CNN Is the Biggest Loser in Netflix–Warner Bros. Deal, Now Faces Uncertain Future

Netflix announced Friday that it has reached an agreement to acquire Warner Bros. and HBO from Warner Bros. Discovery (WBD) for $72 billion plus debt. Despite the confusion, the deal does not include WBD’s cable networks, CNN, TNT, and TBS, or its live sports portfolio.

Pending regulatory approval from the Trump administration, the acquisition would give Netflix control of Warner Bros.’ legacy film and television studio operations as well as the HBO Max streaming platform.

Under the proposed terms, CNN and WBD’s other cable networks will fall under a new company to be formed within Discovery Global. 

However, this division — focused solely on the traditional cable model — will likely operate under tighter budgets and with limited long-term investment. For background, Wall Street has increasingly devalued media conglomerates that combine streaming and traditional cable assets. 

In a similar move, NBCUniversal is currently spinning off its own struggling cable news operation, MSNBC (rebranded "MS Now"), into a new entity called Versant.

Thus, WBD could look to pursue a separate sale of its cable channels. Paramount Global, which previously submitted a competing bid for the full WBD portfolio, could be a buyer.

That said, talks between Paramount and WBD turned contentious this week, as Paramount accused WBD of favoring Netflix during the bidding process. In a letter to WBD CEO David Zaslav, Paramount wrote:

"It has become increasingly clear, through media reporting and otherwise, that WBD appears to have abandoned the semblance and reality of a fair transaction process, thereby abdicating its duties to stockholders, and embarked on a myopic process with a predetermined outcome that favors a single bidder. We specifically request and expect this letter will be shared and discussed with the full board of directors of WBD."

CNN’s Uncertain Future

A key question emerging from the deal is what happens to CNN once it’s separated from HBO and the Warner Bros. studio. There is a reason Netflix showed no interest in the longest-running cable news network.

CNN has lost an estimated $400 million over the past three years and continues to struggle with declining ratings and relevance compared to industry leader Fox News.

In addition to its high production costs, the network has faced an ongoing identity crisis since Jeff Zucker resigned as network president in February 2022, following his undisclosed relationship with a colleague. Two leadership changes later, CNN remains stuck between a toned-down partisan outlet and a legacy journalism brand that has lost public trust.

High-profile missteps, such as anchor Jake Tapper’s recent on-air misidentification of the alleged January 6 pipe bomber, have only deepened credibility concerns:

Why does that keep happening? And why is it always CNN doing it?

Today, no CNN program consistently ranks among the top 25 most-watched cable news shows. Aside from conservative commentator Scott Jennings, who is reportedly in discussions with CBS News’ Bari Weiss, few CNN personalities wield much of any political or cultural influence.

Given its financial and reputational challenges, Discovery Global will likely either operate CNN on a substantially reduced budget or seek to sell the network to a cable competitor. 

Either way, the CNN we know today doesn’t appear to be a viable business model.