I've been following this story for the past few weeks now.
Here's the whole deal. Warner Bros. Discovery has agreed to field sale offers. They own a movie studio, a massive archival program library, and—I don't think this is that much of an exaggeration—about half of the cable television channels operating in this country.
There ended up being three bidders: Netflix, Paramount Skydance, and Comcast. Now, here's where things get interesting: Netflix and Comcast were not interested in the cable channels. Comcast had just spun off their cable channels wing to Versant, who also said "no thanks." Netflix, of course, has no interest in being in the cable business. Paramount Skydance wants the whole company. They also own a large suite of cable channels.
It doesn't make sense to separate the two. Ted Turner built much of WBD's program library specifically so his cable channels would have content it owns to carry. If Netflix, for example, buys the WBD archival libraries, almost all of those cable channels become worthless. (Plus it would throw a disastrous wrench into the rerun market, as Netflix would presumably pull all of WBD's old series off traditional television—see what happened when Apple locked down the rights to Charlie Brown for another example, then imagine it with a far larger scale and breadth of series—to make them exclusive to their platform.) What would be left of value would be CNN, and a modest package of sports rights. TNT and TBS would effectively be worthless without programming to carry. Cartoon Network would die a sudden death. The Discovery/Animal Planet/Travel Channel/HGTV/TLC/etc. suite would be thrown into total chaos with all the programming they'd produced over the years gone to Netflix.
And then there's Paramount. Paramount also controls a good chunk of the cable market and has a sizable archive of its own. (The other players in the cable space still are Disney and a handful of smaller players including Fox, Hallmark, Great American, and so on.) But even though the Ellisons insist that it'd be an easier deal to sell antitrust-wise, it poses its own problems: merging Paramount Skydance with WBD would give the company control of the vast majority of premium cable channels (HBO, Showtime, Cinemax, TMC, FLIX), a majority of cable channels, a huge chunk of the rerun market (though at least in this case, CBS would likely continue to make it available for syndication), and an ability to corner a huge chunk of the cable market. It may indeed, in a normal world, be a tougher sell to the bureaucrats who decide antitrust law than a Netflix deal would. But Trump likes Ellison.
I could see a compromise being struck. The ideal would be, at least in my eyes: Netflix gets its studio and archives, Paramount Skydance gets CNN and the sports package, and the two sign a shared services agreement granting Paramount permission to distribute and sell advertisements for the archive to linear outlets (much like Paramount has, up until recently, done for Sony with Wheel of Fortune and Jeopardy!). That would maintain at least much of the status quo and maintain the value of all of the properties therein with as little disruption as possible.
