Shares of The Walt Disney Company (NYSE: DIS), Paramount Global (NASDAQ: PARA), and Netflix, Inc. (NASDAQ: NFLX) surged in pre-market trading on Monday following a new tentative agreement reached between the Hollywood screenwriters and top studios. This move will resolve one of two industry’s major walkouts that had halted film and TV production.
The Writers Guild of America, representing over 11,500 Hollywood screenwriters, announced on Sunday that it has successfully brokered a deal with the Alliance of Motion Picture & Television Producers, the collective bargaining group for the studios. This deal, subject to approval by guild members, will end a strike commenced on May 2, 2023.
The provisional three-year agreement awaits the completion of contract language and recommendations from the union’s council and board. These recommendations could be provided as early as Tuesday, with member voting set to follow. The strike will continue until the approval process is completed.
The guild expressed satisfaction with the deal, calling it “exceptional” with meaningful benefits and protections for all members.
This strike, the first since 2007 for writers, was initiated to secure higher compensation from streaming services that have revolutionized the television industry and fundamentally reshaped talent compensation. The Screen Actors Guild joined their cause in July, echoing similar concerns.
According to Bloomberg, the detailed terms of the agreement will be unveiled soon. However, it has been confirmed that writers have secured favorable concessions on crucial aspects, including higher wages.
Moreover, the studios have committed to hiring a specific number of writers for each season of their TV shows, with the number increasing proportionally to the number of episodes. Both sides have also crafted a framework wherein writers will be eligible for bonuses tied to the popularity of shows on streaming platforms.
In addition, the parties appear to have also reached an agreement on AI usage, a concern that writers feared would lead to job displacement.
The strikes had a widespread impact, causing the suspension of production for hundreds of films and TV shows. This not only affected writers and actors but also had ripple effects on directors, crew members, and ancillary industries like catering and real estate. In response to dwindling revenues, talent agencies resorted to layoffs, while studios cut deals with major producers to reduce costs. Awards shows faced delays, and film festivals proceeded without A-list stars. The walkout has caused delays in the return of new shows for the fall TV season, with many films slated for release this year pushed back to 2024.
As news of the strike resolution spread, shares of top studios surged in pre-market trading on Monday. Paramount Global (NASDAQ: PARA) gained 3.48%, Netflix, Inc. (NASDAQ: NFLX) rose by 0.97%, and The Walt Disney Company (NYSE: DIS) saw an increase of 0.80%.