Paramount Skydance has positioned itself as the leading contender in the acquisition of Warner Bros. Discovery (WBD), which is valued at approximately US$70 billion (about A$105 billion). This emerging front-runner is particularly interested in CNN, a key asset that analysts believe gives it a competitive edge over Comcast and Netflix. The bidding war officially commenced on Thursday at noon, with all three companies submitting proposals for WBD, which owns a top Hollywood studio, the third-largest streaming service HBO, and CNN.
In a notable development, CNN is seen as a crucial component for Paramount Skydance’s bid. The company is owned by technology magnate Larry Ellison and his son, Hollywood executive David Ellison. They reportedly view CNN as a valuable asset worth preserving, despite its recent challenges. This perspective sets them apart, as they appear to be the only bidders interested in acquiring the cable-news network as part of the larger deal.
The Ellisons’ bid is expected to sail through the regulatory review process under the Trump administration, while Comcast and Netflix may encounter substantial scrutiny. A telecommunications lawyer who formerly served in government remarked, “The Ellisons will get the white-glove treatment and an easy six months before approval. Brian Roberts gets a proctology exam that could last two years. Same with Netflix. The Warner board might just say it’s not worth the wait.”
Political dynamics further complicate the bidding landscape. Reports indicate that former President Donald Trump wishes to see CNN “neutralised” due to its confrontational coverage of his administration. Larry Ellison, a noted Trump donor and co-founder of Oracle, is viewed as a potential vehicle for reforming CNN’s editorial direction. If Paramount Skydance secures the acquisition, sources suggest that Bari Weiss, a columnist known for her right-leaning views, may expand her oversight from CBS news programming to include CNN.
Despite the political implications, the Ellisons recognize CNN’s fundamental business strengths. The network generates an estimated US$500 million (around A$750 million) in annual profits, although it has faced declining linear TV viewership and lower ratings compared to competitors like Fox News. CNN maintains a significant global presence, with reporters stationed in nearly every country and a footprint in airports and hotels. Paramount Skydance believes that by integrating CNN with CBS’s news infrastructure, the network could enhance its profitability while shifting focus to digital platforms away from traditional cable.
WBD’s CEO David Zaslav has expressed a desire for a deal starting with a valuation of US$30 per share (approximately A$45), amounting to the full valuation of US$70 billion. However, media insiders express skepticism about this figure being realized. Neither Comcast nor Netflix is likely to match that price, as they are interested in acquiring specific segments of WBD rather than the entire company. Selling off portions could trigger tax complications typical in mergers and acquisitions, which may negatively impact overall valuation.
The Ellisons are reportedly confident they can acquire WBD for no more than US$27 per share (approximately A$40.50), which is significantly below Zaslav’s target. Comcast is also strategizing to mitigate antitrust concerns by planning to spin off MSNBC. However, if Comcast wins the bid, it is anticipated that Trump’s antitrust chief, Gail Slater, would initiate legal action focusing on the merger of Universal Studios with Warner Bros., potentially leading to extensive legal disputes lasting nearly two years.
Netflix faces similar challenges if it attempts to merge its leading streaming service with WBD’s third-ranked service. Leadership at Netflix, including Reed Hastings and Ted Sarandos, has long supported progressive causes, which could create political challenges in the acquisition process.
As the bidding war unfolds, the outcome will likely have significant implications for the media landscape, particularly in how major news outlets like CNN are positioned in a rapidly changing digital environment.
