Paramount Global (NASDAQ:PARA) and Warner Bros Discovery Inc (NASDAQ:WBD) shares both finished higher Wednesday after the 148-day Writers Guild of America (WGA) strike officially ended at 12:01 AM Pacific Daylight Time.
The WGA and the AMPTP, which represents Hollywood's studios and streamers, reached a tentative agreement for a new three-year contract for film and television writers, ending the second-longest labor action in the guild's history that began on May 2.
Artificial Intelligence (AI) was a key issue at the bargaining table, with the new contract expected to protect writers from the encroachment of AI into their industry.
Under the new labor deal, AI cannot "be used to undermine a writer's credit or separated rights."
As well, companies must inform writers if material has been generated by AI, and if a company uses a writer's material to train AI models, the WGA is allowed to deem that training as unlawful, Entertainment Weekly reported.
Writers also cannot be forced by their employers to use AI.
The new contract also increases minimum pay rates, improves provisions for health care, expands residual payments for streaming, and ensures longer minimum periods of work for writers in development rooms and post-greenlight rooms, the media outlet noted.
Shares of Paramount Global (NASDAQ:PARA) ended up nearly 3% to $12.78 on Wednesday, while Warner Bros stock also gained almost 3% to $11.03.
Other studios such as Netflix and Disney saw their shares price ease 0.4% and 0.2%, respectively, despite opening the day higher.
Contact Sean at sean@proactiveinvestors.com