Consolidation Processes Starting at Warner Bros. Discovery (NASDAQ:WBD), CBS News Radio Dead

Entertainment giant Warner Bros. Discovery WBD -0.69% ▼ and Paramount Skydance PSKY +2.34% ▲ are getting the ball rolling on their deal, though it has not completed the regulatory gauntlet as yet. And already, there has been one major casualty within the group: CBS News Radio. The storied news organization is being shut down altogether as part of a set of cuts, which are still ongoing within Paramount. The news hit Warner only slightly, with shares down fractionally in the closing minutes of Friday’s trading.

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Reports suggest that about 6% of CBS News is set to lose their jobs as a result, or around 70 total people. This follows earlier reports from October where 100 people were set to lose jobs. It is also worth pointing out that Paramount Skydance is, at last report, still trying to achieve $3 billion worth of cost savings from the deal that made it Paramount Skydance to begin with.

But Warner is also looking to contribute to keeping as many survivors as possible. Reports note that HBO MAX will play a role in promoting the TNT Sports subscription video on demand (SVOD) service. Those who sign up for an annual TNT Sports plan—which will run $35 per month—in the area will get the ad-supported tier of HBO MAX for an extra $2.70 per month.

Keep Hollywood Jobs in Hollywood

Meanwhile, a report from the Hollywood Reporter noted that David Ellison, fresh off the mostly-successful Warner / Paramount merger, is offering up a sop to California’s lawmakers, likely to keep them from causing trouble with the merger. The sop takes the form of a letter in which he details how to keep Hollywood jobs in Hollywood. Apparently CBS News Radio jobs do not count as part of Hollywood jobs.

Ellison’s letter noted, “I firmly believe that uniting Paramount and Warner Bros. Discovery presents a unique opportunity to build a true champion for the creative community, one that can and will bring more stories to life, support filmmakers and talent with real scale, and compete effectively on the global stage as an independent media leader.” More concrete promises included a 15-film slate annually, third-party licenses in both directions, and a minimum 45-day theatrical film window.

Is WBD Stock a Good Buy?

Turning to Wall Street, analysts have a Hold consensus rating on WBD stock based on 12 Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 157.26% rally in its share price over the past year, the average WBD price target of $29.75 per share implies 8.42% upside potential.

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