As the legal battle between Paramount CEO David Ellison and California Attorney General Rob Bonta over the $110 billion Warner Bros. Discovery merger drags on, investment bankers are preparing for potential asset sales that could come with a settlement.
Bloomberg reports that bankers have approached would-be buyers about acquiring New Line Cinema, which has produced “It” and “The Lord of The Rings: Rings of Power.” The outlet also said that WBD’s cable networks are attracting interest, noting that some potential buyers have weighed bidding for Comedy Central.
Representatives for Paramount and Warner Bros. Discovery declined to comment.
The report comes as Bonta told TheWrap on Monday that he would be open to a carve out of a “significant” portion of the combined company’s 50 basic cable channels as one structural remedy to address his concerns with the merger, but did not elaborate on which channels he would like to see spun off.
Paramount’s previous leadership notably tried to sell its majority stake in BET, but ultimately decided to reverse course. Under Ellison, the company has also explored strategic partnerships for MTV.
Additionally, a potential sale of CNN has become a major point of focus in the litigation with the states and Writers’ Guild of America, though Paramount has indicated it is unwilling to part with the news network. Bonta has also publicly said a sale of CNN on its own would not be enough to satisfy the states’ concerns.
“We have some thoughts on [specific channels]. I’m not going to share those with you,” Bonta told TheWrap when asked directly about structural remedies and CNN. “If we do end up ever having productive settlement negotiations, that is something to be discussed.”
In addition to divestitures, the Wall Street Journal reported that Bonta would be interested in the Paramount and Warner Bros. Discovery’s studios operating separately and independently from one another.
The Journal’s reporting prompted Bonta to cancel a mediation session that was scheduled with Paramount on Monday. When asked about the possibility of restarting talks, Bonta said settlement discussions could resume as soon as this week, but that Paramount has “got to figure out where the leaks are and shut them down.”
“Once they figure that out, we’ll be happy to talk with them,” he continued. “I don’t know how long it’ll take them to figure it out and to fix it, but when they do, we’re ready.”
A Paramount spokesperson said the company “remains hopeful and is committed to good faith discussions with Attorney General Bonta’s office for an efficient resolution of our pending litigation.”
“Any such discussions will be limited to the AG’s office and authorized Paramount leadership,” Paramount’s spokesperson continued. “We appreciate the heightened interest in this merger, however, any reports inferring knowledge of the details otherwise are speculation, not fact.”
