August 13, 2022
CNN profit to drop below  billion for first time since 2016: Report

According to a report, CNN’s profits are poised to fall below the $1 billion mark for the first time since 2016, as its new boss scrambles for new ways to generate revenue.

Chris Licht, who took over CNN three months ago after the abrupt exit of former chief executive Jeff Zucker, has not only inherited a scandal-ridden network, but also runs a channel with bearish ratings.

The cable news network’s profitability declined to $956.8 million this year, according to estimates from S&P Market Intelligence. According to the New York Times, this is well short of the company’s internal target of $1.1 billion. reported earlier on Tuesday on estimates.

CNN’s Guardian Warner Bros. Discovery reports earnings on Thursday, but CNN’s financial position is not expected to break down or provide more details. A company representative did not return a request for comment.

CNN’s new boss Chris Licht is hoping to expand the news organization’s profitability as he tries to raise ratings.
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Warner Bros. Discovery immediately shut down the new CNN+ streaming service on April 30, less than a month after its launch. Licht started his job at CNN a day later, reporting the news to hundreds of newly-hired CNN+ employees who were brought in to build the service, which was expected to cost the company $1 billion.

Reportedly, Licht hired longtime friend Chris Marlin, most recently an executive at Florida homebuilder Lenar, to come up with ways to bring in new revenue.

The Times said that CNN employees called Marlin the “Fish Man” because of his nickname. According to his linkedin, Marlin, a former attorney for the firm Foley & Lardner and Holland & Knight, has no experience running a cable news network. His LinkedIn says his current title is Head of Strategy and Business Operations at CNN, where he is a “strategist and business driver.” Focused on geopolitics, geoeconomics, innovation, scale, climate change, misinformation, the future of media, AI, China and the law.

Some of his business ideas include signing advertising deals with major tech firms such as Microsoft, selling sponsorships to corporate underwriters, expanding CNN’s brand in China and growing the e-commerce play CNN Underscore, the report said.

To reduce expenses, Warner Bros. The report said Discovery CEO David Zaslav has tightened CNN’s travel and spending policy, with work celebrated for senior vice presidents and capped at $50 per person. Licht has also cut costs in CNN’s reporting efforts, opting not to send US-based employees to overseas events.

CNN World Headquarters
Under Warner Bros. Discovery, Licht is tasked with making CNN’s journalism more fact-focused and less opinion-based.
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Zaslav has said he wants to shift CNN from its more left-wing opinion-based, Trump-heavy reporting, which was famed under former CNN boss Jeff Zucker, to more fact-based, middle-of-the-road journalism . The move comes as CNN’s ratings have been on a downward spiral since former President Trump left office.

Journalism first. America needs a news network where everyone can come and be heard; Republican, Democrat,” Zaslav said at Allen & Co.’s “summer camp for billionaires” in Sun Valley, Idaho this summer. “I think you’re seeing more of this in CNN. We will not focus on ratings and it is going to be worth more in the long run.

But till now the plan has not been paid. According to Nielsen, CNN attracted an average of 639,000 people in prime time this quarter, down 27% from a year ago. It lags behind left-leaning MSNBC, which is down 23% in prime time during the same period, and right-leaning Fox News, where viewership has increased.

David Zaslav
Warner Bros. Discovery CEO David Zaslav wants to invest $3 billion in costs in 2023.
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Currently, Warner Bros. Discovery, which includes HBO Max, TBS, Food Network and Animal Planet, is trying to raise about $3 billion in cost savings.

Undercutting CNN is the cost of covering the Ukraine war, paying some of the costs associated with CNN+, such as the sizable salaries of high-profile journalists like Chris Wallace, The Times said. Selling programming CNN+ created for other providers.

The company also faces a valuable, public lawsuit filed by former CNN anchor Chris Cuomo, who was fired last year after it was revealed that he had played an active role in advising his brother, then-New York Gov. Andrew Cuomo, How to Combat Sex Misconduct Claims Made Against Him by Former Colleagues.

Chris Lichto
Licht has tapped longtime friend Chris Marlin to help CNN find new sources of revenue.

Weeks later, Cuomo’s boss at CNN, Jeff Zucker, stepped down after learning that he was having a consensual relationship with his top marketing executive, Allison Golst.

Cuomo filed a $125 million claim against CNN after the network refused to pay the remaining $18 million on his contract. The matter is in arbitration.

But according to Steve Kahl, a senior analyst at Wells Fargo, CNN’s centrist strategy is a big bet that could blow up.

“If the strategy provides more reach – that is, higher ratings – then it is probably a better business,” Cahill told The Times. “If it provides less reach – if it turns out that Central America is a narrow place to be these days – then it is a less good business strategy.”

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