Michael Eisner, the former CEO of Disney and host of CNBC's "Conversations with Michael Eisner" revealed on Fast Money that the writers strike is effectively over and that a deal should be announced this week-end. Here's what was said.
Where do we stand on the WGA strike?
“It’s over,” says Eisner.
“They’ve made a deal, they shook hands on a deal,” he replies. "The deal is going on Saturday to the constituents (for a vote)… I think it’s impossible that they turn it down. A deal has been made and (the writers) will be back to work reasonably soon!”
That seems like pretty big news. As far as you’re saying the strike is over?
“Yeah, I know the deal’s been made and I know the strike is over.”
He adds, “I have some friends in certain places and I believe there was a handshake last Friday… it’s possible they (the writers) will turn it down but it would be insane if they turned it down.”
What are the implications of the deal as you understand it?
“Most of the companies that own the content are very large," says Eisner. “Yes, most of them might have a teeny write-downs… and some of the syndication values could be delayed but I don’t think it’s a big deal. I don’t think it will hurt Time Warner or Disney or News Corp or Viacom. It’s not of no consequence but I don’t think it’s earth shattering.
A lot of writers had their deals torn up when they went on strike. What now?
“I think a lot of writers lost their deals and they won’t be reinstated," Eisner replies. "One of the reasons these media companies don’t have economic problems is that they cut back on these big (writer) deals….Of course the talented writers will get new deals but in the short term I think the strike was a mistake (because) it was fairly ill-timed," he says. "If there was going to be a strike I think it should have been 3 years from now when (the writers) really understood the definition of the online business and where the revenues are coming from."
What do you make of the recent strength in media earnings?
“Most investors know that media companies are resistant to slowdowns,” Eisner replies. “I think a recession has already been built into the media stocks and most of them are undervalued right now.”
“If you look at media companies, these brands sustain themselves,” he says. “You really can’t say the sky is falling unless you’re making Chicken Little as a movie!”
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Deal Has Been Reached to End Writers' Strike: Eisner
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Trader disclosure: On Feb.6, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (INTC), (YHOO), (DIS), (ATVI), Najarian Owns (AIG) Puts; Najarian Owns (AAPL) Calls, (NYX) Calls, (SKS) Calls; Najarian Owns (BIIB), (C), (CSCO), (MS), (MSFT), (YHOO), (AMR), (CTSH); Finerman Owns (GS); Finerman's Firm Owns (AEO), (BR), (DSW), (JCP), (KSS), (MO), (MSFT), (PLCE), (SKS), (SUN), (TSO), (WMT), (YHOO); Finerman's Firm Is Short (IJR), (IYR), (IWM), (SPY), (MDY), (SPG); Finerman's Firm Is Short (LEH) And Owns (LEH) Puts; Finerman's Firm And Finerman Own (FLS) (HD); Finerman's Firm Owns (CROX) And (CROX) Calls, Finerman Owns (CROX); Finerman's Firm Owns Shares Of Royal Bank of Scotland Group plc; Finerman's Firm Owns Shares Of HBOS plc; Finerman's Firm Is Short The Pound; Terranova Owns Crude Oil; Vivendi Owns 20% Of NBC Universal, The Parent Company Of CNBC