The Hollywood writers strike ended early Wednesday morning, sending shares of
Netflix
and
Walt Disney
higher.
The Writers Guild of America ended the strike at 12:01 a.m. Pacific time after reaching a pact with Alliance of Motion Picture and Television Producers. WGA members will vote on the deal between Oct. 2 and Oct. 9.
Netflix
(ticker: NFLX) shares were up 0.5% in Wednesday morning trading.
Disney
(DIS) stock edged 0.6% higher.
Paramount Global
(PARA) shares rose 2.6%.
Warner Bros. Discovery
(WBD) stock climbed 2.6%.
The WGA had announced a tentative deal with the AMPTP on Sunday. The AMPTP was representing entertainment industry power players including
Netflix,
Disney, Paramount Global, and Warner Bros. Discovery. It also represented tech firms that own studios, like
Amazon.com
(AMZN) and
Apple
(AAPL).
The deal includes increases to minimum pay rates, a new residual for streaming services based on viewership, and regulations on the use of artificial intelligence. Streaming firms will also provide the union with data on the total number of hours streamed for “self-produced high budget streaming programs,” like a Netflix original series.
The deal should unblock a number of movies and TV series which had to halt or delay production during the strike, which began on May 2. However, the deal also means a potential financial hit to the companies.
While writers can return to work while members vote, the Screen Actors Guild remains on strike. The end of one major Hollywood strike could weaken negotiating power for the actors, though negotiators will be sure to point to WGA victories on fraught topics like artificial intelligence.
Patricia Phalen, the assistant director of the George Washington University School of Media and Public Affairs, told Barron’s artificial intelligence is hitting hard for actors because the services can imitate their likenesses and their speech.
“AI is so much of an unknown, and everybody is threatened by it in some way,” she says. “I’m not sure it can all be tied up in a nice, neat little bow before we really understand what AI is capable of.”
The WGA estimated the value of the three-year deal at $233 million annually, after initially seeking a deal valued at $429 million a year. AMPTP offers as of May 1 were valued at $86 million a year, according to the guild.
Moody’s Investors Service has estimated potential new contracts agreed with labor representatives for writers, actors, and directors will ultimately cost the media firms it covers between $450 million and $600 million a year.
Write to Connor Smith at [email protected] and Adam Clark at [email protected]
Read the full article here