Warner Discovery's board keeps fighting to keep its cable channels. One has to wonder why, especially in the case of its news channel.
WBD has two offers on the table. It prefers the partial buyout from Netflix and Ted Sarandos, which would see WBD shed its studio and streaming assets while holding onto its cable channels, which include popular brands like Discovery and HGTV but also CNN. The other bid, a hostile buy-out from Paramount-Skydance and David Ellison, would acquire all assets and force WBD out entirely.
The WBD board has warned shareholders to stick with the Netflix bid and to reject Paramount by arguing that the cable-focused new company left after the Netflix split would bring steady value. However, their expensive news channel has lost two-thirds of its viewership over the past ten years, the Daily Mail reported yesterday, and "circling the drain" seems more likely than a revival:
The decrease, from roughly 1.3 million in 2016 to 553,000 now, is fueling rumors of a possible network sale - something CNN's up-for-grabs parent company has vehemently denied.
The results recorded this month by Nielsen are actually an improvement from January, when stars like Jake Tapper, Anderson Cooper, Erin Burnett, and Kaitlan Collins only secured 488,000 sets of eyes.
The network's daytime lineup has seen a similar decline as hosts such as Wolf Blitzer failed to move the needle, dropping from 752,000 to 433,000.
When compared to the same part of the year in 2021, the drops were even more pronounced - 71 percent for primetime and 73 percent during the day.
One CNN exec blamed news consumers for changing habits and choosing "alternative means" to keep up with the news. Another competing exec scoffed at that explanation, noting that other networks haven't lost anywhere near that level of viewership. That certainly applies to Fox News, which has dominated cable news for years. In December, they celebrated the best ratings ever in a non-election year, averaging 1.7 million viewers a day. CNN isn't even drawing a third of that amount, and now they're trailing M-SNOW too:
Fox News averaged 1.7 million total day viewers to lead all basic cable, while No. 2 ESPN averaged only 775,000. MS NOW (formerly MSNBC) managed 552,000 total day viewers and CNN settled for 436,000 as the cable news competitors failed to outdraw Fox News combined.
During the primetime hours of 8-11 p.m., Fox News averaged a staggering 2.7 million viewers to win atop the cable landscape. ESPN finished second with 2 million, MS NOW came in third with 923,000 and TNT finished fourth with an average primetime audience of 778,000. CNN delivered only 580,000 average viewers during primetime, finishing behind HGTV and TBS to finish seventh.
We don't need to debate what happened to CNN's viewership. We all know what happened. They followed the same trajectory as the Washington Post, which spent several years destroying its credibility as a news organization by transforming itself into the Pravda of La Résistance. CNN has the same editorial policy, only with less wit.
The more interesting question is what WBD intends to do with CNN, especially in the context of their sale position. The Daily Mail reports that the board may consider shedding CNN, either separately or within one of the two bids, but Netflix doesn't appear interested in taking on a crumbling news channel that is already lagging behind TBS and HGTV in a market that Fox dominates. Paramount does want it, along with the other cable channels, and has offered a sweetener this week to push WBD – or at least the shareholders – into choosing a total buyout:
“The additional benefits of our superior $30 per share, all-cash offer clearly underscore our strong and unwavering commitment to delivering the full value WBD shareholders deserve for their investment,” said Paramount CEO David Ellison in a statement. “We are making meaningful enhancements – backing this offer with billions of dollars, providing shareholders with certainty in value, a clear regulatory path, and protection against market volatility.”
The “ticking fee” is payable to WBD shareholders for any potential delays in receiving regulatory approval for a Paramount-WBD tie-up.
Paramount has set the fee at 25 cents per share, per quarter that the transaction hasn’t closed after year-end 2026, “underscoring Paramount’s confidence in the speed and certainty of regulatory approval for its transaction,” the company said.
The so-called ticking fee is equivalent to roughly $650 million in cash value each quarter for every quarter the deal is not closed past Dec. 31.
In its zeal to remain in the cable-channel business, WBD has told its shareholders that Ellison can't close the deal he's offering. The ticking fee may go a long way toward easing those fears. And by this time, the shareholders have to look at CNN's performance and wonder what value the new cable-channel company would have, and why they should gamble on it.
One also has to wonder why Paramount would want CNN. The chance to combine assets with CBS News and give that broadcast network a cable channel with massive clearance may look promising to Ellison, especially with Bari Weiss cleaning house at CBS News already. The ratings crash may not scare Ellison away, given that much of the investment a renaissance would require is already in place at CBS. And perhaps WBD's board should consider whether anyone else would have the resources to make CNN worth anything in a sale.
Editor's note: If we thought our job in pushing back against the Academia/media/Democrat censorship complex was over with the election, think again. This is going to be a long fight.
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