After Donald Trump’s reelection, David Zaslav expressed hope a Republican administration would smooth the way for industry consolidation. As the Warner Bros. Discovery chief goes the opposite way by splitting up his company, he might face a thornier issue — namely, why anyone would want to buy CNN, or another major mainstream news outlet, with the press-hostile president in the White House.
Although CNN has long been one of Trump’s favorite punching bags, it’s hardly alone in that regard, or even in the scenario of spinning off a news channel with other cable networks. MSNBC faces the same issue as part of Versant, nee SpinCo, as Comcast moved first to shed cable holdings seen as declining assets as linear TV sinks into the media sunset.
All of which raises the question, as these companies scout future deals and corporate alliances, who wants to take the risk — and tackle the headaches — associated with owning news?
The promise of such dealmaking has taken on a significant degree of difficulty at the current political moment, with Trump and his handpicked Federal Communications Commission chairman, Brendan Carr, having overtly made clear they can make life unpleasant for companies with news operations if the coverage from those sources displeases the president.
For his part, Trump has argued, bizarrely, that MSNBC and CNN’s negative coverage of him should be “illegal,” while Carr has brandished about the vague term of “news distortion,” while threatening to hold up merger and acquisition efforts for companies that run afoul of what he sees as FCC guidelines.
As one veteran cable executive said on condition of anonymity, based on the Trump administration’s track record, it’s “impossible not to believe that any M&A activity involving these companies won’t involve regulatory roadblocks intended to impede, delay or extract some consideration for approval.”
If potential owners of CNN and MSNBC want a preview of what that might entail, they don’t need to look very far. Paramount Global, after all, is in the midst of extremely uncomfortable uncertainty over the future of its planned merger with Skydance Media because of Trump’s lawsuit against “60 Minutes.” Carr has denied that the two are related, but as FCC commissioner Anna M. Gomez recently stated, Carr appears to be using threats and “sham investigations” as a means of “weaponizing” the commission to advance the president’s interests.
What has been demonstrated, time and again, is big media and tech players have points of vulnerability that the Trump administration can exploit by using that leverage — as well as Trump’s social media megaphone — in unprecedented fashion. Those companies have already engaged in both capitulation to Trump and acts of self-censorship, including the Daily Beast report last month that Disney CEO Bob Iger asked the hosts of “The View” to tone down their political rhetoric over regulatory concerns.
Beyond that, CEOs who don’t normally covet the spotlight have found themselves in Trump’s crosshairs as he lashes out at their news operations. In August, Trump went after Comcast CEO Brian Roberts, calling him a “lowlife” while suggesting the company should be ““forced to pay vast sums of money for the damage they’ve done to our Country” — “Our country,” in this case, seemingly translating pretty directly to “My ego.”
For companies like Disney and Comcast, whose concerns run the gamut from movie studios to theme parks, controversies related to ABC News and NBC News, respectively, can easily seem like rust carbuncles on a cruise ship. When push comes to shove, defending the integrity of those operations hasn’t always been a top priority, and at the very least, the prevailing mentality is to make problems go away as quickly as possible.
Over the weekend, that included ABC suspending newsman Terry Moran for a since-deleted tweet in which he referred to Trump official Stephen Miller, one of the prime movers behind Trump’s deportation policies, as a “world-class hater.” Moran picked a questionable way and venue to register that observation, although as many Trump critics noted, there’s evidence supporting the substance of what he said.
Nevertheless, Moran’s tweet felt like an unforced error — prompting ABC to announce Tuesday that it was not renewing his contract — by handing ammunition to Trump and supporters eager to level charges of media bias. If there’s been one recurring thread of this second Trump administration, it’s the realization that for even major companies and hallowed institutions, some fights simply aren’t deemed worth the effort.
Since Versant and the WBD cable entity represent obvious M&A targets — setting aside the issue of who might want to buy declining assets — a separate question becomes who’s willing to take on those concerns.
WBD networks like TNT, TBS, TruTV, and Cartoon Network all have their challenges, but they’re unlikely to produce late-night all-caps tweet-storms from the President of the United States, just as MSNBC occupies a different niche than Versant siblings USA, Syfy, Oxygen, E!, and The Golf Channel.
Although some analysts have already speculated about a possible combination of Versant and WBD’s cable spinoff — with Bank of America research analyst Jessica Reif Ehrlich calling the creation of a cable-network giant “logical” — such a deal would at least initially put MSNBC and CNN under the same umbrella.
Of course, there are other problems, starting with the wisdom of trying to save a shrinking business through consolidation. And whatever economies of scale might be achieved, between regulatory issues and the punitive actions and threats from Trump’s FCC, such an arrangement would likely unleash an assortment of challenges, great and small.
Nor is there much hope of White Knights emerging to rescue one of these news entities; indeed, as seen with the beleaguered Washington Post and Los Angeles Times, the dream of benevolent billionaires supporting “news” out of a sense of civic obligation has turned sour, with those papers’ owners bending the knee to Trump as they pursue their own business agendas.
Where news divisions once carried the patina of prestige — providing an opportunity for media owners rub elbows with such esteemed figures as Barbara Walters or Walter Cronkite, a dynamic that went beyond balance-sheet considerations — they currently look like potential albatrosses in the context of corporate dealmaking.
Although CNN’s revenue has steadily declined from when it pocketed more than $1 billion annually under CEO Jeff Zucker’s stewardship, the network remains profitable. According to disclosures in January made public via a defamation lawsuit filed by Navy veteran Zachary Young, CNN generated net income of $400 million in 2023, despite overall revenue dropping nearly 20%, to $1.8 billion, compared to 2021.
Thanks to Trump, though, while the future of mainstream news has cooled dramatically since its peak years, as M&A propositions go, they might just be too hot to handle.