Paramount faces calls to sell cable channels in Warner Bros. deal

MUMBAI: The merger talks are getting a little more tangled before they can get tied up. California Attorney General Rob Bonta is expected to seek additional concessions from Paramount before allowing its proposed $110 billion acquisition of Warner Bros. Discovery to move forward, according to a Wall Street Journal report cited by Reuters.

Among the measures reportedly under consideration are the sale of some Paramount cable channels and a commitment to keep Paramount’s film studio structurally separate from Warner Bros. The proposals could form part of discussions between Paramount and California officials as both sides explore a possible settlement to the state’s antitrust challenge.

Lawyers representing Paramount and California met on Friday to set the agenda for Monday’s talks, with the companies’ cable and film businesses expected to be central to the discussions.

Neither Paramount nor Warner Bros. Discovery commented on the report when approached by Reuters, while the California Attorney General’s office did not respond outside normal business hours.

California, along with 11 other states, sued in July to block the proposed transaction, arguing that combining the two media giants could reduce competition in film distribution and cable television. The states have raised concerns about the potential impact on movie theatres, pay-TV distributors, consumers and workers.

Paramount has argued that the deal would allow the combined company to expand film production rather than reduce it. CEO David Ellison has said the merged studio would target 30 film releases a year. State officials, however, have questioned how such a commitment could be enforced.

The reported cable-channel sale could address concerns over greater concentration in the traditional television business after the merger. Keeping Paramount’s film studio separate from Warner Bros., meanwhile, could limit the extent to which the two major movie operations are integrated.

That puts two of the deal’s biggest pieces cable networks and film studios squarely on the negotiating table.

For Paramount, an agreement with California could remove one major source of opposition, but it would not necessarily clear the path for the $110 billion transaction. The wider legal and regulatory challenges remain, and the companies have not confirmed whether they are prepared to accept the reported concessions.

For now, the deal’s biggest Hollywood plot is still being written and California appears keen to have a say in the ending.