Wiedenfels said on the call. "This may have implications for the timing and performance of the remainder of the film slate as well as our ability to produce and deliver content. And while we are hoping for a fast resolution, our modeling assumes a return-to-work date in early September."

Richard Greenfield, media and technology analyst at LightShed Partners, told Yahoo Finance he foresees the strikes lasting until at least November, adding the prolonged work stoppage will be "very disruptive" to the business of Hollywood in the fourth quarter.

"This is far more devastating to this industry than I think both sides realize," the analyst warned.

Last week, Sony reshuffled its 2023-2024 film schedule, citing the strikes.

"Spider-Man: Beyond the Spider-Verse" — the sequel to the widely successful "Spider-Man: Across the Spider-Verse" — was quietly removed from the 2024 release calendar. It was expected to hit theaters on March 29, 2024.

Recent reports have said studios like Warner Bros. and Disney are also weighing changes to their respective slates as a direct result of the strikes.

Variety reported Warner Bros. is "strongly considering" pushing the highly anticipated "Dune" sequel to next year from its current Nov. 3 debut. Disney is reportedly weighing the same thing for films like "Wish" and "Poor Things," according to Bloomberg.

Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at alexandra.canal@yahoofinance.com.

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