There are good entertainment stocks, and then there are lousy entertainment stocks, such as AMC Entertainment (NYSE:AMC). 

The headline told the story. AMC Stock Falls After Disney’s Box Office Flop. Shares Are on Track for Their Worst Year Ever. I don’t know about you, but “ever” is long. 

As Barron’s pointed out, the movie business appears to be doing better than a year ago — the five-day box office sales for the Thanksgiving holiday period this year were $172 million, considerably higher than $122.8 million a year ago — which suggests there are some good stocks to buy amongst the bad. 

Year-to-date through Nov. 27, the domestic box office was $8.24 billion, on track to hit $9 billion by the end of 2023. It’s not $11 billion like in 2019 before the pandemic, but it’s coming along. 

So, which ones should you drop? Which ones should you grab? I’ve got two ideas for the former and one for the latter.  

AMC Entertainment (AMC)

AMC Entertainment’s share price is down nearly 78% in 2023, more than 89% over the past year, and 88% over the past five years. If you take it from AMC’s meme-stock highs of June 2021, its shares are down 97%.

An indication of just how unwanted meme stocks have become, Roundhill Investments is closing the Roundhill MEME ETF (NYSEARCA:MEME) on Dec. 11. Launched almost two years ago, the ETF will liquidate its holdings and send the proceeds to shareholders on Dec. 14. 

According to Investor’s Business Daily, more than 80% of the ETF’s 25 holdings are down from Dec. 12, 2021, when it launched — equally weighted and rebalanced every two weeks. AMC is the ETF’s lowest weight, at 3.32%. Given the performance of AMC in 2023, it’s likely been the lowest weighting for most of the year. 

Weirdly, despite three of the seven analysts covering AMC rating it an outright Sell, the median target price is $8 a share, 17% higher than where it’s currently trading.

I’ve had a problem with AMC stock for as long as I can remember. I just didn’t believe what CEO Adam Aron was selling. Most recently, in October, I suggested that he should resign after the catfishing scheme he got caught up in. 

AMC always trots out Aron’s long list of high-profile CEO jobs, including a decade in the top job at Vail Resorts (NYSE:MTN) between June 1996 and June 2006. However, most of the stock’s growth came well after he’d left the company.  

Its biggest issue is that it’s been saddled with too much debt — $9.3 billion as of Q3 2023 — for far too long. You can’t make money in the movie theater business when you’re saddled with debt. It works best when asset light.    

Warner Bros. Discovery (WBD)

Warner Bros. Discovery (NASDAQ:WBD) is a massive entertainment company with enormous debt — approximately $44.8 billion, 162% of its current market capitalization. 

Its CEO, David Zaslav, is a highly paid chief executive — $286 million in the past two fiscal years — who convinced his board that it made sense to buy Warner Media from AT&T (NYSE:T) in 2022, burdening the merged entity with excessive interest payments.

The argument for buying Warner Media was to scale its HBO streaming service with Discovery Communication’s Discovery+ streaming service to create a platform to take market share from Netflix (NASDAQ:NFLX) and Disney+. 

How’s WBD doing so far?

Warner Bros. Discovery reported earnings on Nov. 8. They weren’t good. Its shares fell nearly 20% on the news. A big part of the disappointment: Max, its streaming service revolving around HBO, has lost 2.5 million subscribers over the past two quarters, defeating the purpose of adding all the debt required to buy Warner Media.   

At the same time, all of its peers gained subscribers in the latest quarter (Max lost 700,000), suggesting that the bill of goods Zaslav sold his board isn’t coming to fruition as promised. 

“The underperformance by Warners is a bit of a disappointment given that everyone else has done better,” Naveen Sarma, a managing director at S&P Global, told Fortune.

Essentially, and this is only my opinion, not fact, former AT&T CEO Randall Stephenson created an ego project for himself when his company bought Time Warner in 2018 for $85.4 billion, and then David Zaslav created his ego project by merging with Warner Media.

I don’t see why anyone would invest in a company that’s been part of not one but two ego projects. 

Sphere Entertainment (SPHR)

Sphere Entertainment (NYSE:SPHR) is the company behind Sphere, the $2.3 billion state-of-the-art live entertainment venue in Las Vegas opened by U2 in September. The venue provides seating for 18,600 people and, more impressively, 54,000 square meters (581,251 square feet) of light-emitting diodes (LEDs). 

Sphere is the new name of Madison Square Garden Entertainment (NYSE:MSGE). It was spun off in April 2023 to create a live entertainment and media dynamo that includes the Sphere venue and MSG Networks, its regional sports broadcasting business. MSGE holds Madison Square Garden’s non-sports assets, including Madison Square Garden, Radio City Music Hall, the Radio City Rockettes, and the Beacon Theatre. 

This isn’t a stock from which you should expect big things soon. However, due to the popularity of U2’s opening show, Sphere added 11 shows to the band’s residency. They will now play 36 shows between the end of September and February. 

As expected, the company lost $58 million on an adjusted basis in the first quarter ended September 30. Revenues will be significantly higher when it reports its next quarterly earnings in February. Onward and upward.   

Live shows and events remain one of the entertainment industry’s most profitable and growing segments. I expect big things from Sphere in 2024 and beyond. It’s a spinoff buy.   

On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.