US Investors Are Reportedly Eyeing Warner Bros. Assets As Paramount Takeover Sees Prolonged Legal Tussle

• Wall Street bankers have begun approaching potential suitors to pitch key assets—including movie studio New Line Cinema and several prominent cable networks—as possible divestment targets. 
• While global regulators have approved the $110 billion merger, opposition from the Writers Guild and 12 state attorneys general, led by California, has stalled the transaction.
• Government authorities are reportedly demanding definitive asset sales rather than short-term concessions, leading industry observers to speculate that divesting CNN, TNT, or TBS may be necessary to resolve regulatory hurdles.

Potential buyers and Wall Street intermediaries are actively assessing valuable entertainment properties that could be unloaded as Paramount Skydance Corp.(PSKY) navigates prolonged antitrust litigation over its proposed takeover of Warner Bros. Discovery Inc. (WBD), Bloomberg reported on Tuesday.

Investment bankers have already reached out to prospective buyers about film studio New Line Cinema—the studio behind major franchises such as The Lord of the Rings and It—as well as various Warner Bros. cable channels, according to sources familiar with the conversations.

Paramount stock was up 2.6% on Tuesday, while WBD stock rose 0.5%.

State Regulators Push For Structural Remedies

Although Paramount has secured regulatory approvals across 68 international jurisdictions, including the U.S. Department of Justice and the European Union, the $110 billion acquisition remains blocked by lawsuits from 12 state attorneys general and the Writers Guild, Bloomberg reported.

California Attorney General Rob Bonta, who leads the coalition of Democratic state legal officers, recently halted scheduled settlement discussions following public leaks. Bonta emphasized that state regulators are seeking core structural alterations to the transaction—specifically targeting theatrical distribution, blockbuster distribution, and cable-channel licensing—rather than temporary conduct commitments that could prove difficult to monitor after the transaction closes.

Divestitures And Industry Impact

To satisfy regulatory pushback, Paramount is considering offering separate distribution terms to cable operators, Bloomberg reported. However, industry analysts indicate that more decisive asset sales may be necessary.

Industry experts noted that Paramount could spin off high-profile properties such as CNN, TBS, or TNT.

Rich Greenfield, an analyst with LightShed Partners, told Bloomberg in an interview that Paramount should sell the former Turner Broadcasting channels, including TBS, TNT, and CNN. Those assets may be more valuable than some of the other Warner Bros. networks, partly because they air sports. 

Selling CNN would also remove regulatory concerns about news overlap by not housing Paramount’s CBS and Warner Bros.’ CNN under the same roof, Craig Huber of Huber Research Partners told Bloomberg. 

PSKY, WBD Stock: Retail View

Retail sentiment on Stocktwits was ‘bullish’ with ‘normal’ message volumes on both Paramount and Warner stock. 

PSKY stock has dropped 21% year-to-date, while WBD has inched up 0.5% over the same period. 

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