Entertainment giant Paramount Skydance (PSKY) may or may not end up with Warner Bros. Discovery (WBD) as part of its operations. But right now, Warner is carrying on as though it is business as usual, without Paramount. Warner recently launched its own upfronts, looking to book ad sales for the near-term. The news seems to have buoyed Paramount, and shares were up over 3% in the closing minutes of Wednesday’s trading.
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Reports noted that Warner planned to focus on three key points. The first was the “cultural relevance” of Warner means positive outcomes for advertising buyers. The second was that Warner understands its client base and delivers accordingly. The third was that advertising sold today was likely to be part of Paramount going forward, as Warner expects the merger to close in the third quarter.
In fact, Warner even had a key point ready for concerned ad buyers: this is not Warner’s first big deal. Back in 2022, after all, Warner got together with Discovery. This new merger—assuming it goes off—will be little different. Bobby Voltaggio, one of Warner’s advertising sales leads, noted, “This wonderful portfolio of world-class IP is still going to be intact. [Advertisers] can still transact against any of the endpoints. And we’re here to see it through until the merger happens.”
The FCC Takes Notice
Meanwhile, that merger will not go through without some opposition, as reports note the Federal Communications Commission (FCC) is already taking aim at one key part of the deal: the involvement of multiple Gulf State sovereign wealth funds.
Commissioner Anna Gomez is calling for the FCC to engage in “…a full, independent and rigorous review of the foreign ownership interests embedded in the proposed Paramount-Warner Bros. Discovery merger.” This is not only about the involvement of said funds, but about the potential national security implications found therein. Direct foreign ownership of broadcast licensees is generally limited to 25%. It can go all the way to 100% with FCC approval, if it believes doing so is in the public’s best interest.
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 7.87% loss in its share price over the past year, the average PSKY price target of $11.38 per share implies 4.41% upside potential.
