As the blockbuster acquisition battle over Warner Bros. Discovery (WBD) takes an unexpected turn, the fate of CNN, a WBD asset, is being tested. Analysts say CNN has rapidly emerged as a crucial lever that could determine the outcome of the transaction, caught between Netflix, which says it will exclude CNN from the target to avoid political risk, and Paramount, which says it will acquire CNN and change its editorial stance.
According to the Financial Times (FT) in the U.K. on the 9th (local time), when Netflix closed a deal on the 5th to acquire WBD's streaming and studio institutional sectors for $83 billion (about 114 trillion won), relief reportedly spread inside CNN. That is because Netflix excluded CNN from the acquisition target to avoid political risk. With this decision, the possibility of CNN merging with CBS News under Paramount, one of the bidder candidates, disappeared. CNN employees said it was "a far better choice than a merger with CBS."
But the situation changed when Paramount jumped back into the fray on the 7th with a hostile bid worth $108 billion (about 149 trillion won) for WBD. As Paramount's largest shareholder Larry Ellison, his son David Ellison, and Bari Weiss, who leads the conservative-leaning outlet "Free Press," stepped into the race, CNN, known for its distinctly left-leaning stance, instead became an appealing "political asset." Paramount sees CNN's editorial stance as an opportunity and is said to have conveyed to the Trump administration the message that it "can make CNN a more balanced news organization." President Trump and CNN are political archrivals: CNN has criticized President Trump at every turn, while Trump has denounced CNN as "fake news."
President Trump also sent a signal that he would get involved in the bidding war. He recently praised Netflix's Ted Sarandos as "a great person" and said he would take part in discussions over approval. At the same time, he kept up criticism of CNN anchors, pushing the CNN issue to the center of the acquisition battle.
If Paramount succeeds in the acquisition, the possibility of integrating CBS News and CNN would resurface. Combining the two organizations would offer advantages such as expense savings and a larger global audience, but inside CNN there are deep concerns about a political shift. After acquiring Free Press last year, Paramount placed founder Bari Weiss in key posts at CBS News and has been recalibrating its coverage. As a result, anxiety is growing within CNN that "editorial independence could be shaken."
Conversely, if the Netflix proposal stands, CNN would be spun off along with WBD's cable networks into a separately listed company called "Discovery Global." With cable ratings declining, CNN would have to craft its own strategy, and a potential standalone sale is also being discussed. Some media industry mergers and acquisitions (M&A) advisors predicted that "CNN will remain a constant acquisition target."
Mark Thompson, CNN's chief executive officer (CEO), told employees that "the Netflix deal gives CNN an opportunity to continue its digital transformation strategy," but uncertainty is more likely to persist into next year as Paramount counters Netflix's acquisition bid. WBD executives also assessed that "it was the best opportunity for CNN to find its own path, but market conditions remain tough."