After Netflix made a big play to buy most of CNN's parent company, journalists and executives at the news network thought they had dodged a bullet. One week later, it's pretty clear they hadn't.
Two questions remain: Why did they think that in the first place? And what's ahead?
Netflix, which is already the nation's leading streamer, had struck a deal to acquire the movie studios, archives, intellectual property and streaming services of CNN's parent company, Warner Bros. Discovery.
But Netflix did not want to become Newsflix. CNN and its sister cable channels were to be spun off in a separate company. Inside CNN, that seemed like good news.
"It will enable us to continue to roll out our strategy to secure a great future for CNN by successfully navigating our digital transition," Mark Thompson, the chairman and CEO of CNN Worldwide, wrote in a memo to staff shortly after Warner said it would accept the Netflix offer.
Staffers recalled the mass layoffs caused when new corporate owners at Warner canceled the network's streaming service CNN+ in April 2022, just a month after it launched. They say they had been heartened to think their new efforts might actually get off the ground.
But in the new plan, as part of a corporate family of fading cable channels loaded with debt from the merger that created Warner Bros. Discovery, CNN's fate would remain entirely up for grabs.
And President Trump, who has long called networks such as CNN fake news and long sought to taunt or toss out CNN's reporters, now wants a deciding role in the network's future.
"I think the people that have run CNN for the last long period of time are a disgrace," Trump said Wednesday at the White House in response to a question from a Daily Mail reporter. "I think it's imperative that CNN be sold."
This account is based on interviews with seven current and former CNN staffers, including journalists and executives. They spoke on condition they not be named due to the uncertainty surrounding the network's future and, for those still at CNN, their jobs.
CNN put in play by corporate maneuvers
CNN's status was put in play this past summer, when Warner CEO David Zaslav announced the company would split in two. Unsolicited, David Ellison, backed by his billionaire father Larry, bid for the entire company. Zaslav turned them down. They kept at it. He finally put the company up for auction.
Larry Ellison is the co-founder of Oracle, one of the richest people on the planet, and an ally of Trump. David is the head of Skydance, a Hollywood production company. Since last summer, he's also the head of Paramount Global, which includes CBS, Paramount Studios and other properties.
Presidents do not - or are not supposed to - play a role in anti-trust decisions. They are typically handled by Justice Department officials or semi-autonomous regulatory agencies.
Yet to get the sale of Paramount to the finish line, its prior ownership paid $16 million to settle a lawsuit Trump filed against CBS's 60 Minutes – a lawsuit that outside legal observers considered flimsy. The company also announced the end of the late night show of longtime Trump critic and satirist Stephen Colbert.
The Federal Communications Commission approved the Ellisons' takeover of Paramount, required because the company owns 28 local television stations and needed government signoff to allow the transfer of their broadcast licenses.
With David Ellison now at the helm of CBS, there have been more changes that appear to be aimed at responding to Trump's criticism of the network and to appeal to conservatives, according to four people at CBS. (They spoke on condition of anonymity to characterize sensitive corporate matters.)
Ellison named Kenneth Weinstein, a former head of a conservative think tank, as ombudsman at CBS News and he also selected Bari Weiss, the founder of the right-of-center Free Press, as the network's editor in chief. Ellison also fulfilled pledges to scrap DEI initiatives at the network.
Despite feeling of relief, CNN still vulnerable
Hence the sigh of relief inside CNN when news broke of Netflix and Warner's deal: many of CNN's journalists didn't want the political implications of having Paramount as owner. Nor did they want to merge with CBS, which would entail massive job losses.
Yet the Netflix deal, assuming it is consummated, would leave CNN and its sister channels exposed, vulnerable to purchase by someone else. Maybe a local TV giant like Nexstar or Sinclair Broadcast Group, which have a center-right and a hard right orientation, respectively, would want to acquire it. Maybe an investment fund would.
It is just as likely Paramount itself would give it another go – and pick up the former Warner channels on the cheap. Ellison had suggested they were worth $1 a share. (He is currently offering $30 a share for the whole company.) And now, among some staffers at CNN, there's a sense of growing dread.
Trump's comments Wednesday about the network's leadership were "extremely unprecedented, perhaps not surprising, coming from President Trump, given his long dislike for any journalism that holds him accountable," CNN anchor Jake Tapper said on his show Wednesday in a clip he reposted on social media. "He made it so clear that the fate of CNN is what's driving his view and his potential involvement [in] this potential transaction when it comes to who buys Warner Bros. Discovery."
Tapper's on-air guest was former CNN reporter Oliver Darcy, founder of the media newsletter Status. He told Tapper that Trump was "a thin-skinned aspiring autocrat who wants to seize control of the media. And he wants an obedient press."
Paramount seeks to build trust as it seeks to bulk up
As this week has proven, the Ellisons are far from finished in their pursuit of the entire company. They upped their offer a bit. They pledged to unify big studios and beef up streaming, sports rights and cable properties to take on the likes of Netflix. They promised to save Hollywood from being swallowed by the giant streamer. The Ellisons are seeking to rally the creator class on their behalf.
Having been frozen out by Warner chief Zaslav, Paramount pitched itself to Warner's investors as the logical and more profitable choice — backed by far more cash up front than Netflix's offer. Paramount's new chief legal officer is Makan Delrahim, perhaps best known as the head of the U.S. Justice Department's antitrust division during Trump's first term in office. Ironically, in office Delrahim unsuccessfully sought to block AT&T from acquiring CNN and its then-corporate parent.
AT&T may have wished Delrahim had succeeded in court; it spun off its media holdings to merge them with Discovery several years later, creating Warner Bros. Discovery.
Sen. Elizabeth Warren, a Massachusetts Democrat, is among the lawmakers who have raised questions about media consolidation on bids from both Netflix and Paramount.
"We've got two already giant companies, both of which have these big streaming services," Warren said Thursday on NPR's Morning Edition. "We're going to spend a bazillion dollars to do this. But we're going to make even more bazillions of dollars.
"And how do they plan to do that?" she asked rhetorically. "Well, there's only two places to go. They plan to do it by squeezing the workers. That is, there'll be fewer places to pitch your movie. There'll be fewer places to be a makeup artist or to drive trucks for. And they plan to squeeze the consumers. And they do that, of course, by raising prices."
Major investors, major ties to Trump
David Ellison argues the administration will more readily approve Paramount than Netflix. And he's not been shy about touting his family's ties to Trump. "I'm incredibly grateful for the relationship that I have with the President, and I also believe he believes in competition," Ellison told CNBC earlier this week. Earlier this year, Trump arranged for Larry Ellison to receive a significant stake in the U.S. version of TikTok.
As for the financing of the Paramount deal: According to the small print of Paramount's filings with federal financial regulators, it involves the Public Investment Fund of the Kingdom of Saudi Arabia, controlled by Saudi Crown Prince Mohammad bin Salman, an ally of the president who was implicated in the assassination of Washington Post columnist Jamal Khashoggi in 2018. At least two Republican senators said after classified briefings they believed Prince Mohammad was involved in the hit. The Office of the Director of National Intelligence concluded the prince approved an operation to capture or kill Khashoggi.
Other investment partners in the Paramount bid include the L'imad Holding Co. PJSC of Abu Dhabi, the Qatar Investment Authority and the U.S. investment fund Affinity Partners. The last of those funds is controlled by Jared Kushner — the president's son-in-law and former White House adviser. In its securities filing, Paramount said all agreed to foreswear any claim to a seat on the board of directors.
In interviews, CNN staffers recoiled at the idea that the Saudi royal or the Trump in-law would have any ownership stake in the network – even given the promises they would keep their distance.
"They could be in it purely for profit," says Kelly Shue, a finance professor at the Yale School of Management said of the investors. "But it is also disturbing that they could control media framing and news."
That's the appeal for Trump.
When a reporter for ABC News questioned Prince Mohammad about Khashoggi and the Saudi involvement in the September 2001 terror strikes on the U.S in an Oval Office appearance last month, Trump attacked her for being "insubordinate" — as though she worked for him somehow.
Similarly, on Wednesday, when Trump was asked about the release of a video showing the U.S. strikes on Venezuelan vessels that his Defense Department claims are operated by terrorists, he turned his ire on the questioner.
"I thought that issue was dead. I'm surprised. You must be with CNN," Trump said to the reporter, who indeed was with CNN. "You know you work for the Democrats, don't you? You're basically an arm of the Democrat party."
With that, Trump shut down questions from all reporters present.
Paramount's current offer to buy Warner is good through Jan. 8th, although it could be extended.
On Monday, Netflix co-chief Ted Sarandos told investors that he foresaw a new bid from Paramount and that he expects Netflix's deal to hold.
There's no sign that this auction is over yet. And there's no more clarity on who will own — or control — CNN.
Editor's note: CNN, Paramount Plus, Warner Bros. Discovery and Warner Bros. Pictures are among NPR's financial supporters.
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