It was bad news for entertainment giant Warner Bros. Discovery (WBD), as Monday arrived. First, Warner’s Sinners lost its top slot, and big, to the arrival of Disney’s (DIS) Thunderbolts*, which not only took the top slot, but beat its projected range. Then, Warner also got hit with new developments in a lawsuit over sports rights. Take these points together, and add some losses in animation, and shares slipped modestly in Monday afternoon’s trading.
The lawsuit, reports note, started up clear back in 2024, but has since added a lead plaintiff. The lawsuit suggests that Warner “….misled them (investors) about the financial health of its Networks division.” And, with the Trump Administration raising the potential of new tariffs on foreign-produced film, that is putting further strain on Warner’s networks division.
Much of the problem here is based around Warner’s “…handling of NBA sports rights negotiations,” reports note. With international rights a major part of not only sports revenue, but also revenue for those who broadcast sports—like Warner—that could mean a problem to come. And of course, the idea of reciprocal tariffs coming to American-produced movies means that international box office figures. So now, Warner’s network operations face substantial new potential charges, which will strain further its earlier “goodwill valuation” projections and make the court case that much more complex.
Paring Back the Cartoons
We know that Warner has been dialing back on its streaming aspirations, since it is no longer out to compete with Netflix (NFLX). But Warner is also apparently out to pare back offerings that it has already kept on streaming site Max. Reports note that several major animated projects are already removed from the platform, including Tom & Jerry, The Smurfs, The Flintstones, and two separate Scooby-Doo entrants.
What makes this development particularly odd is that the animation department at Warner is still trying to move forward. With several key projects now no longer available, but other projects potentially taking shape—including the revival of some old Cartoon Network properties—the future of animation at Warner is looking oddly amorphous right now.
Is WBD Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on nine Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After a 6.47% rally in its share price over the past year, the average WBD price target of $12.60 per share implies 48.58% upside potential.
