Hollywood’s summer plans have been disrupted by the joint strike of WGA and SAG-AFTRA, causing a slowdown at the box office, which is already recovering from the impact of the COVID-19 pandemic. The strike has led actors to leave productions and participate in strike lines, resulting in a lack of promotions for films.
Are the Strikes Causing Movie Studios Stocks to Suffer?
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Hollywood’s summer plans have been disrupted by the joint strike of WGA and SAG-AFTRA, causing a slowdown at the box office, which is already recovering from the impact of the COVID-19 pandemic. The strike has led actors to leave productions and participate in strike lines, resulting in a lack of promotions for films.
As a result, late-night spots, red carpet events, and other promotional activities have been put on hold, creating a unique situation with a double strike, an occurrence not witnessed in over 60 years.
The WGA initiated the strike on May 1, and with SAG-AFTRA joining forces, they aim to increase pressure on the AMPTP to negotiate a fair deal. To bring an end to the strike, many believe that the studios must face significant financial repercussions, prompting Wall Street to express their concerns, which could encourage the studios to return to the negotiation table, where the actors and writers have been waiting.
As of now, the question arises: where do the movie studio stocks currently stand?
Are Movie Studio’s Stocks Suffering During the Strikes?
According to a report by the Los Angeles Times, the ongoing writers’ strike has significantly affected the stocks of traditional studios. Disney’s stock has dropped 13 percent since the strike began in May, reaching $88.62 a share. Paramount has experienced a more substantial decline, with its stock falling over 30 percent to $15.96 a share. Warner Bros. Discovery’s stock has also declined by nearly 7 percent, standing at $12.40 a share. Additionally, shares of WBD, which owns HBO and CNN, have plummeted nearly 50 percent since April 2022 when Discovery merged with WarnerMedia and took on a massive $45 billion debt.
This situation appears to work in favor of the Writers Guild of America (WGA) and SAG-AFTRA, who view these stock hits as indicators that the studios are facing difficulties and may not be able to hold out for long.
However, it’s important to note that the Alliance of Motion Picture and Television Producers (AMPTP) represents not only traditional studios but also streaming platforms. The largest streaming platform, Netflix, has seen a considerable boost in its stock price, rising 36 percent to $441.91 since the writers’ strike started. Netflix now holds a higher market value, around $200 billion, compared to Disney’s value of $162 billion, making it the world’s most valuable entertainment company.
This situation highlights the instability and unprecedented nature of the current times, especially with streamers gaining significant influence in Hollywood. There might be tension within the AMPTP, and the current state of affairs could even lead to a possible breakup as traditional studios face challenges.
However, it is unlikely that traditional studios will easily concede to the demands of talent, as they are already investing heavily in launching their streaming channels. They may be hesitant to incur further losses by agreeing to a fair deal with the writers and actors.
As a result of the strike, broadcast networks are expected to suffer in the fall, and there could be repercussions when there are no new movies to release in the spring or actors available to promote fall releases.
In these unprecedented circumstances, everyone involved is learning in real time about their limits and what their companies can do to survive.
For filmmakers trying to initiate projects during this time, focusing on independent financing outside of traditional studios may be a more viable approach. SAG-AFTRA is willing to collaborate with wholly independent productions, and this could be an opportune moment to work on small passion projects, especially when bigger names may be available and willing to participate in sticking it to the studios.
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