During Endeavor’s second quarter earnings call, chief financial officer Jason Lublin estimated that the ongoing SAG-AFTRA and Writers Guild of America strikes could have an average adverse impact on revenue of $25 million per month, which “largely flows through to adjusted EBITDA.”
“However, without knowing the scope, duration, and shape of the eventual recovery, especially given that the SAG-AFTRA strike is a relatively new development, having taken effect only on July 14, it would be premature to speculate the aggregate dollar impact for the balance of the calendar year,” Lublin added.
He pulled the company’s previous guidance for the year and noted that the company would provide further updates on the strikes during its third quarter earnings call. Lublin expects to update new guidance targets when the labor disputes are resolved and when the company has “greater visibility.”
“Despite the near term disruptions related to the strike, we continue to be focused on executing our strategy,” he emphasized.
Endeavor CEO Ari Emanuel pointed out that he’s been through “many strikes over my more than 35 years of representing actors, writers and creatives of all types whose livelihoods depend upon the entertainment economy.”
“Time and again, our industry has navigated change and now is no exception,” he continued. “As we adjust to new distribution models and technologies, there are real issues to work through and we continue to stand with our clients, advocate on their behalf and push for a resolution that protects their creative and commercial interests.”
Emanuel expects it to be “months, not days until the strike gets settled and things start back up.”
“When it ends, we do not know,” he continued. “It’s complicated … it’s not like any strike that’s happened in a long time. But it’s going to be months. Maybe it’s the beginning of 2024, maybe the tail end of ’23, we don’t know.”
Endeavor president and chief operating officer Mark Shapiro said that the company is just beginning to see a “ramp up in orders for non scripted,” including for shows previously passed on by the studios, which will benefit it in 2024.
“We look forward to this getting wrapped up, our clients having better economics for each one of their deals, us prospering from a return to normal business, with better economics in ’24,” Shapiro said. “So, that bodes for a strong picture.”
