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I hope you all had a wonderful Thanksgiving break!

The second-round bids for Warner Bros. Discovery are in, and so far the only detail we've gotten is that Netflix has submitted an offer that's mostly in cash. More information will certainly trickle out in the coming days. 

Until then, we thought it would be a good time to look at the state of cable. The nature of the bids for WBD, after all, perfectly encapsulates the struggles that cable channels have faced with the rise of cord-cutters and "cord nevers." 

Of the three suitors for WBD — Paramount, Netflix and Comcast — two of them are only interested in the studios and streaming business. That's because while the legacy cable channels like CNN or TNT remain profitable, virtually all of them are seeing declining viewership and ad revenues. Only Paramount wants the entire company, and is hoping to pair those networks with its own slate of linear TV properties.

Paramount's desire to lean even more into cable is an exception in the industry, with all of the players showing declining revenue and profit in the last reporting period. It's one reason why cable giant Comcast is spinning its cable business — which includes MSNBC (now MS NOW) and CNBC — out as a separate company called Versant. 

The cable businesses have a few options as the pressure mounts. 

• They can consolidate with the hope that larger scale would be able to keep ad revenue from declining too quickly
• They can lean into building a more digital footprint, as Paramount CEO David Ellison has said he wants to do with networks like Nickelodeon and Comedy Central.
• They can disappear, which some experts believe will happen at a faster rate in the coming years.

“No one inside Hollywood believes linear is ‘coming back’ to what it was,” Aaron Meyerson, Qualia Legacy Advisors managing director and a former TV executive, told our Lucas Manfredi. “The debate now is about how to slow the decline, harvest the cash, preserve the crown-jewel brands, and decide which networks are worth carrying into a streaming-first future — and which will be quietly euthanized.”

It's quite the contrast from what had been one of the most successful businesses in media over the past half century, but reflects the kind of risk of disruption that all businesses eventually face. 

Roger Cheng
Managing Editor of Business and PRO
roger.cheng@thewrap.com

THE STATE OF CABLE

With third-quarter earnings results in the books, Manfredi takes a look at the cable business, and it wasn't pretty...

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