Late-night shows are set to resume production as the writers of the Guild receive the greenlight to return to work in the coming days or weeks. Amid the ongoing Hollywood strike, The Drew Barrymore Show is eyeing a return to the airwaves in October. Initially, there was backlash when Barrymore announced a mid-September comeback, but she later reversed the decision. Late-night programs like Saturday Night Live and The Tonight Show with Jimmy Fallon have yet to comment on when they will air fresh episodes.
However, the resumption of scripted series filming will rely on the SAG-AFTRA actors union reaching an agreement with studios. The actors initiated the strike in July, demanding higher wages and restrictions on the use of artificial intelligence on screen. Once the actors strike is resolved, film and television producer Todd Garner anticipates a rush of productions restarting simultaneously.
Garner aptly compared the situation to the logjam of cargo ships waiting in Long Beach during the pandemic. He estimated that there are currently around 250 projects waiting to resume. Major television shows and movies hold priority contracts with actors, meaning that unfinished projects like Garner’s own film, Mortal Kombat 2, must be completed before other productions can commence.
The financial implications of the strike have been a concern for investors in media companies. Initially, the strikes boosted cash flows due to reduced spending. However, they have now started to impact earnings, causing shares of big media companies to give up early gains. Warner Bros. Discovery closed down nearly 4%, Comcast fell almost 1%, and Walt Disney dropped 0.3%.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, believes that once the deal with writers is reached, the studios and streaming services will focus on actors’ demands. However, she warns that the big studios may face a significant hit in 12-18 months due to a lack of new content. Meanwhile, Netflix has remained relatively unaffected, with operations and staff outside of the U.S. that are not impacted by the strike.
Due to project delays resulting from disruptions, Warner Bros. Discovery has warned of an expected hit of up to $500 million on its full-year adjusted core profit. The writers’ strike, which began on May 2, has caused shares of Warner Bros. Discovery, Paramount, Disney, and Netflix to decline. The S&P 500 index, in contrast, has seen a nearly 5% rise. Rosenblatt analyst Barton Crockett predicts that the total spending on shows will remain relatively unchanged, with studios either reducing spending on other elements of production or producing fewer new shows to cover increased writer costs.
In conclusion, while late-night shows are preparing to return as writers are given the go-ahead, the resumption of scripted series filming relies on resolving the actors strike. Media companies face financial uncertainty, with concerns about earnings and a potential lack of new content impacting shares. Netflix is better positioned than its competitors due to its international operations. The situation remains fluid, with negotiations ongoing and implications for the industry’s future.
