By Samrhitha A
(Reuters) -Investors in Hollywood studios on Thursday cheered a tentative deal with actors that could help restart production of movies and shows halted by a series of strikes since spring.
Warner Bros Discovery and Paramount Global gained 3% each, Netflix rose marginally, while Walt Disney jumped 4%, as it also benefited from strong earnings and a plan to cut more costs.
The 118-day work stoppage by actors officially ended just after midnight with a three-year deal that the SAG-AFTRA union said was valued at more than $1 billion and included increases in minimum salaries and a new bonus paid by streamers.
The writers, who had gone on strike before the actors in spring, returned to work in late September, but most productions remained halted as the actors were on picket lines.
“Its certainly a very encouraging sign the chasm that opened up between actors, writers and studios can finally be closed and work begin in earnest on re-starting productions,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
The actors union’s national board will on Friday consider the agreement, which also includes protections against unauthorized use of images generated by AI, and a final ratification vote is expected in the coming weeks.
Streeter warned that “it’s going to take considerable time before new movies, in particular, will appear on screens given the lengthy post-production process.”
Warner Bros Discovery executives said on Wednesday they expected the impact from the work stoppages to extend into the last quarter of the year, after a lack of content drove a drop in streaming subscriber numbers in the third quarter.
The company, which delayed the release of “Dune: Part 2” from November to March next year, expects a hit of “a few hundred million dollars” to its core profit in the last three months of the year from the strikes.
(Reporting by Samrhitha Arunasalam in Bengaluru; Editing by Shinjini Ganguli)
