Is CNN worth more than analysts think?

Wall Street analysts may be underestimating the value of Time Warner’s CNN unit, according to people with close knowledge of its operations.

If Rupert Murdoch’s 21st Century Fox is successful in its effort to buy Time Warner, it is expected to sell CNN, which competes with the Fox News Channel. Such a move would likely ease, though hardly eliminate, the concerns of the Justice Department, which would review such a deal for any potential antitrust concerns.

Two prominent media analysts -- Marci Ryvicker of Wells Fargo and Kannan Venkateshwar of Barclays -- have both put CNN’s value around $4.3 billion. That is an adjusted for taxes. Pre-tax value is in the $6-billion to $7-billion range.

That is low, according to current and former senior executives at Time Warner Inc., who declined to speak publicly on the matter because of the 21st Century Fox situation. One former executive put CNN’s worth at between $8 billion to $12 billion. A company insider said $8 billion to $10 billion was in the ballpark.

While CNN’s ratings are down in the United States and it is still struggling to find a programming strategy, it is still very profitable and attracts premium advertisers. As important is CNN International, which is in more than 200 countries and is very successful. CNN’s online operations are also solid.

The CNN unit also includes HLN (formerly Headline News), although it is unclear if 21st Century Fox would shed that asset as well since it has moved away from being a hard news channel in recent years in favor of covering high profile criminal trials and celebrity fare.

CBS is mentioned as the most likely buyer for CNN. Last week, CBS CEO Leslie Moonves again said his company would certainly look at CNN if it were to become available. CNN and CBS have had talks in the past about creating a joint venture.

Walt Disney Co.’s ABC News has also flirted with CNN and would probably at least take a look at the network as well.

Follow Joe Flint on Twitter @JBFlint.