In the second week of March, Warner Bros Discovery chief David Zaslav flew from his perch in Los Angeles to New York, where he spent the day trying to rally the troops at CNN.
For Zaslav, CNN was the piece of the Warner Bros kingdom that had been creating an outsized amount of drama since it was swallowed up by Discovery in a $40 billion (€37.3 billion) merger last year.
After soaring during the Trump era, America’s first 24-hour news channel had become plagued by sinking ratings, lay-offs, a management reshuffle and disillusioned employees. Zaslav wanted to lift morale and throw support behind Chris Licht, the veteran TV producer whom he had hired to run CNN.
“There was a sense that [Licht] was struggling and needed some support from the top,” said a person familiar with the March visit. “[Zaslav] spent more time on CNN than he wanted to, frankly,” the person added, noting CNN makes up only 5 per cent of the parent company’s overall revenues.
At a town hall that day, Zaslav waxed poetic about CNN’s mission to be a “purveyor of facts and truth” and a “rendezvous with destiny”, while affirming his support for Licht. Less than two months later, Zaslav announced Licht’s exit, effective immediately. “Things didn’t work out,” Zaslav told employees on Wednesday.
People close to Zaslav say that the decision to oust Licht, which was made earlier this week, was the result of several months of mounting concerns. Late last week, Zaslav installed a long-time confidant, David Leavy, as CNN’s chief operating officer to shore up the business.
The Licht debacle – which culminated in an embarrassing 15,000-word profile in The Atlantic last week – has been a blight on Zaslav’s tenure as chief executive of WBD.
With the 2024 US presidential election looming and CNN trailing behind rivals MSNBC, Fox News and occasionally the rightwing upstart Newsmax in ratings, the pressure is on Zaslav to find a new leader that can turn things around.
CNN’s shrinking audience “potentially signals a tremendous lack of relevance going forward”, said Jonathan Miller, a former top News Corp executive and current CEO of Integrated Media, which specialises in digital media investments. “The election will be the bellwether.”
Zaslav’s March visit to CNN headquarters was just one indication of his deep investment in Licht’s success – and in his commitment to repositioning the network away from what he had described as an “activist” stance that took hold in the Trump years.
Some inside CNN felt Zaslav’s plans amounted to implicit criticism of the network’s journalism and believed they reflected the libertarian views of the cable billionaire and WBD board member John Malone. Zaslav said he wanted to see more Republicans on CNN as a way of building a more politically diverse audience than it had under his predecessor, Jeff Zucker. “When we do politics, we need to represent both sides,” Zaslav said in May.
But some inside and outside CNN blamed this attempt to move towards the political centre for some of its ratings woes. “Inherently if you’re a cable news viewer you have an opinion about politics,” said one former employee of the network. “If you say ‘we just want [viewers] who don’t have a point of view’, you just eliminated your audience.”
The boldest experiment of the Licht era came in May, when CNN hosted a live town hall featuring Donald Trump, who had labelled the network as “fake news” while campaigning in 2016 for the White House. During the primetime event, the former president insulted the network’s moderator and reeled off a litany of lies as an audience of supporters cheered him on. CNN staffers were furious, but Licht insisted “America was served very well by what we did”.
Now, many inside the network are asking whether Zaslav will remain as involved in setting the network’s strategy once Licht’s replacement is named, noting that CNN had enjoyed greater autonomy under previous ownership. The search process is expected to take months.
“It could be that they appoint someone and Zaslav lets that person set the tone and this whole idea of moving to the centre is itself moved offstage,” said Jay Rosen, a journalism professor at New York University. “But as far as we know that agenda is still live. Zaslav is known as being very hands- on.”
The new leader will have their work cut out. In addition to the personnel drama and CNN’s declining ratings, the network and its peers are in a race against time as the broader pay-TV universe shrinks. Warner shares rose more than 8 per cent after Licht’s dismissal as investors speculated that CNN could be sold or spun off.
In the US, cable television has been declining steadily as streaming has taken hold of audiences. News and sports are the few remaining areas that draw big audiences to traditional TV, and most executives assume that eventually news will also move online.
In spite of all this, CNN’s revenue has held up relatively well. The company is set to make nearly $1.8 billion in operating revenue this year, according to S&P Global estimates. This is down from the more than $2 billion CNN earned in 2020, but it is still higher than the channel’s revenue from 2019 and all previous years.
Many CNN staffers were elated after the news broke of Licht’s departure on Wednesday morning. “There is much rejoicing,” said one long-time journalist at the network.
Zaslav named an interim leadership team led by Amy Entelis, executive vice-president for talent and content development. She is well regarded internally, having produced dozens of documentary series and films, including Navalny, a feature on the jailed Russian opposition leader, which won an Oscar this year. She had been thought to be heading for the exit after Licht revamped CNN’s approach to long-form documentaries in a move to cut costs.
Besides finding a new chief executive, the interim team needs to try to bolster a wounded staff as it gears up for election season, said Rosen. “The first thing to do is address the low morale and frustrations of a talented staff. Then hiring leadership that understands those people and CNN’s mission.” – Copyright The Financial Times Limited 2023