Updated Sep 5, 2023 - Economy

Warner Bros. Discovery expects earnings hit as Hollywood strikes bite

Rebecca Falconer

Members of the Writers Guild of America and the Screen Actors Guild walk a picket line outside of Warner Bros Studio in Burbank, California, on July 26. Photo: Valerie Macon/AFP via Getty Images

Warner Bros. Discovery expects an earnings hit of $300 million to $500 million "predominantly due to the impact" of Hollywood's ongoing writers and actors strikes, the company said in a securities filing Tuesday.

Details: It now predicts earnings before interest, taxes, depreciation and amortization for 2023 in the range of $10.5 to $11 billion, with free cash flow for the third quarter expected to exceed $1.7 billion, "in part due to the strong performance" of blockbuster movie "Barbie" — the highest-grossing Warner Bros. film ever, per the filing.

"[I]ncremental impact from strike-related factors" also contributed to this, according to the filing.

The big picture: The strikes by members of SAG-AFTRA, the union that represents Hollywood actors, and the Writers Guild of America as they seek new deals with major studios hit the U.S. labor market last month.

It's also impacted states and local businesses, which have suffered billions of dollars worth of losses due to production halts, and public relations professionals.

Go deeper: Top Hollywood executives shift strike messaging strategy

Editor's note: This article has been updated with more details from the filing and further context.

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Warner Bros. Discovery expects earnings hit as Hollywood strikes bite

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