Movie theater shares popped Monday following news of a tentative labor deal between the Writers Guild of America and the Alliance of Motion Picture and Television Producers.
“The world’s movie theatres can celebrate. Extremely good news that progress is being made,” AMC CEO Adam Aron said Sunday in a post on X, the site formerly known as Twitter.
Shares of AMC were up roughly 7% Monday. The notoriously volatile stock reached as high as $8.50 a share.
While a potential end to the writers’ strike represents positive momentum for Hollywood, union members still need to ratify the deal and even then, it’s still only half the battle.
The Screen Actors Guild – American Federation of Television and Radio Artists is still on strike after failure to reach a labor agreement with AMPTP.
An eventual deal between SAG-AFTRA and AMPTP is crucial for the well-being of movie theater companies going forward especially as key films such as Warner Bros. and Legendary Entertainment’s “Dune: Part Two” as well as Sony’s “Kraven the Hunter” and the sequel to “Ghostbusters: Afterlife” were pushed to 2024 because of the strikes.
Industry experts fear that more films will be forced to move along the calendar if studios cannot solidify contracts with the two guilds this year. Additionally, some films set for 2024 had filming interrupted because of the strikes and will need to restart production sooner rather than later to hit their opening dates.
Still, movie theaters have experienced solid box-office returns this year. The summer season saw a 19% year-over-year increase, due in large part to the success of “Barbie” and “Oppenheimer.”
“We would need to see movement on negotiations with SAG-AFTRA to have complete comfort over the near-term slate,” said Eric Wold, an analyst at B. Riley Securities, in a research note published Monday. “However, should the WGA agreement be ratified by its members, it would allow for writing to restart on upcoming productions to prepare for the point when actors can become involved once again.”
SAG-AFTRA released a statement congratulating the WGA for reaching a deal Sunday while also calling for the AMPTP to return to the negotiating table on its own agreements.
Despite ongoing turmoil in the media industry, the lengthy writers’ strikes have presented a unique opportunity for streaming companies such as Netflix and their libraries of content. Shares of Netflix gained roughly 1% Monday.
Disclosure: Comcast is the parent company of NBCUniversal and CNBC. NBCUniversal is a member of the AMPTP.
— CNBC’s Sarah Whitten contributed to this report.