Antitrust Concerns Hinder Netflix's Acquisition
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: seekingalpha
- Antitrust Warning: Independent filmmakers and nonprofit groups have urged state attorneys general to block Netflix's $82.7 billion acquisition of Warner Bros. Discovery assets, arguing that the deal will raise consumer prices and restrict competition in Hollywood, adversely affecting the film industry.
- Industry Impact: Netflix co-CEO Ted Sarandos acknowledged that while he believes the deal won't harm theaters, he also recognized that the concerns raised by Hollywood critics are 'rightfully so,' indicating widespread opposition within the industry.
- Political Opposition: U.S. Senators Elizabeth Warren and Mike Lee have strongly opposed the deal, while former President Trump has expressed support for Paramount Skydance Corp., highlighting the political divide surrounding the transaction.
- European Regulatory Scrutiny: European competition watchdogs are set to simultaneously review bids from Netflix and Paramount for Warner's assets, which could significantly influence the deal's outcome and further exacerbate market uncertainty.
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Analyst Views on WBD
Wall Street analysts forecast WBD stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for WBD is 24.98 USD with a low forecast of 14.75 USD and a high forecast of 30.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
5 Buy
9 Hold
0 Sell
Moderate Buy
Current: 27.980
Low
14.75
Averages
24.98
High
30.00
Current: 27.980
Low
14.75
Averages
24.98
High
30.00
About WBD
Warner Bros. Discovery, Inc. is a global media and entertainment company that creates and distributes a portfolio of branded content across television, film, streaming and gaming. The Company's segments include Studios, Networks and DTC. Studios segment primarily consists of the production and release of feature films for initial exhibition in theaters, production and initial licensing of television programs to its networks/DTC services as well as third parties, distribution of its films and television programs to various third party and internal television and streaming services, distribution through the home entertainment market, and others. Networks segment primarily consists of its domestic and international television networks. DTC segment primarily consists of its premium pay-TV and streaming services. Its brands and products include Discovery Channel, Max, DC, TNT Sports, Eurosport, HBO, HGTV, Food Network, OWN, Investigation Discovery, TLC, Warner Bros., and Cartoon Network.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Barry Diller Expresses Interest in Acquiring CNN
- Acquisition Interest: Media mogul Barry Diller approached Warner Bros. Discovery last year regarding a potential acquisition of CNN, although no serious actions were taken, indicating his ongoing interest in the network.
- Financial Outlook: Warner Bros. disclosed that CNN's revenue is projected to reach $1.8 billion by 2026, with expectations of growing to $2.2 billion by 2030, highlighting the network's profitability and market potential.
- Market Valuation: Analysts currently value CNN at approximately $4 billion, reflecting its significant position in the media landscape and potential attractiveness to investors.
- Strategic Hurdles: Warner Bros. is reluctant to divest CNN due to existing carriage agreements with cable providers and potential high tax liabilities, suggesting that the acquisition process may encounter complex legal and financial obstacles.
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Antitrust Concerns Hinder Netflix's Acquisition
- Antitrust Warning: Independent filmmakers and nonprofit groups have urged state attorneys general to block Netflix's $82.7 billion acquisition of Warner Bros. Discovery assets, arguing that the deal will raise consumer prices and restrict competition in Hollywood, adversely affecting the film industry.
- Industry Impact: Netflix co-CEO Ted Sarandos acknowledged that while he believes the deal won't harm theaters, he also recognized that the concerns raised by Hollywood critics are 'rightfully so,' indicating widespread opposition within the industry.
- Political Opposition: U.S. Senators Elizabeth Warren and Mike Lee have strongly opposed the deal, while former President Trump has expressed support for Paramount Skydance Corp., highlighting the political divide surrounding the transaction.
- European Regulatory Scrutiny: European competition watchdogs are set to simultaneously review bids from Netflix and Paramount for Warner's assets, which could significantly influence the deal's outcome and further exacerbate market uncertainty.
Continue Reading