In a regulatory filing earlier today, Warner Bros. Discovery announced that it has lowered its 2023 adjusted earnings forecast to $10.5 billion-$11.0 billion, which means the studio will take a hit of between $300 million and $500 million.
This is said to be “predominantly due to the impact of the strikes,” but it really has been a year of ups and downs (more downs) for the studio.
While Greta Gerwig's Barbie performed exceptionally well (it's actually become Warner Bros.' highest-grossing movie of all time worldwide), DC Comics-based films Shazam! Fury of The Gods, The Flash, and Blue Beetle - which David Zaslav and co. had to be counting on to generate more revenue - underperformed, with the Scarlet Speedster's solo debut, in particular, emerging as one of the biggest flops in comic book movie history.
WBD previously predicted an end to the strikes in "early September," but with negotiations recently hitting a wall, no date has been set for the parties involved to return to the table.
“Uncertainty in the studio segment has increased with the dual strikes,” studio CFO Gunnar Wiedenfels said at the time. “This may have implications for the timing and performance of the remainder of the film slate as well as our ability to produce and deliver content. And while we are hoping for a fast resolution, our modeling assumes a return-to-work date in early September. Should the strikes run through the end of the year, I would expect several hundred million dollars of incremental upside to our free cash flow guidance and some incremental downside for adjusted EBITDA.”
In Tuesday's filing update, Wiedenfels was a lot less optimistic.
“While WBD is hopeful that these strikes will be resolved soon, it cannot predict when the strikes will ultimately end. With both guilds still on strike today, the company now assumes the financial impact to WBD of these strikes will persist through the end of 2023.”
The Hollywood strikes have already resulted in several big and small-screen projects being delayed, including WB and Denis Villeneuve's Dune: Part 2, which was recently pushed back to 2024.
As far as (potential) blockbusters go for the remainder of the year, Aquaman and the Lost Kingdom is still set to arrive in theatres this December, but given the box office performance of other recent DC movies, we're not sure how confident the studio is in James Wan's sequel (we haven't seen so much as an official still or poster, let alone a teaser trailer).