Paramount Skydance Corp. is reportedly considering selling off cable and real estate assets as it looks to settle a multistate antitrust lawsuit threatening to derail its $111 billion merger with Warner Bros. Discovery Inc.
Initially agreed upon in February, the all-cash merger was challenged in court by 12 state attorneys general in July on antitrust claims, led by California’s Rob Bonta. The deal, though already approved by the Department of Justice and at least 68 international authorities, reached an impasse in California’s northern district court as the last hurdle.
Alleging that the merger could give the combined company an illegally large market share in movies and cable TV, the attorneys achieved a temporary restraining order to halt the progress before a March trial date. That pause could cost Paramount, who must pay Warner Bros. Discovery shareholders about $7 million a day if the merger ticks beyond Sept. 30 this year.
To reach a settlement, Paramount has started weighing multiple options that include “structural changes to the deal,” according to Bloomberg. Warner Bros Discovery assets are worth almost $18 billion, and they are not indispensable to the companies. Paramount already put HGTV and the Food Network on the chopping block in recent weeks before pulling back, Bloomberg reported.
Other cable networks are likewise getting investor attention despite the initial withdrawal. Burbank’s New Line Cinema, the Warner Bros. Discovery subsidiary behind “The Lord of the Rings” series and the most recent two-part adaptation of Stephen King’s “It,” also saw bankers approach with buyout interest.
“We remain hopeful and stand ready to continue good faith discussions to resolve the attorney generals’ suit inclusive of structural remedies to move forward with our transaction,” Paramount told Bloomberg in an Aug. 24 statement.
The new development came a day after Bonta canceled a meeting with Paramount, accusing the company of leaking false information and “demonstrating a lack of good faith,” Bonta said in a separate statement.
Paramount, who has since denied the claim, met with the attorney general’s office Friday to discuss preliminary terms of a potential settlement.
“As soon as Paramount stops playing games and engages sincerely, my office is happy to meet again,” Bonta said.
The New York Times reported first on his decision to cancel the meeting. Identifying the theatrical distribution, blockbuster distribution and cable licensing markets as key areas of contention, the attorney general further told Bloomberg that “if (Paramount) want to propose a structural remedy for each of those markets, we’ll listen.”
Warner Bros. Discovery stock has risen on hopes for a potential settlement, according to a Seeking Alpha report. It has increased 4.8% since the litigation began July 13, closing Wednesday at $28.39 per share – edging closer to the $31 per share deal in Paramount’s offer.
Paramount’s stock has hit its 52-week low at $7.62 July 31, though it increased by nearly 44% since then to close at $10.97 by Wednesday.
Cable performance
Having seen better days, the cable TV business is increasingly struggling across the board.
Warner Bros. Discovery posted a 17% decline in global linear network revenue in the second quarter this year compared to the same period in 2025, driven by a 10% drop in domestic linear pay TV subscribers. The Walt Disney Co. sold off its shared ownership in A+E Television Networks to venture partner The Hearst Corp. for 1.2 billion early last month. Versant Media Group Inc., after spinning off from Comcast Corp. in January, has shredded more than 13% in market capitalization by early September.
Though initially reluctant to divest its cable assets, Paramount might sacrifice them to secure the deal and prioritize the large intellectual property library that comes with it, said Corey Martin, managing partner at Beverly Hills-based entertainment law firm Granderson des Rochers, in July. Two last lawsuits currently block its way, including one from the Writers Guild of America.
