There is little doubt that the merger between entertainment giant Paramount Skydance (PSKY) and Warner Bros. Discovery (WBD) has caught a lot of people by surprise. And there is also little doubt that strong opinions lurk on either side of this arrangement. The New York Times (NYT) took a hand in the debate recently by way of a guest essay from actor Mark Ruffalo and American Economic Liberties Project director Matt Stoller. Paramount investors knocked Paramount down once more, sending shares slumping modestly in the closing minutes of Thursday’s trading.
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Ruffalo and Stoller’s essay made it clear: they are not in favor of the Paramount/Warner merger by any stretch of the imagination. And Ruffalo and Stoller believe they have plenty of support, based on what amounted to a petition letter signed by around a thousand actors, writers and the like against the merger. But when that seemed to do about as much damage as an apple core thrown at the side of a battleship, Ruffalo and Stoller examined the field and found out that the Hollywood system was making more of their supporters simply too afraid to speak out for fear of retaliation.
In turn, Ruffalo and Stoller are working to talk state attorneys general into short-circuiting the federal regulation process and interjecting their own instead. Then, Ruffalo and Stoller plan to turn their attention toward, apparently, the entire concept of streaming in general. The assurances offered by David Ellison about plenty of work for all, meanwhile, have fallen on deaf ears, with Ruffalo and Stoller saying with an almost-audible pout, “…we should know better than to trust promises by the ultrarich.”
Already Started
Paramount is not wasting any time, either, signing a new first-look deal with Warner Music Group (WMG) that will give Paramount access to a range of talent for upcoming biopics. Considering that the WMG catalog contains a range of acts from Fleetwood Mac and Cher to Dua Lipa and Cardi B, the fodder is extensive and wildly varied.
The deal will last several years, reports note. WMG production partner Unigram’s Amanda Ghost noted, “This unprecedented collaboration provides Warner Music artist and songwriters with the incredible opportunity to bring their stories, sounds, and repertoire to scripted features and animated films. This partnership finds new ways to empower iconic artists and to bring their creative worlds to the screen with music as a central character.”
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Sell consensus rating on PSKY stock based on one Buy, five Holds and four Sells assigned in the past three months, as indicated by the graphic below. After a 6.59% loss in its share price over the past year, the average PSKY price target of $11.38 per share implies 5.81% upside potential.
