Who's Going to Buy Time Warner? Someone Who Loves Cable TV.

Now that Rupert Murdoch’s bid for Time Warner is out in the open, courtesy of the New York Times, we can start speculating about who’s going to end up with the media company.

But first, let’s be clear about what kind of media company Time Warner is: A company that makes the majority of its money from cable TV.

So anyone who’s willing to bet $80 billion or more on Time Warner is really making a bet on cable TV — even if cable has peaked in the U.S., and even if it is facing real long-term threats from technological change.

Here’s a quick look at Time Warner’s P&L, which used to be complicated in the old days, when Time Warner owned a giant Internet company, a giant cable TV provider and a giant publisher.

Now it’s pretty simple. Time Warner owns two big cable TV companies and one big movie studio.

At first blush, it looks as though Warner Bros. — the people who bring you the Batman and Lego movies, as well as hit TV shows like “The Big Bang Theory” — is as important to Warner as its cable business.

Last quarter, for instance, Warner Bros. generated 45 percent of Time Warner’s revenue:

But now look at profitability, and things get more focused: HBO and Turner, Time Warner’s two pay-TV businesses, accounted for the vast majority — 70 percent — of Time Warner’s operating income last quarter, a ratio that has been fairly consistent.

You can add some nuance to this if you want by noting that a chunk of Warner Bros.’ profits come from TV, too — the value of the TV shows it sells to other networks, and then into syndication, as well as the value of its movies when they appear on TV as well. And it’s possible that there’s a set of buyers — perhaps from China or India — that will be much more interested in Warner Bros. than others will be.

But Rupert Murdoch bid on Time Warner — and will almost certainly bid again, despite a formal statement saying his company is “not currently in discussions with Time Warner.” He’s in the pay-TV business and he wants to stay in it — and he wants to get bigger, in part because pay-TV providers like Comcast* are going to get bigger.

Who else might want to bet on pay TV? Perhaps the people who are already in it, though there aren’t many other cable programmers in a position to make a bid of that size. One option would be Disney, which already owns ESPN, the most valuable asset on cable. Viacom is much more of a stretch, but the company has started to get more acquisitive.

Then there are the people who aren’t in pay TV, but have been circling the industry for years, trying to figure out how to get past it or break it up. Why not join them instead?

In the past, the notion of inserting Apple into this list would have seemed silly, because buying a giant media company wasn’t something that Apple did. But spending $3 billion on a headphone and streaming music service company wasn’t something that Apple would do, either. Note that the Beats deal was so inconsequential for Apple, financially speaking, that it didn’t even merit a filing with the SEC.

Meanwhile, M&A deal chatterers had already been bouncing Google’s name around as a potential Time Warner buyer. At one point that also would have seemed a stretch, but it’s at least at the edge of possibility.

People who know Larry Page say he’s generally uninterested in the business of acquiring content rights and reselling them to consumers, and that’s the definition of the TV business. But people who have talked to Page about content deals say the only time he’s perked up is at the notion of owning a complete set of content rights.

For instance, last year, when Google considered a deal for the NFL’s Sunday Ticket package, which gives the owner the right to sell subscribers a subset of pro football games, Page wanted to know why Google couldn’t simply acquire rights to all the NFL games.

So would Time Warner, which comes with several fully distributed pay TV channels, along with a premium pay TV business that has 144 million subscribers around the world, be enough to interest Page?

We ought to find out soon. Time Warner has sent out its formal notice explaining why it rejected Fox’s offer. But in M&A speak, that’s just another way of saying “who else wants to bid?”

If you’re interested in the future of TV — and pay TV in particular — summer just got much more interesting.

* Comcast owns NBCUniversal, which is an investor in Re/code.

This article originally appeared on Recode.net.

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