When entertainment giant Warner Bros. Discovery (WBD) finally sets up its split between the studio operation and the linear television arm, the line may be drawn between much smaller operations. Warner announced that it was poised to cut 10% of its Motion Picture Group. The news managed to strike a solid chord with investors, though, who sent shares up fractionally in the closing minutes of Wednesday’s trading.
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The layoffs will not only be substantial, but they will be wide-ranging. Layoffs will hit distribution, marketing, operations, production, strategy, and theater ventures, noted a Deadline report. The report noted that the cuts have been in the making since early this year, and are part of a wider strategy shift away from a “United States/international management model” and over to a “global structure” model.
Warner is also looking to “…evolve our teams to ensure films made here at Warner Bros. continue to receive world class release campaigns, and we engross audiences with the kind of memorable in-theater experience only the big screen can offer.” Given the growing prominence of streaming, one immediately wonders just how true this is, and why the biggest change seems to be that, whatever Warner actually does, it will be doing that with fewer people.
Going Back To What Didn’t Work Once
Most of us likely remember the debacle that was Suicide Squad: Kill the Justice League. That game did not do Warner’s bottom line any favors after it came out and basically left a crater. But new reports suggest that Warner is planning to go back to the DC Comics live-service game well, and produce more of what failed last time.
Reports note that Warner has put up a job listing for an Executive Producer for such a game, with a particular focus on being able to “…oversee post-launch content and live service strategy, ensuring ongoing player engagement.” It is still very early stage stuff—they are only now looking for an executive producer, after all—so there is not much known as yet about the game itself. Maybe a Superman tie-in, to piggyback on the recent successful movie. Or perhaps a Batman version to take advantage of the upcoming release. But, to whoever gets that job: the odds of succeeding in comparison to the last massive failure are very good!
Is WBD Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on WBD stock based on 10 Buys and eight Holds assigned in the past three months, as indicated by the graphic below. After a 51.68% rally in its share price over the past year, the average WBD price target of $13.36 per share implies 0.72% upside potential.
