Skydance eyes CNN sale to clear Warner Bros. Discovery merger hurdles in California

Skydance, the company pursuing an $110 billion acquisition of Warner Bros. Discovery, is reportedly considering the sale of CNN as part of its strategy to overcome antitrust objections raised by California. The legal chief for Skydance, Makan Delrahim, indicated that "all options are on the table" to address the lawsuit filed by the state. Delrahim, speaking at a "California Agenda" conference hosted by Politico, became the first company executive to publicly acknowledge the possibility of Skydance moving its headquarters out of California. He cited his fiduciary responsibility to shareholders as a factor in considering such a move, should the company face significant hurdles in the state. This development comes after the UK approved Warner Bros. Discovery's acquisition, with conditions related to the editorial independence of news content from CNN International and CBS News. The California-led antitrust lawsuit remains the primary regulatory obstacle, as the deal had previously received approval from U.S. federal regulators, China, and other jurisdictions. California Attorney General Rob Bonta and his counterparts in 11 other states are actively seeking to block the merger. They argue that the proposed combination would create a "media behemoth" capable of arbitrarily raising prices and diminishing competition in the film and television markets. The states have also raised concerns about the enforceability of Skydance's commitment to produce 30 films annually, suggesting that even if fulfilled, the merged entity would still possess the power to increase prices and lower quality.

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In some ways, you have a responsibility to shareholders, a fiduciary duty, and these are things you have to consider.