Big media shares shed gains as focus shifts to actors' strike
By Yuvraj Malik and Zaheer Kachwala
(Reuters) -Big media companies gave up early share gains from hopes of an end to screenwriters' strike on Monday as focus shifted to an ongoing strike by actors, whose resolution is crucial for a full return to work in Hollywood.
Warner Bros Discovery (NASDAQ:WBD), Paramount Global, Walt Disney (NYSE:DIS) were down 0.3% to 2.1% in choppy trading, after rising as much as 4% before the markets opened.
The union representing roughly 11,500 film and television writers entered a tentative three-year deal on Sunday, which now needs an approval from the guild leadership and union members.
But a strike by a larger guild of actors is still on.
Nearly 160,000 film and television actors, stunt performers and other media professionals walked off the job in July, demanding higher wages and protection against artificial intelligence use.
Investors of the media companies have been concerned about the financial fallout of the strikes that had initially boosted cash flows due to lower spending, but has now started eating into earnings.
The deal with writers «will also mean the studios and streaming services will now focus fully on actors' demands,» said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
«Already it's likely that the big studios will face a significant hit in 12-18 months time, with so little in the pipeline and bosses are now desperate for new content to attract eyes to big and small screens.»
WBD, whose CEO David Zaslav played a key role in contract negotiations with the writers, had earlier warned that the company's full-year adjusted core profit would take a hit of up to $500 million due to projects delays from disruptions.
Its shares have dropped nearly 14%
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