Warner Bros. Discovery’s fate hinges on the value of its beleaguered cable empire, but are CNN and the broader cable networks really worth just a buck a share?
The focus is squarely on HBO, the studio ecosystem, the Warner Bros. film vault, and DC Comics. Yet the company’s future may rest on how investors value its cable TV portfolio, dubbed the “CrapCo” lineup by some critics. Discovery Global Networks, the division that includes CNN, Food Network, TNT, and about two dozen other networks and digital brands, has long been the punching bag of media observers. Cable assets still generate cash, but they are tightening assets—troublesome for a company whose Hollywood arm is growing faster and healthier.
Paramount’s aggressive, $108 billion cash bid for Warner Bros. Discovery values the networks division at roughly $1 per share. That figure stands in contrast to more optimistic appraisals, including analysts who see greater potential. Bank of America’s Jessica Reif Ehrlich, a longstanding WBD bull, believes the global networks could be worth as much as $5 a share. Netflix’s approach aligns with the prevailing view that the cable networks could be valued between $2 and $4 per share once spun off from the rest of WBD.
Meanwhile, Netflix’s deal to acquire WBD’s studios and streaming assets totals $82.7 billion and was announced recently. The spun-off, publicly traded cable company, tentatively called Discovery Global, is expected to debut in the third quarter of 2026. Paramount rejected the offer and publicly launched its hostile bid on a recent Monday. Under current terms, Netflix’s cash-and-stock bid equates to $27.75 per share, while Paramount’s offer sits at about $30 per share in cash. Thus, the ultimate value of the cable assets—and whether they serve to bridge the gap between the two sides—becomes pivotal.
The planned spinoff has been in the works for about a year. In response to investor fatigue with cable, media companies have reorganized. WBD split Global Networks from Studios and Streaming at the end of 2024 in preparation for a potential separation. Comcast is spinning off most of NBCUniversal’s networks into a stand-alone Versant, set to launch in January. Disney has floated the possibility of divesting networks, though it remains in a joint venture with Hearst via A+E Global Media. Lionsgate split Starz from the studio this year, while Disney and Fox have embraced streaming services that still carry top networks’ linear feeds as a hedge against ongoing cord-cutting.
Despite ongoing erosion, cable networks remain cash generators in 2025, even as total households have fallen below 70 million from a peak above 100 million in 2012. Analysts expect Discovery Global’s EBITDA to drop by more than 20% in 2026, underscoring the pressure on traditional networks. Still, some executives argue that the brands cultivated during cable’s heyday can still fuel other ventures in digital and streaming, helping offset a portion of the linear decline. News and sports, in particular, are cited as durable assets that keep these networks relevant.
Robert Fishman of MoffettNathanson notes that the value of Global Networks is a central question, largely driven by post-separation net debt levels. He suggests Paramount’s $1-per-share target indicates a belief that Netflix has chosen the wrong partner. He adds that valuing such a business is inherently tricky given the uncertain future of linear networks amid cord-cutting, even if there are early signs of revival.
Global Networks faces a challenging path ahead, but it benefits from a strong portfolio, notably strengthened by Discovery’s 2018 merger with Scripps Networks (Food Network and HGTV). In 2024, the division posted revenue of about $20.2 billion, down 5% from the previous year. Recent quarters have seen ratings declines, and the loss of NBA coverage after four decades is expected to affect upcoming quarters, especially during the playoffs season that previously boosted network ratings.
Analysts from Guggenheim suggest that broader network scale could support the broader WBD value, noting that the Netflix and potential split scenarios place the stock at a delicate inflection point. Their estimate for Global Networks places value between $2.50 and $3.50 per share, making Netflix’s bid of $27.75 per share appear modestly elevated relative to Paramount’s cash offer near $30.
Both acquisition paths require regulatory approval, with the U.S. Department of Justice overseeing the process. Paramount’s David Ellison has argued that his group offers the clearest path to green light, highlighting the potential for long-term value creation and a robust creative ecosystem.
Netflix’s Ted Sarandos and Greg Peters have expressed strong confidence in their deal, emphasizing benefits to shareholders and workers in the industry and signaling optimism about securing approval.
In a twist, former President Trump has injected his own angle by suggesting CNN should have new ownership and leadership, regardless of which bidder ultimately prevails. The political maneuvering adds another layer of complexity to a deal that already involves multiple high-stakes players and intertwined interests. Paramount’s investor cadre includes Affinity Partners, Jared Kushner’s investment firm, while Larry Ellison is a notable backer on the opposing side.
Paramount is urging WBD shareholders to tender their shares by January 8, with a later extension possible. WBD has a Dec. 22 deadline to respond to Paramount’s hostile offer.
Would you side with Paramount’s push for a quick, decisive reorganization or support Netflix’s broader, studio-backed strategy? Do you think the cable networks can still play a pivotal role in a future dominated by streaming, or are they destined to become a legacy asset that funds more promising ventures? Share your thoughts in the comments about the best path forward for Warner Bros. Discovery and its diverse holdings.
