warner bros discovery CEO David Zaslav could have chosen from a number of reasons for firing CNN head Chris Licht.
Licht, who left the network Wednesday after just over a year in the role, spoke about leadership style, morale, the show’s decisions, how it covers former President Donald Trump, and ultimately teeth, overconfidence.
But Licht’s entire tenure at CNN might have been different had Licht persuaded Zaslav to keep CNN+.
It may sound absurd. Few people watched CNN+ during his first two weeks since its launch last year. Zaslav and several other Discovery executives, including JB Perrette, current head of streaming at Warner Bros. I was skeptical about spending hundreds of millions of dollars on half-baked content ideas. “Jake Tupper’s Book Club” and “Parental Guidance by Anderson Cooper.” Leavy is now part of the executive team helping Zaslav find a new CEO.
Zaslav thought CNN+ was a waste of resources for a company with $50 billion in debt that needed more free cash flow. generate $3 billion merger-related synergies; But before deciding anything, he wanted to hear Licht’s thoughts.
Licht was due to start work on May 2, 2022, but started a few weeks earlier to join CNN+. In multiple virtual meetings, he was spoken to by CNN+ head Andrew Morse, CNN+ general manager Alex McCallum and CNN, according to people familiar with the matter, who asked not to be identified because the talks are private. I met with Robin Peterson, Chief Technology Officer of Perrette and Discovery Streaming CFO Neil Chugani (who later became CNN’s CFO) were also present.
Licht expressed skepticism about programming the product, people familiar with the meeting said. Discussions centered around the feasibility of offering a product named after CNN without actually featuring a live feed of the network’s cable programming. Perrette has instructed CNN+ executives to pause all marketing spending and not launch Roku.
The CNN+ team left the meeting assuming the streaming service would probably be discontinued, but sent a financial report to Discovery executives. The company was budgeting for $440 million in 2022 and $550 million in 2023, according to people familiar with the matter. The proposal calls for CNN+ to be profitable by 2025 and breakeven on cumulative investment by 2028.
Less than three weeks later, CNN+ was dead. A spokeswoman for Warner Bros. Discovery declined to comment on details of the meeting.
CNN+ Alternate Reality
His tenure at CNN might have played out differently if Licht had persuaded Discovery executives to keep CNN+.
Licht’s background is show production. He started ‘Morning Joe’ on his MSNBC and ‘Late Night With Stephen Colbert’ on CBS. CNN+ would have given him a canvas to create the show from scratch. It would also have given him a growth story to pitch to the press and investors. Had it not been for the additional expense, he might have cut back on the budget while keeping the subscription product’s bones alive, iterating on creative ideas until he found one that worked. CNN+ started at $4.99 per month, but the price is subject to adjustment.
Former CNN chief Jeff Zucker, who left the network a few months before the WarnerMedia-Discovery merger, revealing a working relationship, said: had aspirations about Turn CNN+ into a subscription service like The New York Times. It would have taken years, but we could have given our employees and management the north star. The attention to CNN+ may have been staged as a distraction from declining terrestrial television ratings, which Licht may have dismissed as relatively unimportant compared to building the company’s future. .
Jeff Zucker (left) and David Zaslav
Chris Creponis | Bloomberg via Getty Images. CNBC
Without CNN+, Licht would be left without a burgeoning cable TV network and a consistent digital strategy. That’s an abomination for modern media companies.
In his first year in office, Licht laid off hundreds of employees and shifted around existing CNN anchors and reporters to build new morning and primetime programming. His experiment with moving prime-time anchor Don Lemon into the morning has gone awry. CNN fires Lemon in April. Licht tried to move afternoon anchor Tupper to primetime, but Initial reviews were not goodLicht abandoned the plan.
A new leader with a vision
In Licht’s defense, his lack of future strategy reflected Zaslav’s limited vision.
“when [Zaslav] Licht told CNBC last year, “When I called and got the job offer, he told me what he wanted from CNN. And I was like, ‘That’s exactly what I want to see. It’s the kind of network that I think of,'” he said. There is no light between his vision of this network and my vision of this network. The only reason I took this job is because he was in charge. I thought I could get this to him. “
Zaslav told Licht that he wanted To make CNN not an advocacy network And a straighter news network. Warner Bros. Discovery Director John Malone told CNBC in 2021, “We want CNN to go back to journalism and evolve to have real journalists, so it’s unique and fresh. let’s,” he said.
But CNN journalists claimed it was a straw doll. They claimed they were not claiming anything other than the truth. Some were offended by Malone’s comments as a disrespect to their journalistic abilities.
CNN could change the tone of the show around Trump, the frontrunner for the 2024 Republican presidential nomination. Exaggerations and rhetoric about his lies and exaggerations can be tempered, depending on the circumstances.
Still, it’s not a business strategy. CNN+ may have been destined to be just a fledgling streaming service. But it expressed hope for how the brand could move towards the future. Successful leaders at CNN must find ways to drive viewership with engaging programming while cultivating new digital businesses that bring in revenue and a younger audience.
It’s also possible that CNN+ never took off, and Licht may have spent the past year working on a flawed concept his Discovery bosses never liked, and in any case it’s probably his would have resulted in dismissal. Investors gasped at increased spending on the streaming service last year, so plans for CNN+ had to highlight its long-term appeal.
The problem was that there was no CNN+, and Licht had a weak hand. CNN’s 2022 earnings fell to about $750 million (including a $200 million loss from CNN+) from $1.25 billion the year before due to a sluggish advertising market and falling cable subscription fees. According to the New York Times. CNN advertising revenue decreased by nearly 40% Under Licht, the Daily Beast reported, citing media radar data.
The 2024 election and a stronger political advertising market should help CNN improve its finances next year, but “wait for 2024” isn’t a strong message, nor does it offer a solution for 2025 and beyond.
If Mr. Zaslav wants to find a CEO who will win the hearts and minds of his employees and drive sales and revenue, he needs someone with a more holistic strategy than just programming for cable TV audiences 55 and older. you’ll have to find out.
In this way, Licht was destined from the beginning.
Correction: Robin Peterson was CNN’s Chief Technology Officer. His title was incorrectly listed in previous versions. Neil Chugani was his CFO at Discovery Streaming. His name was misspelled in previous versions.
WATCH: Chris Licht’s eventful tenure