The financial impact of ongoing actors and writers strikes as a number on it now as Warner Bros. Discovery said today it’s looking at a hit of $300 million to $500 million in adjusted EBTITDA (earnings before interest, taxes, depreciation and amortization) for 2023.
In a filing this morning with the Securities and Exchange Commission, WBD said “it is expecting lower adjusted EBITDA for the full year in the range of $10.5 to $11 billion, reflecting the company’s assumption that adjusted EBITDA will be negatively impacted by approximately $300 to $500 million, predominantly due to the impact of the strikes.”
Free cash flow goes the other direction. The company raised its free cash flow expectations for the full year to at least $5 billion. It expects to exceed $1.7 billion in free cash flow for the third quarter of 2023, in part due to the strong performance of Barbie as well as incremental impact from strike-related factors.
The company led by CEO David Zaslav said in the SEC filing it will continue to update its assumptions “based on the timing and any additional impacts of the eventual resolution of the strikes.”
“WBD continues to prioritize and work diligently with other industry leadership to resolve the current WGA and SAG-AFTRA strikes in a manner that is fair and values the important work of, and partnership with, the writers and actors,” the filing said.
Zaslav will be speaking at a Goldman Sachs media conference tomorrow.
WBD execs indicated on a qarterly earnings call in August that their full-year financial guidance numbers assumed the strikes would be resolved by early September. With no resolution in sight, it is revisiting that guidance now.
“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. 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.”
More to come…
