CNN's Ownership Future Uncertain Amid Competing Netflix and Paramount Bids

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CNN's Future Ownership Amid Competing Bids

The future ownership of CNN and its parent company, Warner Bros. Discovery, is subject to ongoing corporate maneuvers and competing acquisition bids. The situation involves proposals from Netflix and Paramount Global, with scrutiny from political figures and concerns regarding financing.

Netflix Proposal

Netflix recently reached an agreement to acquire the movie studios, archives, intellectual property, and streaming services of Warner Bros. Discovery. Under this proposed deal, CNN and its associated cable channels would be separated into an independent company. CNN executives, including Chairman and CEO Mark Thompson, communicated to staff that this arrangement would support the network's digital transition strategy. However, the plan would leave CNN vulnerable to other potential purchasers as a standalone entity.

Paramount Global's Acquisition Efforts

Warner Bros. Discovery CEO David Zaslav initiated a process to split the company. David Ellison, supported by his father Larry Ellison, subsequently made an unsolicited bid for the entire company. After initial rejection, the company was put up for auction.

David Ellison, who leads Skydance and is also at the helm of Paramount Global (which includes CBS and Paramount Studios), has pursued the acquisition of Warner Bros. Discovery. Developments at Paramount Global under Ellison's leadership include:

  • A $16 million settlement by Paramount's prior ownership related to a lawsuit filed by Donald Trump against CBS's "60 Minutes."
  • The announcement of the conclusion of Stephen Colbert's late-night show.
  • The Federal Communications Commission approved the Ellisons' takeover of Paramount, a requirement due to the company's ownership of 28 local television stations.
  • Appointments at CBS News, including Kenneth Weinstein (former head of a conservative think tank) as ombudsman and Bari Weiss (founder of Free Press) as editor-in-chief. Additionally, Diversity, Equity, and Inclusion (DEI) initiatives at the network were discontinued.

Former President Donald Trump publicly commented on CNN's leadership, stating on Wednesday that he considered them a "disgrace" and that the network's sale was "imperative." He also addressed a CNN reporter, stating, "You know you work for the Democrats, don't you? You're basically an arm of the Democrat party." These comments were reported on CNN and discussed by current and former CNN personnel.

Regulatory and Financing Aspects

David Ellison has indicated that his family's relationship with former President Trump could facilitate regulatory approval for Paramount's bid. Larry Ellison previously received a stake in the U.S. version of TikTok through arrangements made by Trump.

The financing for Paramount's bid involves several investment partners:

  • The Public Investment Fund of Saudi Arabia, controlled by Crown Prince Mohammad bin Salman. The Office of the Director of National Intelligence previously concluded that Prince Mohammad approved an operation to capture or kill Jamal Khashoggi in 2018.
  • L'imad Holding Co. PJSC of Abu Dhabi.
  • The Qatar Investment Authority.
  • Affinity Partners, a U.S. investment fund controlled by Jared Kushner, former President Trump's son-in-law and White House adviser.

Paramount's securities filing stated that these investment partners agreed to not seek seats on the board of directors. Concerns were raised by some CNN staffers and a finance professor regarding the potential influence of these investors on media framing and news content.

Senator Elizabeth Warren (D-MA) voiced concerns regarding media consolidation relating to both Netflix and Paramount's bids. She suggested that such large mergers could negatively impact workers through reduced job opportunities and consumers through increased prices.

Ongoing Uncertainty

Paramount's current offer to acquire Warner Bros. Discovery remains valid through January 8th, though extensions are possible. Netflix co-chief Ted Sarandos stated to investors that he anticipates a renewed bid from Paramount but expects Netflix's deal to proceed as planned. The auction process is ongoing, and the ultimate ownership and control of CNN remain undetermined.