Perhaps the oddest thing about the modern media world is that the destiny of a prestige brand like HBO — home to some of the most lauded shows in television history — could now rest on how little another iconic brand can be sold for. As Warner Bros. And while Discovery is the one now being swayed on all sides by investors, lenders and potential buyers, CNN’s falling price tag is shaping up as a shady hinge to determine what happens to HBO in train.
It sounds backwards. HBO is the crown jewel, the golden franchise, the asset every studio or tech giant would love to control. CNN, however, has been fighting for its life for years — falling ratings, decelerating cable revenue growth, teetering trust and a business model caught between the broadcast era’s decline and the streaming age’s disorder. But in the finances of a company that you’re trying to sell, are going out of business, are merging into or reorganizing we’ll spare you the gory details; they’re not pretty — it’s rarely what seems on its face to be the strongest asset that dictates your future. It’s the weakest one.
CNN used to be a multibillion-dollar jewel. Now, insiders say that it is worth a fraction of what it once was. And it matters because the lower its valuation drops, the more difficult becomes Warner Bros. Discovery to arrange a transaction that removes CNN from HBO without tearing apart the company’s financial math. Buyers want HBO. They don’t necessarily want CNN. They don’t want its cable headaches, its political baggage, or its messy newsroom culture. Inside the company, there’s a fear that if CNN is too cheap, bundling it with HBO is not feasible and breaking it off financially makes no sense.
Here’s where the story gets painful. Many of those whisperings inside media world backrooms aren’t about creative vision, or brand strategy — they’re about debt. Warner Bros. Discovery is heavily laden and lenders want clarity. If a buyer wants HBO, the company must figure out what to do with everything else that comes along with it. And investors know that if CNN continues to lose value, the company might not have as much leverage to package it neatly.
The irony is painful. HBO is in one of it’s most creative empowered states. Huge shows, worldwide hits, a steady drumbeat of cultural buzz. CNN, by contrast, is mired in the identity crisis that has plagued it since Trump left office. Without the urgency of breaking-news cycles, and without a reliable brand direction, its value keeps falling. And each stumble in valuation makes it harder to chart HBO’s future.
People familiar with the discussions say there are three potentially different outcomes. One is that Warner Bros. Discovery seeks to unload HBO and CNN separately — easy, right? — until that demand seems increasingly wishful because CNN’s struggling could make for an ugly balance sheet. The second is bundling them anyway, by making a buyer take both even if he wants only one. A third is the one executives hate most: doing nothing, waiting for the value of CNN to stabilize and risk cooler market heat from HBO before you can actually execute a deal.
And that’s the big tension inside the company right now. HBO is hot. CNN is not. HBO is an asset in demand. CNN is an asset executives want in their arsenal and hope they don’t get backed into a corner where it’s more useful to someone else. During the traditional cable era, distribution lashed the brands together. In the streaming era, they are connected by debt.
Even more perplexing is the extent to which Wall Street has contributed to it. To investors, the magic doesn’t matter the way audiences care about it. They value stability. Forecastable revenue. Low risk. CNN used to offer that. Now HBO does. And if a company is going to buy only HBO, someone needs to plan what stays behind. The lower CNN goes, the more burden there is on HBO to be able to adequately “carry” it in any strategy.
It’s why the future of HBO is now so entwined with that of a network whose politics and sense of itself feel stuck in another decade. One brand is the future. The other is the past. But they’re in the same financial bucket, and as long as that’s the case, one strong brand can’t run away while the other is falling behind.
Inside Warner Bros. Discovery, people know this. They also understand that HBO is too valuable to squander time with. It would be fought over by streamers. The library would make tech giants drool. If allowed, private equity would bid rats’-balls high. The appetite is real. But taste won’t help if the numbers don’t work.
And so, at the same time that everybody’s watching to see what HBO does next, their real drama is happening in conference rooms and spreadsheets — where the question isn’t “can HBO expand?” but “Can CNN get smaller without imploding the entire plan?” The response to that question could end up shaping who owns HBO in the next chapter of modern entertainment.
In a media culture focused on winners, the failing brand — not the booming brand — may yet be the one to write the ending.
