The battle between Paramount and California Attorney General Rob Bonta over the studio’s proposed merger with Warner Bros. Discovery does not appear close to ending. As Hollywood waits for the dispute to play out in court, a new report examines what could happen to WBD if the deal collapses.
Recent analysis from TheWrap and Bloomberg Intelligence points to three possible paths. WBD could revive its original plan to split into two companies, sell off individual assets, or use Paramount’s $7 billion breakup fee to remain independent.
That final option would give CEO David Zaslav some financial breathing room. However, industry experts doubt the company could continue in its current form for long.
Warner Bros. Discovery Could Return to Its Split
Before agreeing to sell itself to Paramount, Warner Bros. Discovery planned to divide into two publicly traded companies. TheWrap suggests that a drop in WBD’s stock price, combined with its longstanding debt problems, could push the company back toward that strategy.
Under the original plan, one company would have included Warner Bros. Pictures, DC Studios, HBO and its flagship streaming service, along with WBD’s production operations. The second would have housed CNN, TNT, Discovery, and its remaining cable networks.
The official logo for HBO Max – Warner Bros. Discovery
READ: Eric July Responds After Comic Book Reddit Mods Label Rippaverse a “Hate Group”
Morningstar analyst Matthew Dolgin believes WBD would not have to start the process from scratch.
“I’d expect a material portion of the work to implement the split would not have to be redone or paid for again,” Dolgin said.
He also argued that separating the businesses could unlock more value than keeping everything under one corporate roof.
Still, a full breakup would not be simple or cheap. Dividing the company could bring legal complications, tax concerns, and substantial restructuring expenses.
Warner Bros. Discovery Could Sell Its Assets Individually
Rather than attempt another massive corporate split, WBD could remain intact while gradually selling off parts of its portfolio.
Wharton M&A strategy professor Paul Nary warned that the best opportunity for a clean separation may have already passed.
“The time to split was yesterday,” Nary said. “Piecemeal sales are more likely than another big deal.”
Warner Bros Discovery Logo
READ: Typhoon Lagoon Closes for Seasonal Refurbishment
A valuation from Bloomberg Intelligence helps explain why buyers may already be circling. WBD’s studio and streaming businesses are estimated to be worth approximately $70.2 billion.
Netflix, Apple, and Amazon were identified as possible suitors that could be interested in acquiring those assets as a whole, although there are currently no signs that Apple or Amazon is considering such a deal. Netflix returning after losing the bidding war to Paramount would be a particularly ironic twist.
WBD’s linear television networks are valued at another $17.86 billion—for now. As viewers and advertising dollars continue to leave pay television, the networks’ value and earning potential will likely keep declining.
The cable channels could be sold together or divided among buyers such as Nexstar Media Group and several private equity firms. WBD could also raise money by licensing or selling individual properties.
Warner Bros. Discovery Could Bank the Breakup Fee and Slash Costs
The third option would be to collect Paramount’s $7 billion breakup fee and try to continue as an independent company.
That money would help WBD pay down debt and stabilize its finances, but it would not solve the company’s larger problems. WBD would still have to navigate a struggling cable television business and an increasingly competitive streaming market without a merger partner.
Remaining independent would not necessarily protect the company’s employees, either. WBD has already spent months in limbo, with Paramount’s approval required for major structural changes, large acquisitions, and certain significant contracts.
WBD CEO David Zaslav Speaks at a New York Times event – YouTube, New York Times Events
READ: Matthew Lillard Says He’s ‘Ashamed’ He Returned for ‘Scream 7’ After Melissa Barrera Firing
Returning to normal operations after such a lengthy delay could force Zaslav to make difficult decisions, including major spending cuts and additional layoffs.
For now, Warner Bros. Discovery remains stuck in a holding pattern. Federal regulators and foreign governments have allowed the transaction to proceed, but the California-led lawsuit continues to block its completion.
Unless the two sides reach a last-minute settlement, a trial scheduled for March 2027 could determine whether WBD joins Paramount or is forced to choose among three far less certain futures.
What do you think will happen if the Paramount deal with Warner Bros. Discovery fails? Sound off and let us know!
