With the merger between Paramount (PARA) and Skydance coming to what looks like a successful conclusion, a new allegation has emerged that Paramount brass is not playing fair with unions. Indeed, allegations of “union busting” have emerged. But investors do not seem to mind, as shares finished up 1.8% in Wednesday’s trading session.
The reports, noted in The Hollywood Reporter, revealed that post-production staff retained by Paramount—dozens of them, all told—got together to pen an open letter to management, declaring that Paramount is “union busting.” In fact, the Digital Post Services unit is set to be removed entirely from Paramount, and the 38 employees contained therein are all part of the Motion Picture Editors Guild.
Where it gets particularly interesting is that, on the same day that the post-production crew was informed of the layoffs, work orders emerged that said that current work on this front was to be farmed out to other vendors in the field. Considering how close this whole sequence of events was to the recent actors and directors strikes, it certainly seemed—at least to some—like a move to cut out a union operation and replace it with outside contractors.
Paramount+ Gets an Alphabet Boost
Meanwhile, in a field not often considered, Paramount will be augmenting its Paramount+ streaming service with a little help from Alphabet (GOOG) (GOOGL). Paramount will be putting to use a new chip designed by Alphabet, with some technology from ARM Holdings, to put extra life into its streaming capability.
The new Axion chip, reports note, will use significantly less energy than many currently available processors and, in turn, make Paramount’s streaming operations that much more efficient. And, of course, much more cost-effective. Will this be the first time we see a discount on streaming services? That may be a bit too far, but Paramount has long been pushing for cost-cutting ever since the Skydance merger looked like it would kick in.
Is Paramount Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Hold consensus rating on PARA stock based on three Buys, six Holds, and four Sells assigned in the past three months, as indicated by the graphic below. After a 0.51% loss in its share price over the past year, the average PARA price target of $12.67 per share implies 18.86% upside potential.
