Could WWE Network Scare Off A Potential HBO Spinoff? Analysts Weigh In

HBO is once again rumored to be spun out of parent company Time Warner Inc TWX.

Carl Icahn is at the heart of this rumor, but an important question has yet to be answered: is HBO a good spinout?

"You best have darn good, unique content to get people to pay to watch things on smartphones and tablets," Brian Sozzi, CEO & Chief Equities Strategist at Belus Capital Advisors, told Benzinga. "HBO, of course, does. WWE Network needs more original programming in order to broaden its audience, which would help improve the economics of the business."

World Wrestling Entertainment, Inc. WWE is at a disadvantage because it can't acquire the wide array of content that is available to HBO and other streaming video services.

Related Link: WWE Rises On Earnings Beat, But Are Investors Missing Something?

'Interesting Parallel'

Cody Willard, chairman of Scutify (a financial social network), told Benzinga that this is an "interesting parallel" considering Icahn's deal with eBay Inc EBAY and PayPal.

"Icahn's the best at doing this stuff," said Willard. "Love him or hate him, he's the best. And just like eBay/PayPal actually surprised me, it would surprise me to see him go into the cable industry and try to do that with HBO. But stranger things have happened. I do think HBO accounts for a large chunk of the value of Time Warner Entertainment."

That said, Willard is concerned that HBO may not perform as well as a separate company.

"I don't think HBO would thrive on its own," he said. "It needs to be a piece of the puzzle for someone. Whether Time Warner has to be that company or they're maximizing the value that HBO has is a different question."

Profits? Where?

If investors aren't sure about HBO's prospects, they might want to look at YouTube. According to The Wall Street Journal, YouTube has yet to profit from its one billion viewers.

That number could be understated, however.

"They've got a billion users and if they're doing $4 per user per year, that's pretty horrible," said Willard. "It's barely a penny and a half a day, which, given the amount of advertising that you're bombarded with when you're trying to watch videos on YouTube, I am highly skeptical of this $4 billion annual number."

One analyst told Benzinga that YouTube could be worth as much as $40 billion as a standalone entity. Willard thinks it would be worth even more.

"I think YouTube is worth $50 to $100 billion in a spinoff," he said. "The fact is, Google bought it for $1.6 billion. That means, as I've written before, Google [is] one of the best tech investors you've ever met."

Investors shouldn't get too excited, however. Willard doesn't think there's any chance that Google will let go of YouTube.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.