“We’ve Seen What Happens When Corporations Consolidate Power” Warner Bros. Discovery (NASDAQ:WBD) Slips as Opposition Emerges

Entertainment giant Warner Bros. Discovery WBD -1.04% ▼ has started up new processes with Paramount Skydance PSKY -0.77% ▼ , which may well own the company should the recent deal pass regulatory muster. However, that deal will not go through without opposition. Both the Teamsters and a state attorney general are coming out against the deal, and this may put a stop to the deal before it even truly begins. Warner shares slipped modestly in the closing minutes of Friday’s trading.

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The International Brotherhood of Teamsters put its lobbying muscle to work, calling on the Department of Justice to block the deal between Paramount and Warner unless the deal comes with “worker protections.” Paramount, for its part, has seemed eager to make clear that worker protections will not truly be necessary, as few layoffs are planned. But as we saw yesterday, not even Warner staff believed that fully.

The Teamsters’ general president, Sean O’Brien, actually had a hand in nominating Lori Chavez-DeRemer for Secretary of Labor. O’Brien was also a Trump labor ally. Though this may not be enough to stop the deal, given Trump’s own friendships with Paramount CEO David Ellison, and his father, Larry Ellison.

More Opposition

Another opposing force stepped up to take on the merger in the form of California Attorney General Rob Bonta. Bonta declared that the federal government had “…abdicated the federal administration’s responsibilities to hold big corporations accountable to the law and protect a competitive marketplace.” Bonta outlined many of the same concerns as the Teamsters, including streaming service consolidation and likely layoffs, despite, again, Paramount’s insistence to the contrary.

If the Justice Department signs off on the deal, California or other states could bring their own lawsuits into the picture. Though how far those suits will get if the Justice Department does sign off is unclear, as they could ultimately look like petty partisan bickering.

Is WBD Stock a Good Buy?

Turning to Wall Street, analysts have a Hold consensus rating on WBD stock based on 13 Holds and two Sells assigned in the past three months, as indicated by the graphic below. After a 169.19% rally in its share price over the past year, the average WBD price target of $29.68 per share implies 9.48% upside potential.

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