Writers and actors vs Hollywood mega studios at a stalemate. When Hollywood’s biggest actors walked off the job mid-July joining the now nearly 3-month-long writers' strike, some AMPTP members’ entertainment stocks were the first to fall:
- Paramount Global (PARA, PARAA) has dropped nearly -8% since dual strike action in mid-July, and plummeted nearly -39% in one year
- Disney (DIS) fell -4%, and -15.6% down since July last year
- Comcast (CMCSA) owner of Universal Studios Oppenheimer and creator is up nearly 2% since strike action, and up nearly 2% for the year
- Netflix (NFLX) has plummeted nearly -11 % since but has soared 96% in a year
- Warner Bros. Discovery (WBD), Barbie movie-maker, has slipped nearly -4%, and is down nearly -14% since July last year
So what’s the dust up all about?
In the blue corner we have the combined forces of the WGA (Writers Guild of America) and SAG-AFTRA (Screen Actors Guild – American Federation of Television and Radio Artists), the creative engine room of Hollywood tallying more than 175,000 people, including box office stars like Matt Damon and Jessica Chastain.
In the red corner it's heavyweight AMPTP (The Alliance of Motion Picture and Television Producers), which added to the studio names above also includes Apple TV+ (AAPL), Sony (SONY - ADR) and Amazon (AMZN).
Only indie studio A24 Films - maker of Oscar darling Everything Everywhere All At Once - has agreed to SAG-AFTRA’s conditions. And those conditions? Better pay for writers and actors, royalties for their creative input, and actor safeguards against AI, meaning their faces are unable to be used by filmmakers ‘in perpetuity’.
The battle is blowing up with a bruising ripple effect. 🥊 As studios and streaming services push pause on film production, including Deadpool 3, Mission: Impossible 8, Twisters and Gladiator 2, the impacts are expensive and global:
- Big name actors draw the media to big name film festivals and the red carpet, like the Venice and Toronto Film Festivals, which are having to make tough calls about going ahead
- Hundreds of Kiwis will be out of work, including those scheduled for Jason Momoa’s Minecraft movie
- Chatshows lose their A-list talent, like Graham Norton and The Tonight Show
- Industries in post-pandemic recovery will feel the brunt - from make-up artists, caterers, vehicle rentals, accommodation, travel to other ancillary operations
- With a US summer already in billion dollar blockbuster ‘short supply’, next summer’s calendar schedule will likely be pushed out impacting cinema distributors and streaming services
Studios losing their audience?
During their earnings call last week, Netflix co-CEO Ted Sarantos played his ‘I was raised in a union household’ card, which may have fallen on deaf ears. Despite adding 6 million new subscribers following their password crackdown, the Goliath of streaming services, which boomed during lockdown, announced they missed revenue projections, leading to a post-earnings share tumble of nearly 9%. 🙉
Collateral damage if no agreement is reached. It’s been alleged that the AMPTP won’t budge on negotiations until SAG-AFTRA members ‘start losing their apartments’. And Disney CEO Bob Iger - who’s pegged to earn a potential US$27 million this year, 535 times his employees median pay - has said striker demands are ‘not realistic’.
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Meanwhile, two AMPTP member studios have united in one blockbusting weekend. Tom Cruise’s evangelising of the ‘Barbieheimer’ double-feature - urging audiences to watch both Warner Bros. Discovery’s Barbie and Comcast-owned Universal’s Oppenheimer in a 5.5 hour movie marathon - may have helped sow the seeds for what became a record-breaking US$511 million opening weekend.
But box office titans aren’t popping off. 🍿 While they may hope cinema is back for good, AMC has faced backlash for their US$65 Barbie popcorn bundle, and audiences are divided over the Oppenheimer Imax experience, which hasn’t seemed to help their stock amid strike clashes:
- Imax (IMAX) plummeted nearly -7% following double-strike news, and is down -3% since July last year
- AMC (AMCX) has hiked nearly 32% since the strike - likely helped by big box office takings - but stock has had a walloping since July 2022, down -62%
Tickled pink. 💖 Also going head-to-head, aiming for a slice of Mattel’s (MAT) billion dollar Barbie-buying frenzy, are Target (TGT) and Walmart (WMT). Target has gone all in on Barbie Land, and Walmart’s engaged the OG fashion influencer on TikTok.
