Investment Bankers Eye New Line Cinema, WBD Cable Networks as Paramount Legal Battle Drags On | Report

As the legal battle between Paramount CEO David Ellison and California Attorney General Rob Bonta over the $110 billion Warner Bros. Discovery merger continues, investment bankers are bracing for potential asset sales that could accompany a settlement. According to Bloomberg, bankers have been discussing the possibility of acquiring New Line Cinema, which has produced popular titles like "It" and "The Lord of The Rings: Rings of Power."

Additionally, WBD's cable networks, including Comedy Central, are reportedly attracting interest from potential buyers.

California Attorney General Bonta has indicated that he would be open to a carve-out of a "significant" portion of the combined company's 50 basic cable channels as a structural remedy to address his concerns with the merger. However, he has not specified which channels he would prefer to separate. In the past, Paramount's leadership attempted to sell its majority stake in BET, but ultimately decided to reverse course.

Bonta has also explored the possibility of a sale of CNN as a potential resolution to the litigation, though Paramount has made it clear that they are unwilling to part with the news network. Bonta has stated that a sale of CNN on its own would not satisfy his concerns. When asked directly about specific channels of interest, Bonta declined to comment, stating that such discussions would be relevant if settlement negotiations ever take place.

The Wall Street Journal reported that Bonta would also be interested in the Paramount and Warner Bros. Discovery studios operating independently from one another. This prompted the attorney general to cancel a scheduled mediation session with Paramount. When asked about the possibility of restarting talks, Bonta suggested that settlement discussions could resume as soon as this week, but emphasized that Paramount needs to address the "leaks" and fix the issues in order for talks to proceed.

A Paramount spokesperson expressed the company's commitment to good faith discussions with Attorney General Bonta's office for an efficient resolution of the litigation. They stressed that any such discussions would be limited to the AG's office and authorized Paramount leadership, and that any reports suggesting knowledge of the details are mere speculation.