Warner Bros Discovery’s fate hangs on how much value investors place on its beleaguered cable networks. The crown jewels—HBO, the studios, Warner Bros. film vault, and DC Comics—are significant, yet Wall Street’s focus is increasingly on the company’s Global Networks division, which houses CNN, Food Network, TNT, and dozens of other brands. This division has long been derided as “CrapCo,” a harsh jab reflecting cable’s shrinking role as cord-cutting accelerates. While these networks still generate cash, they are shrinking assets being separated from Hollywood’s faster-growing, higher-potential businesses.
Paramount recently offered a hostile bid valuing the networks at roughly $1 per Warner Bros Discovery share, citing the sector’s decline. That price appears overly optimistic about Paramount’s own distressed portfolio (MTV and Nickelodeon) and is notably lower than some analysts’ expectations. In contrast, several Wall Street observers see more value. Bank of America’s Jessica Reif Ehrlich, a longtime WBD bull, estimates the Global Networks could fetch as much as $5 a share. Netflix’s bid approach aligns with the broader view that the cable networks, once spun off, could be worth between $2 and $4 per share.
Netflix is purchasing the studios and streaming assets in an $82.7 billion deal announced recently. The spin-off of a newly public cable company branded Discovery Global is anticipated in Q3 2026. Paramount rejected the deal but has pressed forward with its own hostile approach. Netflix’s bid translates to about $27.75 per share for the current arrangement, while Paramount’s cash bid sits around $30 per share. The ultimate value of the cable assets—and whether they bridge the gap between Netflix’s interests and Paramount’s ambitions—will be decisive.
The spin-off had been in the works for a year. Investors remain wary of traditional cable assets, prompting media groups to reorganize. WBD split Global Networks from Studios and Streaming at the end of 2024, and Comcast is spinning off most NBCUniversal networks into a standalone entity, Versant, set to rise in January. Disney has flirted with cutting networks loose but has paused, while its co-venture with Hearst in A+E Global Media explores potential strategic moves. Lionsgate’s Starz separated earlier this year, signaling a broader industry shift. Despite ongoing cord-cutting, cable networks still generate substantial cash. In December, signs emerged that the pay-TV bundle might be stabilizing after years of erosion, though overall households have fallen from a peak above 100 million in 2012 to under 70 million today. Analysts expect Global Networks’ EBITDA to drop by more than 20% in 2026.
One veteran media executive argues that the iconic cable brands can still power growth in digital and streaming, especially through news and sports content that remains relevant even as ad-supported linear TV declines. While some investors overlook the upside, these networks aren’t disappearing entirely.
MoffettNathanson’s Robert Fishman notes that the true value of Global Networks hinges on net debt remaining after separation. He suggests Paramount’s $1 per share figure implies WBD chose the wrong partner in Netflix, while acknowledging that valuing linear networks amid cord-cutting is inherently tricky—even if there are early signs of life in the category.
Global Networks faces a challenging path, yet it benefits from a strong portfolio, including the 2018 consolidation of Food Network and HGTV under Discovery. In 2024, the division posted $20.2 billion in revenue, down 5% year over year. Third-quarter ratings dropped 26%, and the absence of NBA games—after four decades—will be felt in the coming months, particularly in the next quarter’s playoff window.
Analysts like Guggenheim’s Michael Morris see potential upside from scale and synergy, arguing that the value of Global Networks could lie in a range that places Netflix’s $27.75 bid slightly above Paramount’s offer when considering a broader market view. Both the Netflix deal and Paramount’s bid require regulatory approval, with the Department of Justice overseeing the process. Paramount’s leadership asserts it offers the clearest path to approval and long-term value for shareholders.
Netflix executives expressed confidence this week that their deal will prevail, highlighting benefits for shareholders and the broader entertainment workforce. In the political arena, former President Trump weighed in, suggesting CNN should have new owners and leadership regardless of the WBD outcome, though the political and regulatory path remains uncertain. Paramount’s investor group includes Kushner-backed Affinity Partners, while David Ellison’s Skydance has ties to Paramount through past collaborations. Ellison’s father, Larry Ellison, is a notable Trump supporter.
Paramount is actively courting WBD shareholders to tender their stock by an early January deadline, with the process potentially extending. Warner Bros Discovery must respond to Paramount’s hostile bid by December 22, though a quicker reply is possible.
Would you side with Netflix’s vision of a combined, profitable studios-and-streaming future, or with Paramount’s strategy of leveraging broader network scale and a standalone cable entity? What factors should investors prioritize when valuing a company navigating the shifting sands of cable, streaming, and content creation?
