We know that entertainment giant Warner Bros. Discovery (WBD) has had an interesting plan for sports lately, with a lot of focus around niche sports that might not get a lot of airtime any other way. And while some have dismissed this as just Warner’s equivalent of ESPN 8, The Ocho, there are signs that Warner may have something bigger in mind after the split hits. Investors were feeling the love, however, and sent shares surging up nearly 4% in the closing minutes of Tuesday’s trading.
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The new reports suggest that, once the spinoff hits, TNT Sports will become the tentpole operation for a streaming service that is heavily sports-centered. While this left some with questions about whether or not HBO Max would offer sports after the split, others wondered if this would merely mean a whole lot more sports content, but under a different roof and with a paywall attached.
Word from Gunnar Wiedenfels, who will be taking over the network operations once the split happens, noted, “I don’t think there is a need to sublicense. In fact, Luis [TNT Sports CEO] and the team are working hard on developing the go-to-market approach to utilize our streaming rights going forward.” So the channels operation will not be looking to sublicense its content, but instead build it out into a new streaming outlet. This does look like free sports on HBO Max will be out of the picture, though, especially without sublicensing involved.
More Movies
The studios unit is also getting fired up, with plans to put more movies into theaters every year. That should not be surprising; movies in theaters are potentially a very big hit, and Warner plans to flood the theaters with them. In fact, Warner looks to have an average of one movie a month in theaters, potentially more, and how it will do it might be a surprise: it will draw on all its properties at once.
Word from CEO David Zaslav noted that Warner looked to release “1-2 Warner Bros. Pictures tentpoles (primarily utilizing well-known Warner Bros. IP), 1-2 DC Studios films, 3-4 New Line Cinema releases (including horror), 1-2 WB Animation titles, [and] a select number of moderately budgeted original films.” So basically, all the Warner arms will be running at the same time, with everything from cartoons to horror, and trying to get as much time on big screens as they can.
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 52.69% rally in its share price over the past year, the average WBD price target of $13.57 per share implies 21% upside potential.
