Why Paramount is now saying the TV networks it wants to buy from WBD are worth $0.00 per share
Business Insider·2026-01-08 16:02

Core Viewpoint - Paramount Skydance has valued Warner Bros. Discovery's (WBD) cable networks at $0.00 per share, factoring in expected debt and costs, which positions its $30-per-share offer more favorably compared to Netflix's $27.75 bid for streaming and studio assets only [1][2]. Valuation Comparisons - Paramount acknowledged a "theoretical possibility" that WBD's cable assets could trade at up to ~$0.50 per share, making its offer appear more attractive [2]. - The lower valuation of Discovery Global enhances the appeal of Paramount's proposal, with previous assessments being more optimistic [3]. - In past communications, Paramount had floated a $1-per-share value and later suggested a $1.40 valuation based on Wall Street consensus regarding Versant, a new cable TV company [4]. Market Performance Impact - Paramount's recent analysis reflects the poor stock performance of Versant, which has lost over 25% of its value since trading began, contributing to a more pessimistic outlook for WBD's networks [5]. - A Business Insider analysis indicated that WBD's networks could be valued at approximately $1.20 per share based on Versant's valuation [5]. Asset Comparison - Media analysts have drawn comparisons between Versant and WBD's cable networks due to similarities in asset mixes, with Versant owning CNBC and live sports rights, while WBD has networks like CNN and TNT [6]. - WBD has countered these comparisons, asserting that its cable assets have greater scale, profitability, and a stronger international presence [7]. Strategic Positioning - Analysts argue that WBD's cable assets are more valuable than Paramount suggests, with the WBD Board confident in generating significantly higher value through a strategic review process [8]. - Paramount is attempting to persuade WBD shareholders that its all-cash offer presents more financial security compared to WBD's arrangement with Netflix, supported by a $40.4 billion equity backstop from Larry Ellison [9].