If Paramount Has to Sell Cable Networks, Who Would Buy?

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With talks between Paramount and the state attorneys general in limbo, it’s worth looking at one of the elements that might get the two sides together: the sale of some of its cable networks.

While California Attorney General Rob Bonta is pushing Paramount to divest some of the combined company’s networks, is there any demand for them? After all, cord cutting has decimated the cable business and despite their cash flow, cable networks are now among the least desirable media industry assets because they’re all in steady decline.

Private equity may be in the mix, as well as local TV owners. Read on for more details.

On the other end of the scale, sports franchises seem to be selling like hotcakes, as can be seen in two entries in our Deal Sheet section.

Read on for this week’s The Ledger column, and to get this as a newsletter in your inbox every Friday, click “newsletters” under your WrapPRO settings.

Who Wants to Buy a Cable Network?

If Paramount does agree to sell some of its cable networks to settle the antitrust case stalling its acquisition of Warner Bros. Discovery, it may struggle to find takers.

“It’s hard to find a buyer for a depreciating asset,” Scott Robson, senior research analyst in the Kagan Media Research Group at S&P Global Market Intelligence, told The Ledger.

But that’s not to say there aren’t buyers at all.

Cable network fundamentals have been deteriorating, with subscribers cutting the cord and advertising and distribution revenues falling.
The most-likely buyers of cable networks are private equity investors who can borrow money and pay it off using the networks’ still reliable cash flow.
When Disney sold its stake in A+E Global Networks, the multiple was only 4 times EBITDA, a number not desirable for a publicly traded business.

Private equity would be the most likely candidate since they’re adept and willing to borrow money and milk the cable networks for a short-term profit.

Also in the mix are local broadcast TV station owners that have dabbled in national networks. That includes Hearst, which earlier this month bought Disney’s 50% interest in A+E Global Media for $1.2 billion; Nexstar Media Group, which owns the CW and NewsNation; E.W. Scripps, owner of Ion, and Byron Allen’s Allen Media Group, owner of The Weather Channel.

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After Comcast announced plans to spin off its cable networks in 2024 and Warner Bros. Discovery similarly planned to spin off its cable networks in 2025, it appeared there would be a big round of cable network M&A activity, with some entity possibly rolling up a bunch of channels to gain scale and leverage against distributors.

Instead, Netflix launched a bid for Warner Bros. Discovery’s streaming and studio assets, but not its cable properties. And Versant, the Comcast spinoff that owns USA Network, SyFy and E!, said it wants to reduce the share of revenue it earns from linear TV to less than 50%.

“It seems like Paramount’s been trying to sell BET Media for about five years, but nothing ever came to fruition,” Robson added.

The Turner networks could fetch a decent price. Bloomberg Intelligence estimates that CNN, TBS and TNT could fetch roughly $8 billion in a sale. Indeed, CNN has long been bandied about as a way for Paramount to get the state AGs to back off. Barry Diller has expressed interest in buying CNN should it be for sale. Former CNN CEO Jeff Zucker, now with RedBird Capital, might also be among the bidders.

But earlier this month, Paramount CEO David Ellison wrote an op-ed in the New York Times asserting that ownership of CNN was at the heart of the challenges to the merger, and denied any interest in selling it.

Cash Flow

There’s a reason why Paramount is keen to hold on to these assets. Despite falling ratings, CNN and TNT generate the cash flow the company needs to pay down the debt incurred from buying WBD, Robson noted.

“Are they going to sell off MTV? If there’s an actual buyer there, are they going to sell just the rights to the linear feed, or are they going to sell the entire backlog of content? Because those are two very different business models,” Robson said. “Either way, it’s going to be hard for them to find a buyer.”

Robson notes that cable network ad revenues have been falling. They are declining 10% so far this year compared to 2025. Carriage fee revenues are down 3% as viewers and sponsors have cut the cord and adopted streaming. Pay-TV subscriptions, which peaked at more than 100 million in 2012, is down to about 60 million this year, including streaming MVPDs like YouTube TV. Citing a recent survey of homes that would keep cable to access sports programming, Robson said the number of pay-TV subscribers could fall another 30%.

Before spinning off most of its cable portfolio, Comcast shuttered several low-rated networks rather than selling them.

“It’s like deeming them worthless,” Robson said. “So, you could make an argument that some of these are worthless based on how Comcast views it.”

Warner Bros. and Paramount merger promises 30 films per year

DEAL SHEET

Arctos, a private equity firm owned by KKR, bought a 10% stake in the Atlanta Falcons of the National Football League in a deal that values the team at $10.6 billion. Private equity firm Arctos is adding a fourth NFL team to its portfolio. Arctos already owns stakes in three other NFL teams: the Los Angeles Chargers, the Buffalo Bills and the Cleveland Browns.
Investor Marc Shad agreed to buy a controlling stake in the Minnesota Timberwolves and the WNBA Minnesota Lynx from Marc Lore in a deal that values the franchises at $4.5 billion. Lore bought the team last year. Former baseball star Alex Rodriguez, who was a partner with Lore, will remain as part of the new ownership group.
Streamer DAZN is acquiring EverPass Media, which holds the commercial rights to NFL Sunday Ticket, as well as live sports from Peacock, Netflix, Paramount and Apple. EverPass was formed by the NFL’s 32 Equity investment unit and RedBird Capital Partners. Terms of the deal were not disclosed.
WildBrain Ltd. acquired Personality AI, which will create new experiences using WildBrain’s characters including Peppa Pig. WildBrain paid $11 million in cash and $1 million in stock. After a year, WildBrain will pay another $2 million in cash and stock.
Stability AI raised $76 million in new capital in a Series B fundraising that included Electronic Arts, Sony Music Group, Universal Music Group and Warner Music Group. The company, which builds AI products for professional creatives, has raised $232 million since CEO Prem Akkaraju was appointed in 2024. Individual investors in Stability AI include Sean Parker, Eric Schmidt, James Cameron, Kevin Mayer, Mark Burnett, Patrick Whitesell, Prem Akkaraju, Reuben Brothers, Robert Nelsen, and Vivi Nevo.
Puck, the entertainment newsletter operation, said it is in talks with RedBird Capital Partners for an investment that would value the media company at $250 million. The deal would not include shares held by Puck’s founders or journalists. Puck was founded in 2021 and has about 50,000 paying subscribers, according to Reuters.

WRAP 20 INDEX

Here’s how the companies in our Wrap 20 Index performed this week.

FINANCIAL ROUNDUP

The Paramount-WBD Saga (Continued)

The twists just keep coming. Two Republican attorneys general on Tuesday filed a motion with the Supreme Court to prevent an antitrust lawsuit brought by the AGs in a dozen other states from blocking the acquisition of Warner Bros. Discovery by Paramount Skydance.

In a filing, Brenna Bird of Iowa and Austin Knudsen of Montana said they wanted to stop “politicized antitrust enforcement by a small number of states.” The deal was approved by the Trump administration’s Justice Department.

Their filing came after Bonta, the Democrat who is spearheading the suit, abruptly canceled settlement talks with Paramount that were supposed to kick off Monday. He blamed Paramount for leaking details of a preliminary meeting as evidence that the company hadn’t acted in good faith, although Paramount has denied any involvement in the reports.

Bonta later told TheWrap in an exclusive interview that he would be ready to restart talks once the leaking stopped.

Disney Cuts Align with Guidance

Evercore ISI analyst Kutgun Maral said that Disney’s announcement that it was launching a voluntary early retirement offer for executives was a case of the company “delivering on cost guidance it had already given investors.”

Maral said that by focusing the cuts on leadership roles in its entertainment, ESPN and corporate division, it’s able to cut overhead without sacrificing investment in content, parks staff or the building of cruise ships. The analyst rates Disney stock “outperform,” and has a target price of $144 per share.

The analyst added, however, he was not yet able to quantify how much the plan would lower costs because it is voluntary, but he noted that it would benefit earnings per share growth for fiscal year 2027. Those savings, however, would be offset by near-term reductions in free cash flow because of severance and related charges.