‘We don’t have a lot of time’ to save the summer movie slate – The Hollywood Reporter

In July, on the same day that SAG-AFTRA called on its members to strike against major Hollywood studios, Bob Iger made remarks at a billionaire’s resort that the actors union called “unrealistic.” More than 100 days later, the Disney chief provided an update on how the work stoppage will affect his company as talks with the performers union could move closer to reaching an agreement.

“I have the utmost respect for the actors,” Iger said in an earnings-related CNBC interview, before addressing the status of the SAG-AFTRA talks. “I can only say I’m optimistic that we’ll figure it out.” Relatively soon. In terms of impact on business, so far, it has been negligible. In the long run, that is, if the strike lasts longer, it may become of great importance. Obviously we would like to try to maintain the summer of movies, the whole industry is focused on that, we don’t have a lot of time to do that.

Disney said in its fiscal fourth quarter that it recorded a The $387 million loss for its direct-to-consumer unit (Disney+, Hulu, ESPN+) improved from a loss of $512 million last quarter. The company also added 7 million subscribers to its core Disney+ offering, bringing the total to 112.6 million subscribers now, while the platform’s average monthly revenue per user also increased slightly from $7.31 to $7.50 quarter-to-quarter.

Iger has been pressing ahead with cost-cutting and restructuring plans he has been implementing since his surprise return as CEO last November (“We are on track to achieve approximately $7.5 billion in cost reductions,” the CEO said Wednesday). But Hollywood’s most iconic company has been weathering headwinds both on the advertising side amid a broader recession and during production slowdowns due to the industry’s dual Writers Guild of America and SAG-AFTRA strikes.

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Disney’s free cash flow — a measure used to evaluate money remaining once financial obligations are met — is estimated at $4.89 billion for the full year amid the business shutdown, up from $1.05 billion for fiscal 2022. The company also lowered its content spending estimates for next year to $25 billion, Down from $27 billion in 2023.

Year-to-date, the company’s stock is down about 5 percent.

Netflix, kicking off this quarter’s Hollywood earnings season, on Oct. 18 disclosed about $1 billion in “lower-than-planned cash spending on cash content” amid the dual strikes. The streaming giant also raised its free cash flow estimate to $6.5 billion for the full year. The company’s chief financial officer, Spencer Newman, said the “swing factor” in planning content spending on film and TV projects “will be when the SAG-AFTRA strike ends” but that the goal is to reach “or near the $17 billion level” next year.

Paramount, which reported earnings on Nov. 3, incurred costs of about $60 million due to idle production last quarter amid the shutdown and generated free cash flow of $377 million. “We expect to incur additional strike-related idle costs” in the next quarter as well, Paramount CFO Naveen Chopra added on an earnings call, noting that “the amount of these additional expenses will depend on when the active strike is resolved.” The CEO also added that the company expects “strong free cash flow” in the next quarter as well as “the strike continuing to limit content production.”

Warner Bros. cited Discovery, which also revealed its earnings on Wednesday, partly influenced by stagnant global streaming subscriber strikes, fell slightly to 95.1 million, with CEO David Zaslav saying the work stoppages “forced us to delay some releases.” The notable bright spot was $111 million in streaming revenue in its direct-to-consumer division led by Max. CFO Gunnar Wiedenfels, whose motto is “cash never lies,” noted in a phone call that free cash flow rose to $2.1 billion for the quarter, a significant increase from negative $200 million in the same quarter last year. That’s partly due to “some benefits from the strikes.”

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