In less than nine months—on April 8, 2024, to be exact—the tax statute prohibiting David Zaslav from offloading Warner Bros. Discovery assets will be lifted and he will be free, should he and his board so desire, to pursue a sale of CNN—a move that seems increasingly likely in light of Warner Bros. Discovery’s $45-billion net debt load; the downward trajectory of the news network’s revenues; the immense headaches it seems to create for its owners; and the general understanding, articulated most recently and brazenly by Bob Iger in Sun Valley, that declining linear assets are no longer core to large media businesses in this everything-is-on-the-table era.
And there is an added incentive, too, sui generis to CNN. If you believe—as most high-level media insiders do—that Zaslav is ultimately positioning WBD for a homecoming tie-up with NBCUniversal, it might make sense to offload CNN rather than attempt to integrate it with the NBC News Group, which would trigger all kinds of F.T.C. headaches, all of which could be deftly avoided by a strategic it’s-not-you, it’s me transaction.
There is a counter-thesis, to be sure, one a WBD executive might use to dissuade such speculation, and I hear it aplenty: In the war for streaming subscribers, news (like sports) can be a key differentiator for the Max streaming service; a sale isn’t necessary because WBD is deleveraging and the debt is relatively cheap; and, of course, CNN is a reputational asset. As for any putative NBC deal, that’s irrelevant, they say, because Warner Bros. Discovery is being built, as their P.R. team has put it, “for the long term.” That’s all well and good, but CNN’s declining ratings are now indicating that news is becoming a commodity, not a differentiator. (Donald Trump town halls aren’t quite the College Football Playoff games.) And, yes, it is a reputational asset—which might be an ultimate argument to sell it at a premium.