• by Wayne Friedman , 7 hours ago

Paramount Skydance would need to make a major cable TV network divestiture commitment to meet some traditional regulatory threshold guidelines, according to one analyst. 

A possible deal could settle or reconcile complaints coming from a 12-state lawsuit against the company to stop its WBD deal, according to other industry executives.

The Department of Justice (DOJ) has already cleared the Paramount Skydance acquisition of Warner Bros. Discovery. 

To come in under historical thresholds that the Department of Justice and the Federal Trade Commission use to evaluate mergers, Michael Morris, media analyst of Guggenheim Securities, offers four scenarios that Paramount Skydance would need to consider to possibly address key areas of the lawsuit:

- Sell Warner Bros. Discovery’s CNN and TBS channels

- Sell 9 core Discovery group cable networks (Discovery, HGTV, Food Network, TLC, OWN, Travel Channel, Animal Planet, Magnolia and Discovery Turbo)

- Sell Paramount’s 11 cable networks: Nickelodeon, MTV, Comedy Central, BET, Paramount Network, VH1, Nick Jr., TV Land, TeenNick, CBS Sports, CMT

- Sell CNN and those 9 Discovery channels

Any of these decisions would put the entire merger deal under a 1,800 HHI index. HHI stands for the "Herfindahl-Hirschman" Index.

HHI is a formula used by regulatory bodies such as the Federal Trade Commission (FTC) and the Department of Justice (DOJ) to measure market concentration and to approve or deny a deal.

Any potential divestment deals will give a post-merger score of a Paramount Skydance-WBD combination of between 1,670 and 1,788, Guggenheim says.

Currently with no divestment, the deal stands at a 2,106 HHI index.

A merger of Paramount-WBD will have an overall 28.5% share in terms of total cable TV network share.

The index factors in post-merger shares of the new company as well as every competitor in the market such as Walt Disney, NBCUniversal and Fox Corp., etc.

The DOJ and the FTC also view the changes in market share for those individual companies as they stand before and after the deal -- which has been described as the “delta,” the Greek letter symbol representing “change in." This is the measure called ΔHHI. 

Anything over a 100 index warrants a concern. As it stands now the deal is at a 339 index. After any of those cable networks sell off deals, Guggenheim estimates the company will have anywhere from a  20 to a -98  ΔHHI index.

Similarly, looking at theatrical share -- the average box-office revenue (2022-25) of all Paramount-Warners Bros. films yields a 27.9% share. This is slightly higher than the lawsuit’s complaint level of 27.0%. 

Like that of its cable TV business, the post-merger HHI index and ΔHHI index are also well over norms for a combined theatrical business operation.

Box-office revenue can swing dramatically for many studios, depending on the number of theatrical releases.

For example, Paramount’s share fell to 6.7% in 2025 from 18.1% in 2022, while Warner Bros. climbed to a 23% share in 2025 -- up from 13% in 2022.