Strike? What Strike? Analysts Skip WGA Questions on Warner Bros. Discovery Earnings Call

But David Zaslav did take time to root on the New York Knicks ahead of Game 3 vs. the Miami Heat.
David Zaslav, Chief Executive Officer, Warner Bros. Discovery speaks at CinemaCon 2023
David Zaslav, Chief Executive Officer, Warner Bros. Discovery speaks at CinemaCon 2023
Photo by Kevin Winter/Getty Images for CinemaCon

Warner Bros. Discovery chief David Zaslav did not address the WGA writers strike on Friday’s Q1 earnings call. He didn’t have to — nobody asked.

WBD’s first-quarter 2023 earnings came out Friday at 7 a.m. ET; the conference call kicked off an hour later. Zaslav and his CFO Gunnar Wiedenfels did not address the Writers Guild of America boycott in their prepared remarks, which spanned the first half of the hour-long call. And then in the second half, no media analysts asked them (or streaming boss JB Perrette, also on the call) about it. That probably resulted in a pretty satisfying 9 a.m. ET shrug from the company’s senior executives; they were definitely prepared for the expected query, we hear.

So why did no one step up to the plate? One equity analyst told IndieWire that institutional investors are just not that as interested in the topic as the press — at least, not yet. That’s fair. The media, especially the entertainment media (including us), cannot get enough. But the strike is not immediately material to a company with the diversity of content of WBD. By the end of summer, that may be a different story, our source said.

Zaslav did take a few moments to root on his New York Knicks in their ongoing NBA Playoffs series with the Miami Heat. He’ll be at Game 5 Wednesday at New York City’s Madison Square Garden, he said.

Not every chief executive is getting off so easy. A day earlier, Paramount Global President and CEO Bob Bakish had a brief prepared statement about the strike at the top of his earnings call; he was also asked to expand upon the topic early on in the Q&A with analysts. (Many of the same ones were on the Warner Bros. Discovery call.) There’s a key difference here between Paramount and Warner Bros. Discovery, however: WBD does not have a broadcast network, Paramount has CBS. We’re currently at the tail-end of pilot season ahead of the mid-month upfronts, when TV networks reveal their new schedules. But without writers to pen scripts ahead of summer production, broadcast-TV especially can’t really schedule anything new for fall or — or even for midseason, really.

So that explains some of the thought process of WBD analysts, who favored queries about cash, sports, and Max, among other topics. Still, even Adam Aron, chief of AMC Theatres, was asked about the writers strike on his own Friday morning earnings call. So was Cinemark CEO Sean Gamble.

The famously well-compensated Zaslav has been a topic of ire at the picket lines. WGA members wants what they believe to be a modest pay bump for underpaid film and TV writers; Zaslav, like many top executives, has no money problems to speak of. According to a March 29 proxy filing with the SEC, in 2022 Zaslav recognized nearly $247 million in total pay. Most of that came from options that needed to be accounted for due to the WarnerMedia-Discovery merger. His 2022 pay was nearly $40 million, more than half of which came from bonuses. Zaslav’s actual salary is now a bit north of $3 million.

Read Warner Bros. Discovery’s Q1 earnings here. While the numbers weren’t great, there is promise from streaming: Zaslav said he now expects the direct-to-consumer business to be profitable this year. Previous guidance pegged 2024 as the year streaming, Max (soon to be rebranded from HBO Max) and Discovery+, would first turn a profit.

The writers guild has been picketing studios since Tuesday, after the deadline passed for a new deal between the parties. At odds include a lack of streaming residuals, and the impact shorter orders — and tighter writing windows — for digital programs have had on writers’ pay.

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