Paramount Global CEO Bob Bakish outlined the studio’s plans to get through the Writers Guild of America Strike during the company’s earnings call Thursday, saying Paramount had been preparing for this possibility, including a series of new releases and moving the production abroad, to get through It.
“Writers are an essential part of creating content that our audience likes, really across platforms. And we hope that we can come up with a solution that works for everyone pretty soon. But it’s also fair to say there’s a pretty big gap today,” Bakish said in response to an analyst’s question. “So it’s clear we’ve been planning for this. We have a lot of levers to pull and that allows us to get through this attack, even if it is for a longer duration. In terms of those levers, we have a lot of substance in the can, so to speak. So, with the exception of things like late at night, the consumer really doesn’t notice for a while.’
“Add to that a wide range of reality and unscripted, where we are definitely a leader, as well as sport and that’s not affected. And so what we can do more in those areas if we need to, and again, we’re in a leadership position overall. In addition, we have offshore production, which we’ve moved to leverage pre-strike,” he said, adding that Paramount also has “one of the largest media libraries.”
As for the financial impact, Bakish said it will depend on the duration of the strike. However, he expects it will likely be “slightly dilutive” to sales, remain equal to operating income before depreciation and amortization, and add to cash.
Bakish’s comments echo previous statements by others, including Netflix CEO Ted Sarandos, who had said that Netflix could weather a writers’ strike better than others because of its large library of content. David Zaslav, CEO of Warner Bros. Discovery, had made similar comments about its streamers’ library.
WGA members this week picked outside Paramount’s LA headquarters, as well as numerous other studios, including Amazon, Netflix, and Warner Bros. Discovery.
The upcoming content list for Paramount includes the release of four franchise films in the coming months, Bakish said, including Transformers: Rise of the Beasts in June, Tom Cruise’s Mission: Impossible – Dead Reckoning part one in JulyTeenage Mutant Ninja Turtles: Mutant Mayhem in August and PAW Patrol: The Mighty Movie in September. These will eventually make their way to the streaming side.
In terms of television, Paramount plans to release Taylor Sheridan’s next show, Special Ops: Lioness, with Zoe Saldana, Morgan Freeman and Nicole Kidman this summer.
Paramount grew its streaming subscribers to 60 million on Paramount+ in the first quarter, while streaming losses and investments also grew. While Bakish reaffirmed that “content is king” even during a writers’ strike, Bakish said the company expects second-quarter subscriber additions to be “a little softer” due to seasonality, but that subscriber growth in the second half of the year should resume, thanks to the combination of Paramount+ and Showtime.
In a report Thursday, Moody’s analyst Neil Begley said he expects a new deal with the Writers Guild to cost media companies $250 million to $350 million a year. But given the upcoming negotiations with other unions, including the Directors Guild of America, the American Federation of Television and Radio Artists and the Screen Actors Guild, Begley expects total annual costs to rise to $450 million to $600 million a year.
