The entertainment industry is abuzz with optimism as a tentative deal between actors and studios has breathed new life into the production of movies and television shows. Following a series of debilitating strikes that had persisted since spring, investors in Hollywood studios celebrated on Thursday, causing shares of major companies to soar. The Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) officially declared the 118-day work stoppage over, unveiling a lucrative three-year deal valued at over $1 billion.
Investors were swift to respond to the news, driving shares of Warner Bros Discovery and Paramount Global up by 3%, while Netflix witnessed a modest increase and Walt Disney enjoyed a substantial 4% boost. Walt Disney, in particular, had additional reasons to celebrate, as the company reported robust earnings and introduced an ambitious cost-cutting plan, further enhancing investor confidence.
The newfound agreement between actors and studios encompasses substantial revisions to minimum salaries and the introduction of a new bonus structure for streaming platforms. This development marks a significant turnaround following the writers’ union strike earlier in the spring, which had concluded at the end of September. Despite the writers’ return to work, the actors’ picket lines continued to obstruct many productions, exacerbating the industry’s woes.
Commenting on the agreement, Susannah Streeter, Head of Money and Markets at Hargreaves Lansdown, emphasized the significance of this breakthrough. She stated, “It’s certainly a very encouraging sign that the chasm that opened up between actors, writers, and studios can finally be closed, and work can begin in earnest on re-starting productions.” Streeter’s words resonated with many industry insiders who have been yearning for the resumption of normalcy.
The national board of the actors union is scheduled to convene on Friday to deliberate on the agreement, which also includes provisions aimed at safeguarding against unauthorized use of AI-generated images. A final ratification vote will be conducted in the weeks to come, solidifying the agreement’s status.
Despite the palpable optimism, Streeter also cautioned that a substantial amount of time would be needed before new movies, in particular, grace the silver screen. The intricate post-production process, which includes editing, special effects, and sound design, typically requires a significant duration. In the interim, studios will have to adjust their schedules and coordinate efforts to get back on track.
For Warner Bros Discovery, the challenges posed by the strikes are far from over. Company executives admitted on Wednesday that the fallout from the work stoppages might extend into the final quarter of the year. The impact was already evident in the third quarter, where a scarcity of new content contributed to a decline in streaming subscriber numbers. Warner Bros Discovery further disclosed that the delay of “Dune: Part 2” from November to March 2023 will result in a financial hit of “a few hundred million dollars” to their core profit during the last three months of the year.
With this historic deal, actors and studios have laid the foundation for a revitalized era of seamless and productive production in Hollywood.
Source: Reuters
