Big Media Stocks Backtrack In Jittery Market; Theater Chains Soar On Tentative WGA Deal
25.09.2023 - 18:51
/ deadline.com
Big media shares, which rose in pre-market trading Monday, opened lower at the bell and are still trending down midday after the Writers Guild reached a tentative deal with studios to end their prolonged strike. Renewed market jitters over inflation, interest rates and a potential government shutdown appeared to have offset relief that Hollywood is back in business – or much closer to it.
On the other hand, Netflix is up. And exhibitors, which can avoid clear and present danger if Hollywood strikes end, are seeing strong gains across the board.
As it pertains to big media groups, Wall Street has been mixed on the dual strikes by actors and writers. Shuttered production led to significantly lower costs at companies in dire need of cash to pay down debt given ongoing losses in streaming. CEOs have had two sets of earnings calls with little pushback from investors last spring, and a bit more concern in August with the fall television season upended and movie release dates starting to shift. Warner Bros Discovery said in August it anticipated a hit to earnings of up to $500 million from the strike, accompanied by a wave of free cash flow.
The WGA announced late Sunday that it had reached a tentative agreement with the AMPTP on all deal points subject to final deal language. Details of the new deal aren’t public yet so the potential impact to corporate financials isn’t clear. WGA leadership called the deal “exceptional — with meaningful gains and protections for writers in every sector of the membership.”
The SAG-AFTRA strike is still ongoing, but a WGA deal is expected to segue into a settlement with actors.
In a note to this morning titled ‘Light At The End Of The Strike Tunnel,’ TD Cowen media analyst Doug Creutz said he
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