CNN Said Valued at Up to $8 Billion by Fox in Time Warner Deal

Wednesday, 16 Jul 2014 05:46 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
CNN, the pioneer of 24-hour network news, could fetch as much as $8 billion should it be sold following a tie-up of parent Time Warner Inc. and 21st Century Fox Inc., according to people familiar with the matter.

Fox would sell CNN to avoid a challenge from antitrust regulators if it can persuade Time Warner to accept a takeover offer, the people said. Fox expects CNN to bring in $6 billion to $8 billion, based on multiples of its earnings, said the people, who asked not to be named because the deliberations are private.

A new owner could use CNN, which founder Ted Turner used to usher in the era of round-the-clock coverage in 1980, to get access to 99 million U.S. households and millions more potential viewers around the globe. That would benefit companies like CBS Corp. that are assembling more cable assets, media giants such as Walt Disney Co. that have sought to build bigger news operations, or buyers like Google Inc. looking for a prestigious mainstream-media outlet.

“You have to consider the franchise it has,” Porter Bibb, managing partner at Mediatech Capital Partners, told Tom Keene and Scarlet Fu in a radio interview on “Bloomberg Surveillance.”

CNN’s global reach, with outlets from Latin America to India, could attract buyers from outside the U.S., he said. “It’s still a global franchise with profit,” he said.

Fox’s estimates for CNN’s value are based on a typical multiple of 12 to 15 times earnings for media assets, one of the people familiar with the matter said. If a bidding war among buyers were to erupt, CNN could go for as much as $10 billion, another person said. Fox committed to selling CNN in a letter to Time Warner CEO Jeff Bewkes to address his concerns over regulatory scrutiny of a potential merger, the person said.

Time Warner’s collection of assets, from cable networks TNT and HBO to the Warner Bros. film studios, offer Rupert Murdoch, Fox’s billionaire chairman, a way to expand his programming empire. Since he already has Fox News, owning CNN would create a conflict.

No Sense

“CNN would most likely need to go away,” said Tony Wible, an analyst with Janney Montgomery Scott based in Philadelphia, who said both private equity and foreign companies could be interested in the network. “CNN has been an anchor in Time Warner’s portfolio. Keeping it doesn’t make sense in this deal.”

Fox has dominated cable-news ratings for the last decade, outpacing CNN for the last 50 quarters, according to data from Nielsen. The last time CNN edged past Fox was in the fourth quarter of 2001, in the months surrounding the Sept. 11 attacks. In the most recent quarter, Fox’s ratings of 1.58 million viewers more than tripled those of CNN’s 460,000 viewers.

Among major U.S. broadcasters, CBS is the most in need of more cable networks because it has relatively few, said Paul Sweeney, an analyst at Bloomberg Industries. The New York-based company owns Showtime and the Smithsonian Channel.

“CBS needs to increase its own cable network holdings,” Sweeney said. “They have CBS Sports network, but they want to own more cable networks.”

Dana McClintock, a spokeswoman for the CBS, declined to comment on a potential CNN deal.

ABC’s Struggles

Disney’s ABC struggled to establish its own cable-news outlet, ABC News Now. It’s now trying to build distribution for a news and entertainment channel, Fusion, produced with Univision Communications Inc. CNN would add a more mainstream network to its portfolio. A Disney representative declined to comment.

Potential suitors could extend beyond broadcast companies, instead attracting a technology giant like Google that seeks to add video programming and distribution, Bibb said. Tim Drinan, a spokesman for Google, declined to comment.

“It’s a perfect complement to YouTube,” Bibb said. “It’s going to be a major content network distribution system worldwide.”


© Copyright 2014 Bloomberg News. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

US Ebola Patient's Sister: Brother Told Hospital He Had Been to Liberia

Wednesday, 01 Oct 2014 13:17 PM

The first patient to be diagnosed with Ebola in a U.S. hospitalwas evaluated initially and turned away, a critical misse . . .

Rep. Trey Gowdy: WH Should Pay Attention to Rep. Cummings on Secret Service

Wednesday, 01 Oct 2014 12:58 PM

The White House should pay attention when someone like Maryland Democratic Rep. Elijah Cummings calls for change in the  . . .

Politico Report Rips Culture at Secret Service

Wednesday, 01 Oct 2014 12:36 PM

It is getting harder to defend the foibles of the U.S. Secret Service, an agency tasked with protecting the president bu . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved