Politics Will Determine the Fate of WBD’s Sports Assets

The politics around the high-stakes race for TNT Sports parent company Warner Bros. Discovery will go a long way toward determining the future of the sports assets. 

A day after CBS Sports parent company Paramount tendered a hostile bid for all of WBD, the future of TNT Sports now hangs heavily in the balance—with two very different outcomes at play. The competing scenarios include:

• Netflix completing its $82.7 billion acquisition of WBD’s studios and streaming businesses, with a definitive agreement on that deal announced last Friday. In this scenario, WBD will first complete its planned split into two independent companies, with TNT Sports forming a core part of a forthcoming Discovery Global. Netflix did not bid on WBD’s sports assets, and it does not have an interest in them. This route is also closest to the status quo for TNT Sports, already in the midst of reshaping its rights portfolio. 
• Paramount succeeding in its $108.4 billion, all-cash bid to acquire all of WBD. In this scenario, CBS Sports and TNT Sports would combine operations, forming a sports media colossus spanning broadcast and cable television, as well as streaming. 

As a result, the implications of the final outcome, just within sports, are massive—and they will involve billions of dollars, and potentially large-scale shifts in personnel and the sports media rights held by the resulting company.  

The final decision surrounding WBD, however, will have very little, if anything, to do with sports.

The first meaningful venue will be WBD shareholders. Paramount is attempting to take its bid directly to those investors, and force a vote. WBD, for its part, said it will “carefully review and consider” the Paramount bid, which expires Jan. 8.

White House Influence

The second, and likely most meaningful venue, by far, will be the sway of U.S. President Donald Trump during a forthcoming regulatory review process. The White House, and by extension the Federal Communications Commission run by Trump ally Brendan Carr, has already proved itself to be a powerful entity in the U.S. media business. Trump and Carr rendered massive influence in how Paramount completed its $8 billion merger with Skydance Media this past summer. 

Thus far, the often-impulsive Trump has been more reserved in his public comments around the Netflix and Paramount bids for WBD, saying Monday, “None of them are particularly great friends of mine. I want to do what’s right. It’s very important to do what’s right.”

It’s widely expected, however, that relationships with Trump will carry significant weight in WBD’s future. Paramount—and chair and CEO David Ellison—already have a strong tie with the White House, particularly following the Skydance approval process. Affinity Partners, an investment firm led by Trump’s son-in-law, Jared Kushner, is also involved in helping finance Paramount’s bid.

Trump, however, is once more enraged with Paramount’s 60 Minutes after the long-running news program ran an interview Sunday with former political ally and now opponent Rep. Marjorie Taylor Greene (R., Ga.).

“My real problem with the show, however, wasn’t the low IQ traitor, it was that the new ownership of 60 Minutes, Paramount, would allow a show like this to air,” Trump said in a social media post. “THEY ARE NO BETTER THAN THE OLD OWNERSHIP, who just paid me millions of dollars for FAKE REPORTING.”

Netflix, meanwhile, is also waging its own charm offensive with the White House. Co-CEO Ted Sarandos met last week with Trump, prompting the president to then call him “a fantastic man.”

The future role of CNN, also set to be part of Discovery Global along with TNT Sports, could be heavily influential as well. Trump has long hated CNN, and the potential to remake that network within Paramount ownership could be an appealing prospect to him. Along those lines, The Wall Street Journal reported that Ellison has already promised “sweeping changes” at CNN if Paramount prevails.