AMC Networks CFO Patrick O’Connell said the company anticipates minimal financial impact from now-resolved labor strikes in Hollywood this year.
The New York-based cable television programmer, known for shows such as “The Walking Dead” and “Better Call Saul,” was largely spared due to “a little bit of luck” — the strikes didn’t last as long as the company initially feared — as well as some planning, O’Connell said Tuesday during an investor conference hosted by Bank of America Securities.
“From an economic standpoint, you won’t see any material impact,” O’Connell said. “I wouldn’t go so far as to call it a nothing burger, but it’s as close to that as it can be financially. So, we’re set up well going into 2024.”
Earlier this month, striking Hollywood actors reached an agreement with major studios and streaming companies, ending a six-month labor dispute. Television and movie writers ended a similar Hollywood strike in September after five months of picketing. Before resolution, the strikes brought Hollywood to a halt, disrupting the production of films and television shows.
Preliminary estimates place the economic cost at more than $6 billion in lost wages and business impacts across California and other production-heavy states such as Georgia and New Mexico, according to Reuters.
Warner Bros. expects its earnings for the year to be set back by about $300 million to $500 million, according to a Securities and Exchange Commission filing in September.
At AMC Networks, the impact was minimized in part by “good planning,” according to O’Connell.
“We were in the process of reducing our volume of produced content already, so we had a lot of stuff that was going to be on the shelf,” he said.
During a recent earnings call, O’Connell said the company was cutting its full-year 2023 revenue target from $2.8 billion to $2.7 billion. He cited “softness” in content licensing revenues as well as “the continuation of a difficult advertising environment.”
However, despite such headwinds, he said the cable programmer was still expecting its 2023 adjusted operating income outlook to be in the range of $650 million to $675 million, “reflecting continued and better than previously anticipated cost discipline.” Also, he said the company was still projecting its 2023 free cash flow to be in the range of $120 million to $140 million.