“Inevitable.” That is a word that carries a lot of weight, especially when dealing with entertainment giant Warner Bros. Discovery (WBD) and the chances of it merging with Paramount Skydance (PSKY). But FX chairman John Landgraf believes that a merger between Warner and Paramount is just that, likely “inevitable.” Landgraf believes that the names may change, but the landscape all but requires merger activity. And it certainly seems like shareholders agree, as shares jumped 3% in the closing minutes of Thursday’s trading.
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With the rise of streaming, Landgraf noted, the studio system can only go so far. It now has to compete with massive tech firms like Netflix (NFLX), Apple (AAPL) and others in space that it formerly held to itself. Moreover, many of the “great legacy majors” simply do not have the scale necessary to launch and maintain global streaming services. A look at how far behind HBO Max is when compared to Netflix will make that much quite clear.
But Landgraf acknowledged that such a consolidation would be a problem, particularly for the “creative community.” “…essentially, there’ll be one less buyer,” Landgraf noted. And indeed, buyers have been a bit of a problem of late since the near-total loss of the physical media concept. Making sales to video store chains is now largely impossible.
Pushing Back the Documentary
Meanwhile, Warner is also pushing back a planned release. Grit and Glory, an eight-part docuseries about the enduro World Cup, has been moved to sometime this fall after missing its initial release window of sometime in August. WBD Sports expects to release more information on the series, and on more specific release dates, soon.
The series will still ultimately bring us a set of enduro athletes in a series of 23-minute episodes, using a combination of race footage and what is described as “…exclusive behind-the-scenes access.” Earlier, similar releases suggest that the first episode will be an “explainer” episode followed by the seven stops of the 2025 enduro World Cup series.
Is WBD Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on five Buys and 10 Holds assigned in the past three months, as indicated by the graphic below. After a 114.17% rally in its share price over the past year, the average WBD price target of $14.61 per share implies 21.28% downside risk.
