Netflix‘s co-CEO Ted Sarandos assured the company’s investors that studios are “totally committed” to ending the ongoing SAG-AFTRA strike. The assurance came Wednesday during Netflix’s third quarter earnings call.
“We want nothing more than to resolve this and for everyone to get back to work,” Sarandos said. “That’s true of every member of the AMPTP.”
“We are incredibly and totally committed to ending the strike. The industry, our communities and the economy are all hurting. So we need to get a deal done that respects all sides as soon as we possibly can,” Sarandos added.
The streaming head also expanded on why negotiations with the guild broke down, an explanation he gave earlier this month during Bloomberg’s Screentime conference. According to the streaming executive, studios spent “hours and hours” with SAG-AFTRA and were “very optimistic” they were making progress. However, the per subscriber levy that the guild proposed “broke our momentum, unfortunately.”
Last Wednesday, the AMPTP walked away from the bargaining table. “After meaningful conversations, it is clear that the gap between the AMPTP and SAG-AFTRA is too great, and conversations are no longer moving us in a productive direction,” the AMPTP said at the time.
In a statement to its members and posted to social media, SAG-AFTRA accused the studios of using “bully tactics.” The guild also accused the AMPTP of “intentionally” misrepresenting the guild’s proposal, overestimating their cost by 160%.
The strike was also referenced in Netflix’s official third quarter earnings report. “The last six months have been challenging for our industry given the combined writers and actors strikes in the U.S.,” the company wrote. “While we have reached an agreement with the WGA, negotiations with SAG-AFTRA are ongoing. We’re committed to resolving the remaining issues as quickly as possible so everyone can return to work making movies and TV shows that audiences will love.”
The impact of the SAG-AFTRA strike and the recently concluded WGA strike also appeared in Netflix’s financials. The free cash flow estimate for fiscal year 2023 was reported to be $6.5 billion (give or take a few hundred million), a jump from the company’s previous free cash flow forecast of $5 billion. For reference, free cash flow was $1.6 billion in 2022.
Around $1 billion in this year’s lower cash spend was credited to the strikes. Overall, the cash content spend for 2023 is expected to be around $13 billion, and, assuming the SAG-AFTRA strike will be resolved soon, the cash content spend is expected to be around $17 billion in 2024.
Altogether, Netflix’s stock jumped 12% in its third quarter of 2023, and the company added 9 million subscribers globally. The company also reported diluted earnings of $3.73 per share on revenue of $8.5 billion.
