Hollywood studios’ investors celebrated Thursday following the announcement of a provisional deal with actors, signaling a potential resurgence in movie and television production that had been hampered by a series of strikes since spring. Shares of Warner Bros Discovery and Paramount Global saw a 3% surge each, with Netflix experiencing a modest uptick, and Walt Disney gaining an impressive 4%. The latter also reaped the benefits of robust earnings and an efficient cost-cutting initiative.
The 118-day work stoppage initiated by actors officially concluded just after midnight, with the SAG-AFTRA union unveiling a three-year pact valued at over $1 billion. The accord encompasses augmented minimum salaries and an innovative bonus structure for streamers. Preceding the actors’ strike, the writers’ union had embarked on their own work stoppage in the spring, resuming duties in late September. Nonetheless, numerous productions remained at a standstill due to actors’ presence on picket lines.
Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, lauded the development as “a very encouraging sign that the rift between actors, writers, and studios can finally be bridged, allowing earnest efforts to recommence productions.”
On Friday, the actors’ union’s national board is set to deliberate on the agreement, which also establishes safeguards against unauthorized utilization of AI-generated images. A final ratification vote is slated for the ensuing weeks. Despite the positive turn of events, Streeter cautioned, “it’s going to take considerable time before new movies, in particular, will appear on screens given the lengthy post-production process.”
Warner Bros Discovery executives disclosed on Wednesday that the ramifications of the work stoppages are anticipated to extend into the final quarter of the year. A dearth of content resulted in a dip in streaming subscriber numbers in the third quarter. The company, which postponed the release of “Dune: Part 2” from November to March 2021, foresees a core profit setback of “a few hundred million dollars” in the last three months of the year due to the strikes.
The deal of Hollywood studios with actors marks a pivotal turning point, heralding a new era of collaboration and productivity in the entertainment industry.
Source: Reuters
