The abrupt yet not-all-too-surprising exit of Chris Licht from CNN is a bit of a relief for staffers who thought he was the wrong person for the job, but whoever succeeds him at the cable news network will face many of the same headwinds.
Declining ratings and profits are the immediate challenges, but the longer-term project will be to carve out CNN’s place in an era of cord-cutting and streaming.
Chris Licht Is Out At CNN After Tumultuous Tenure
Speculation over who would succeed Licht after the news broke of his exit Wednesday quickly focused on Amy Entelis, CNN’s executive vice president for talent and content development, as a potential permanent CEO. Entelis was among the executives named among interim leaders of the network, as she was last year after Jeff Zucker’s abrupt resignation.
The buzz over who may be the next CEO may not be as important as just what Warner Bros Discovery CEO David Zaslav wants.
Many staffers who had intense loyalty to Licht’s predecessor Zucker were skeptical of Licht’s leadership almost from the start. He had not managed a worldwide news organization, and he was picked by a CEO, Zaslav, who viewed the network as a crown jewel yet also wanted change. Along with key figures like WBD board member and key advisor John Malone, Zaslav felt the network had strayed from its straight-news roots and veered too far left under Zucker. Instead of CNN being the anti-Trump voice of the opposition in the media landscape, Zaslav explicitly wanted it to be less of an “advocacy network,” as he explained at a Wall Street conference last month.
What’s unclear is whether Zaslav will still desire such an approach, which some see as the kind of down-the-middle, both-sides journalism that used to be the network’s specialty. Some network personalities, like Christiane Amanpour, have been vocal in why that approach doesn’t work in an environment of misinformation and lies. As one industry insider said, as inevitable as Licht’s exit looked in recent days, “people realize Chris was doing what David and John Malone wanted him to do at CNN, and that is not going to change.”
One network on-air journalist noted that what is lost by Malone’s approach is the current news environment is not one of left vs. right, but truth vs. lies. Yet anchors are being pressured to be less confrontational to Republican guests, the source said. “The notion that we had become an advocacy network is just not true,” they said.
It also isn’t entirely clear that such a back-to-basics approach for CNN can even bring in an audience, given that the numbers continued to decline even with Licht’s changes. In a 15,000-word profile for The Atlantic that set the stage for his exit, Licht, while bothered by the lackluster ratings, emphasized the importance of CNN as a “reputational asset” to Warner Bros Discovery, and the need to return it to a respected — and less polarizing — brand.
Malone’s desire to return CNN to its origins also ignores the fact that even when it had the cable news field largely to itself up to the mid-1990s, the network still faced the question of how to draw large, enduring audiences during periods without a major breaking news story.
On CNBC on Wednesday, Brian Stelter, CNN’s former Reliable Sources host and media reporter who was let go by Licht last year, said, “I had an anchor say to me, ‘If you try to be all things to all people, you’re not anything to anybody.’ And that is the CNN challenge. It always has been, for 40 years, to try to just be the plain vanilla news. Well … people don’t want just plain vanilla.”
As a business, CNN has more symbolic importance than a major impact on WBD’s financials, accounting for less than 10% of overall revenue. During the roller-coaster ride of Licht’s stewardship, Wall Street focused far more on the fate of Max, DC, live sports and advertising than it did on the news business.
In its report last month of first-quarter 2023 financials, the company said distribution revenue slipped 3% on a pro-forma basis from the same period in 2022, with cord-cutting a major culprit. Rates of decline for the pay-TV bundle are accelerating to record levels, with more than 2 million customers leaving the pay bundle in the first quarter, an ominous sign for CNN.
One comparison with Zucker-era CNN is stark: In 2016, the year Donald Trump beat Hillary Clinton in the race for president, 70% of households with a television paid for cable or satellite service, according to research firm S&P Global Market Intelligence. Today, that number has dipped below 40%.
CNN is estimated to post $1.75 billion in net operating revenue in 2023, compared to $1.77 billion in 2022 and $1.86 billion in 2021, according to S&P. The figures do not include CNN International or CNN en Espanol.
More so than advertising, distribution revenue is a key source of returns for CNN. Unlike general entertainment networks whose programming has migrated to streaming, the aborted experiment of CNN+ (the streaming service snuffed out by Zaslav in 2022) highlighted one of the dilemmas for any news network. Contracts with pay-TV operators preclude simply shifting their linear signals into streaming at a lower price point, which puts a significant ceiling on their audiences. One bright spot for WBD is that the vast portfolio of networks under the same tent since the merger of WarnerMedia and Discovery closed in April 2022 can boost CNN’s leverage with distributors over time.
The next CEO will have to try to boost ratings overall, a problem that is most pronounced in primetime, where some shows have lost to Newsmax on some nights. Last month, CNN averaged 494,000 viewers in primetime, a drop of 25% from the same month a year ago.
Inside the organization, the relationship with Zaslav and his team remains a central issue. Whether it’s Entelis or another choice as CNN’s leader, that person likely would want some kind of guarantee that as CEO they would be able to operate with a greater degree of independence. Licht was dogged throughout his tenure by the perception that he was carrying out Zaslav’s wishes, one industry insider noted. In fact, Licht, too, shared concerns over the direction of the network during the Zucker era and that it had pushed too hard on all things anti-Trump.
“CNN faces enormous challenges regardless of who is in charge — subscription and ad revenue declines, tumbling viewership, heightened competition and more,” said Eason Jordan, the CEO of Oryx Strategies and former CNN chief news executive and president of newsgathering and international networks.
“There’s no magic wand solution,” Jordan said. “Journalistically, CNN is the best. As a business, CNN’s profits will likely remain in decline. I will cheer on — and pity — CNN’s leadership.”
Entelis is joining Virginia Moseley, executive vice president of editorial, and Eric Sherling, executive vice president of U.S. programming, in leading CNN on an interim basis, along with David Leavy, one of Zaslav’s lieutenants, who will serve as COO.
Frank Sesno, the former CNN White House correspondent, anchor and Washington bureau chief, said that “the most important thing is to bring in leadership that understands what CNN’s mission is and understands what it takes to run a sprawling enterprise like this.” He called the position “one of the toughest jobs on the planet.”
But Sesno suggested that while Licht made a number of mistakes and admitted to doing so, the changes the CNN boss was seeking weren’t as dramatic as some were saying. “At the end of the day it was not a wholesale change to the enterprise, but a tonal change,” said Senso, who is director of strategic initiatives at George Washington University’s School of Media and Public Affairs. CNN continues to feature anchor commentary and punditry, even if it isn’t played up like it used to be, while Licht never banned personalities from calling out political figures for lying, he noted.
CNN has faced mid-course corrections before, Senso noted. He said that a problem for Licht was articulating his mission, which could have been that he was “turning down the temperature but not changing the thermostat.”
“If you want to make a tonal change, it does not seem like it should involve this much drama,” Sesno said.
Last weekend, hundreds of current and former CNN staffers met at the CNN Center in Atlanta to mark a milestone: As operations are scaled back in the city and the satellite infrastructure developed there no longer as crucial in the streaming era, the network is moving to smaller headquarters. Amazingly enough, many employees noted that as much as Licht’s tumultuous tenure generated headlines, they had avoided dwelling on it.
“It really felt like the end of an era,” said one attendee about the Atlanta gathering. The collective recognition was that the feeling of working for Ted Turner, who founded the network and then led it in swagger style, is not an experience that will ever be had again.
Dade Hayes contributed to this report.
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