The news is starting to look grim for entertainment giant Paramount (PARA), as concerns mount over whether or not the deal with Skydance will actually go through after all. In fact, new reports out suggest that Paramount brass is “paralyzed by legal fears” and facing a series of deadlines that need to be met. That news is doing Paramount investors no favors, and they pulled back, sending shares down fractionally in the closing minutes of Monday’s trading.
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We know that Paramount and President Trump recently looked to extend one of those deadlines as a negotiation was in the works and seemed to be advancing smoothly. Good news, for the most part. Of course, a settlement with Trump will almost certainly immediately activate a separate lawsuit from the Freedom of the Press Foundation. Though it is unclear if the FPF’s lawsuit will halt the merger by itself or not.
But here is where the biggest problem kicks in. Those of you who have been with us since last April know that there are a set of automatic time extenders thrown into the contract between Paramount and Skydance. One of those already kicked in, and the second one is about to kick in on July 7. That will get us to early October, but there are no more automatic boosts after that. While there is also nothing saying that the deal will die if not complete by October 7, it remains to be seen if either side has the stomach to go for yet another year without a completed deal.
Another Shakeup
Meanwhile, another shakeup hit the company, as Barbari Zaneri, former chief program acquisitions officer, walked away, and Virginia Lazalde-McPherson stepped in to take her place. Zaneri had served 25 years with Paramount, and is stepping down to instead focus on a nonprofit agency she founded, the Gold Star Services Network.
Lazalde-McPherson steps in at an odd time, as one of Paramount’s biggest properties, South Park, is potentially up for renewal in a time when the budget is being watched particularly closely. Lazalde-McPherson will also be taking the reins at Showtime and MTV Entertainment as their chief acquisitions officer as well. Zaneri, meanwhile, had brought an array of new shows to the Paramount collective, including hits like Seinfeld and Family Guy.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on two Buys, eight Holds and five Sells assigned in the past three months, as indicated by the graphic below. After a 24.77% rally in its share price over the past year, the average PARA price target of $12.08 per share implies 0.83% upside potential.
