Comcast's Versant Gives Paramount Leverage In WBD Campaign

Paramount Skydance has bolstered its case against Warner Bros Discovery's planned merger with Netflix, pointing to the weak market debut of Comcast's cable networks spinoff, Versant Media, as evidence that WBD's own cable assets — slated for a similar separation — hold minimal value for shareholders.

Versant Media Group, which houses channels including CNBC, MS NOW (formerly MSNBC), USA Network, E!, Syfy and Oxygen, tumbled 13% in its Nasdaq debut on Monday, closing at $40.57 per share and valuing the company at roughly $6.5 billion. The sharp decline underscores investor skepticism toward legacy cable TV businesses amid cord-cutting and the shift to streaming.

Paramount Skydance, which is pursuing a hostile $108.4 billion all-cash bid for all of Warner Bros Discovery (including its cable networks like CNN, TBS and Discovery Channel), argued that Versant's performance serves as a proxy for WBD's planned spinoff of its linear networks into Discovery Global later this year. Sources close to Paramount said the low valuation suggests Discovery Global could be worth less than $2 per WBD share — or potentially even lower — effectively making Netflix's $82.7 billion offer for WBD's studios, HBO and streaming assets far less attractive when adjusted for the spinoff's diminished worth.

One major WBD investor, Penwater Capital Management, echoed this view in a letter to the board, estimating Discovery Global at under $1.50 per share based on Versant's trading multiple.

Warner Bros Discovery's board rejected Paramount's latest revised offer on Wednesday, calling it a risky leveraged buyout saddled with excessive debt and inferior to the Netflix deal in value, certainty and risk. Paramount's $30-per-share bid, backed by $40 billion in equity (personally guaranteed by Oracle co-founder Larry Ellison) and $54 billion in debt, remains open for tenders until January 21.

The bidding war has intensified scrutiny on media consolidation, with antitrust concerns raised over either outcome potentially creating a dominant player in Hollywood content and distribution. Netflix's deal would pair its streaming dominance with WBD's premium library, while a Paramount merger would fuse two major studios and TV operators.

Comcast completed the Versant spinoff to focus on its core streaming, broadcast and theme park assets, a strategy WBD aims to mirror by shedding its declining cable networks. However, Versant's post-debut slump highlights the challenges facing pure-play linear TV companies in a fragmented market.