The actor’s strike has come to an end after 118 days with a tentative agreement between the SAG-AFTRA union and studios, sending shares of companies like The Walt Disney Company (NYSE:DIS) and Netflix Inc (NASDAQ:NFLX) higher.
The union said its negotiating committee unanimously supported the deal, valued at more than $1 billion, which increases minimum salaries, includes bonuses from streaming services and protects actors from unauthorized use of their likenesses with artificial intelligence.
The deal still needs to be ratified by union members in the coming weeks, but with the writers’ and actors’ strikes both resolved, entertainment companies can ramp up production again.
"We have arrived at a contract that will enable SAG-AFTRA members from every category to build sustainable careers," the union said in a note to members.
The news sent shares of Disney nearly 7% higher Thursday morning, Netflix stock gained 0.5%, Paramount Global (NASDAQ:PARA) added 2.4% and Warner Bros Discovery Inc (NASDAQ:WBD) increased 0.2%.
The work stoppages previously forced the delay of the release of “Dune: Part 2” because striking actors could not promote the film, and other films including the next “Mission: Impossible” and a “Snow White” remake were sidelined until 2025.
Meanwhile, Sony Group Corp (NYSE:SONY) cut its movie unit’s fiscal year operating profit guidance to 115 billion yen from 120 billion yen in its earnings release.
“Due to delays in production and constraints in promotion activities, we are seeing negative impact such as a delay in the release of certain motion pictures and a delay in the delivery of television productions,” executives said on the company’s earnings call Thursday. “We have incorporated the impact that can be assumed at the present time into our forecast for the fiscal year.”
Shares of Sony dropped more than 6%.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel