Warner Bros. CEO says: Discovery The writers’ and actors’ strikes must end

CEO of Warner Bros. Discovery David Zaslav.

Olivia Michael | CNBC

David Zaslav, CEO of Warner Bros. Discovery, on Wednesday, said the media industry is in a transitional moment — from broadcast to traditional television — and the focus should be on ending writers’ and actors’ strikes.

“We are a content company. We are a storytelling company. And we have to do everything we can to get people back to work,” Zaslav said at Goldman Sachs’ Communications and Technology conference. “People need fair compensation.”

“We really have to focus as an industry, and we’re trying to solve this problem in a really fair way.”

These comments came one day after Warner Bros. was alerted. Discovery told investors that it has revised its outlook for the full year, taking into account the impact of the writers’ and actors’ strikes if they continue through the end of the year. Initially, the company’s guidance was based on the assumption that the strikes would end in September.

The company now expects adjusted EBITDA to be $300 million to $500 million, which puts it in the full-year range of $10.5 billion to $11 billion.

Zaslav was part of discussions with members of the Writers Guild of America, which has been on strike for more than 100 days, as well as talks with the Actors Guild, which began its strike in July.

The work stoppage has halted production on Hollywood sets, affecting companies such as Warner Bros. Discovery, which owns a television and movie studio, as well as the largest group of pay-TV networks.

On Wednesday, Zaslav spoke about the various issues facing the industry as a whole — from strikes to theaters still feeling the effects of the pandemic, to a tough advertising market and increasing streaming business.

The company has focused on increasing its free cash flow and paying down its debt, much of which stems from the merger of WarnerMedia and Discovery in 2022. The impact of the strikes is not expected to affect its debt payment and net leverage target for the year.

Warner finished the second quarter with $47.8 billion in debt. In recent months, the company has submitted two tender offers, both ways to pay off its debts.

On Wednesday, Zaslav said the efforts remain a focus of the company as it has made decisions to cut costs, adding that there are no plans to “endanger the company’s health” for any piece of content.

He said on Wednesday that Warner Bros. Discovery recently began discussions with the NBA regarding an upcoming rights renewal.

However, like its peers, Warner Bros. Discovery is looking for ways to increase the size of its live streaming business. The streaming service, Max, was relaunched earlier this year.

Zaslav said the company will have updates in the coming weeks on adding sport to the Max. CNBC previously reported that the company is targeting the start of the MLB playoffs to launch a sports level on the Max.

This month, Max is adding more content from the Warner Bros. portfolio. Discovery and other media companies. It also added more than 200 episodes of the series from AMC Networks, which will be available in a dedicated hub — free to Max subscribers — for the next two months.

Later this month, CNN will join Max as a 24/7 live news hub featuring the network’s top anchors.