Hedge fund reportedly in talks to purchase WBD cable assets including TNT

As Warner Bros. Discovery trudges along with a planned sale of its streaming and studio assets to Netflix, all while fending off a hostile takeover bid from Paramount, it appears some buyers are interested in the leftover cable assets that would be available should the Netflix deal close.

With all signs pointing to WBD moving forward with an announced agreement with Netflix, the next major step in the process would be completing a planned split of its forward-looking streaming and studios businesses from its legacy cable assets, which would include TNT Sports, CNN, and others. Completion of the Netflix deal would leave those cable assets as an independent entity dubbed Discovery Global.

Paramount, as part of its takeover argument to shareholders, asserts that the Discovery Global assets would not be worth much independent of a larger media corporation. Thus, from Paramount’s perspective, shareholders would be better served accepting its deal which would include all of WBD’s businesses, not just the studio and streamer.

It appears Paramount is a bit misguided in that premise. According to a report in Financial Times, WBD has been approached by “a number of potential buyers” for its legacy assets should the Netflix deal be consummated. One such buyer, FT reports, is New York-based hedge fund Standard General.

Soo Kim, the founder of Standard General, “has been in talks over potentially buying or investing in the WBD television networks,” the report reads. Standard General has a history of taking on “distressed debt deals” having taken stakes in declining companies like RadioShack in the past.

The hedge fund also has a history of television network deals, having rolled up a series of smaller local broadcast network groups before eventually selling them to Nexstar. In 2022, Standard General announced a $9 billion deal to purchase a major local broadcast group, Tegna, but the deal was terminated in 2023 after facing regulatory scrutiny.

Any discussions about a sale of WBD’s cable assets are clearly still in the early stages, and there are apparently multiple other suitors that have yet been reported. However, the interest WBD is receiving in these assets cuts right at the heart of Paramount’s argument that Discovery Global would be worth very little independent of major corporate backing. It seems there’s a healthy level of interest for the networks, albeit from at least one lesser-known suitor.