MEDIA CNN chief Chris Licht has big ideas, but employees are nervous, and more job cuts are coming
KEY POINTS
- CNN CEO Chris Licht talked to CNBC about why he took the job, why he thinks some coverage of him has been “painfully inaccurate,” and how he’s hoping to restore a brand he says has been tarnished.
- Licht is in the process of “right-sizing” CNN, part of a broader effort to eliminate more than 1,000 jobs at parent company Warner Bros. Discovery before the end of the year, sources said.
- Licht finished a broad, six-month business review last week, sources said.
- Licht and his staff are aware of the nervousness among an employee base that’s been through several traumatic events in the past 18 months.
CNN CEO Chris Licht started conducting a business review of the news network when he agreed to take the job in April.
That evaluation wrapped up last week, according to people familiar with the matter, and CNN employees are about to find out Licht’s conclusions.
Licht faces many challenges at CNN. Like all cable news networks, the business is shrinking. CNN makes money off advertising and pay-TV subscriber fees. But as millions of Americans cancel traditional pay TV each year in favor of streaming services, CNN almost certainly can’t raise subscription rates at a fast enough clip to make up for declining viewer numbers.
CNN’s profit is set to drop below $1 billion this year for the first time since 2016, when Donald Trump was elected president. Parent company Warner Bros. Discovery’s valuation has nearly been cut in half this year as investors have lowered their expectations on global streaming subscriber growth and macroeconomic pressures have pressured advertising revenue.
Licht has been given a mandate from Warner Bros. Discovery CEO David Zaslav to transform CNN, which the network boss is internally referring to as a “right sizing” of the business. Many of Licht’s job cuts are still to come this year, according to people familiar with the matter, who asked not to be named because the decisions are private.
Hours after this story was published, Licht sent a memo to all staff confirming the end of his six-month business and signaling additional layoffs will be coming.
“There is widespread concern over the global economic outlook, and we must factor that risk into our long-term planning,” Licht wrote. “All this together will mean noticeable change to this organization. That, by definition, is unsettling. These changes will not be easy because they will affect people, budgets, and projects.”
Licht’s review is part of a larger effort spearheaded by Zaslav, who has told division heads throughout the company to rethink their units and find ways to cut costs. More than 1,000 people will be laid off by Warner Bros. Discovery before the end of the year, said the people, who asked not to be named because the discussions are private and ongoing. Warner Bros. Discovery has about 40,000 employees.
Licht doesn’t have a specific order to cut a certain amount of jobs or save a specific percentage of spending. But he’s planning to cut parts of CNN that he have become bloated over time, said the people. A CNN spokesperson declined to comment.
Some of the reductions have already happened. Licht has cut back on CNN’s audio division to eliminate unpopular podcasts. He’s shuttered CNN’s NFT marketplace. And his first job was to kill CNN+, the company’s fledgling streaming service strongly supported by former CNN head Jeff Zucker.
There have also been changes to the network’s content. In May, Licht told CNN’s TV production staff to stop overusing “Breaking News” banners. He’s altering CNN’s lineup one show at a time, starting with moving anchor Jake Tapper from 4 p.m. to 9 p.m. and shifting Don Lemon from 11 pm to co-host “CNN This Morning,” the network’s refurbished morning news show, along with Poppy Harlow and Kaitlan Collins. CNN’s new morning show debuts Nov. 1.
But Licht’s biggest challenge — more than accelerating profit or revenue or retooling his programming lineup or winning ratings battles over Fox News and MSNBC — may be to win the trust of his own employees.
“When [Zaslav] called and offered me the job, he told me what he was looking for out of CNN,” Licht said in a brief interview this month. “And I said, ‘That’s exactly the kind of network I would like to see.’ There’s no daylight between his vision for this network and my vision for this network. The only reason why I took this job is because it was him in charge. I thought, I can deliver this for him.”
Shifting from Zucker
Part of Licht’s challenge as the new leader of CNN is he’s not the old leader.
Jeff Zucker wasn’t just the head of CNN. He was the driving force of the network, involved in every decision of significance on a daily basis. He ran editorial calls, worked closely with every show’s anchors and producers, and provided daily feedback. He was beloved by many employees who appreciated his attention to detail and care for their careers. CNN media reporters Brian Stelter and Oliver Darcy called him “a singular figure in American media” the day after he resigned. His closest comparison, in terms of control over a cable news network, may have been the late Roger Ailes at Fox News.
Licht is purposefully leading CNN differently than Zucker. He’s avoiding saying what he thinks about individual show choices, according to people familiar with his leadership style. Licht has said in private meetings that he’s trying to empower executive producers and show producers to make decisions by themselves. He wants employees to hear marching orders from direct managers rather than him. That’s a significant change for show leaders who have been conditioned to wait for Zucker’s blessing before acting.
“I love the control room, and I love the feeling of sending a text and seeing it show up on screen 10 minutes later, but there’s so much happening that we’ll be paralyzed if everyone is waiting to hear from me,” said Licht. “That’s just not how I operate.”
Some employees haven’t been sure what to make of Licht’s hands-off style. They fear he’s evaluating them — which he has been. But Licht’s lack of feedback is also strategic. He may only be able to get his employees to trust him with time.
There’s also a hangover effect from the sudden collapse of CNN+, which Zucker pushed relentlessly as the future of the business. Hundreds of employees were hired only to lose their jobs or reapply elsewhere in the company. The streaming service served as a north star for the future of CNN. That’s suddenly gone, leaving an employee base confused about CNN’s future.
A new era
Licht’s approach isn’t the only thing changing. He wants CNN to cover stories more like a newspaper and less like Politico, according to people familiar with his thinking. That means more stories that an average family would discuss around the dinner table and less obsessive focus on politics. He’d like to cover more business, technology and even sports, said the people, who asked not to be named because the discussions were private.
That’s particularly important for moments in time that aren’t dominated by crises. One of Licht’s major complaints with CNN in recent years has been the network’s tendency to hover in outrage, said the people. Pushing conversations to the extreme on a topic such as a new coronavirus mutation may make for compelling television, but if Americans are moving forward with their days and not even speaking about it, it’s not right for CNN, said the people.
Licht is already contemplating how to cover Trump if he runs for president again in 2024. Licht hasn’t told anchors or reporters to become more centrist, contrary to popular belief, according to people familiar with his conversations with talent. He does want viewpoints from both sides of the political divide to appear on CNN. But he won’t stand for guests who push disinformation, he said.
“The analogy I love to use is some people like rain, some people don’t like rain. We should give space to that. But we will not have someone who comes on and says it’s not raining,” Licht said.
This will require CNN anchors, reporters and bookers to steer guests into topics they’re qualified to speak about. CNN won’t ban guests who have supported the false claim that the 2020 election was stolen, but the network will attempt to keep conversations with those people in safe zones of truth, said people familiar with Licht’s thinking.
The analogy I love to use is some people like rain, some people don’t like rain. We should give space to that. But we will not have someone who comes on and says it’s not raining.Chris LichtCEO OF CNN
The idea Licht would steer CNN toward the political right is somewhat ironic – and wrong, Licht said – given that he credits then-Vice President Joe Biden with saving his life in 2010. Licht had a cerebral hemorrhage that nearly killed him when he was 38. At the time, he was producing NBC’s “Morning Joe.” Biden helped find a top neurosurgeon for Licht at the behest of “Morning Joe” co-host Mika Brzezinski. Licht would eventually write a book about the incident and how it shaped it life, titled “What I Learned When I Almost Died.” The Daily Beast asked Licht in 2011 how he would fight off criticism from conservatives who believed Biden’s intervention in his care may bias him toward a Democratic agenda.
Rather than pushing politics, Licht has told anchors he’s looking for authenticity on air. That attitude is what prompted him to center the network’s primetime lineup around Tapper. Licht pushed Stephen Colbert to tap into his real personality as host of CBS’ “The Late Show With Stephen Colbert,” CNN content chief Ryan Kadro told CNBC earlier this year.
But Tapper’s show has struggled out of the gate, consistently losing to his competition for total audience to MSNBC’s “Alex Wagner Tonight” and Fox News’ “Hannity.” CNN executives are writing off the early poor performance to Tapper experimenting with the form, saying he’s effectually doing a pilot show each night. But it’s possible primetime viewers aren’t looking for the same thing Licht wants — a no-nonsense host who steers clear of outrage.
Months of unease
CNN has about 4,500 employees. For them, the last 18 months have been rife with chaos and trauma.
CNN has been through a litany of destabilizing corporate events dating back to last May. That’s when AT&T announced it would merge WarnerMedia, then CNN’s parent company, with Discovery. Along with the transaction, Zaslav announced he’d replace Jason Kilar as WarnerMedia’s new CEO.
Mergers almost always cause change. But John Malone, a longtime Discovery shareholder who now sits on the combined company’s board, injected a jolt of uncertainty into CNN’s culture in a November interview with CNBC.
“I would like to see CNN evolve back to the kind of journalism that it started with, and actually have journalists, which would be unique and refreshing,” said the billionaire media mogul and longtime chairman of Liberty Media, which is a major shareholder in Warner Bros. Discovery.
The comments heightened anxiety for many CNN staffers, according to six people who were at the company at the time. If Malone didn’t think CNN had “actual” journalists, who were the nearly 1,000 reporters and editors around the world employed by CNN?
Initially, there was a sense CNN may avoid major layoffs or a strategic revamp because Zucker was longtime friends with Zaslav. Zucker believed he was in line to take an even bigger role at the company, according to people familiar with his thought process.
But Zucker abruptly resigned in February after failing to disclose an internal relationship with CNN chief marketing officer Allison Gollust. The shocking revelation arose from due diligence related to another CNN scandal — anchor Chris Cuomo losing his job after the network found he improperly advised his brother, then-N.Y. Gov. Andrew Cuomo, about how to handle a series of sexual harassment allegations.
Zucker’s departure would have been difficult to navigate under any circumstances given his outsized role. But it was particularly bad timing only three months before the merger, which would bring a brand new corporate leadership team.
The brutally short life of CNN+
Even worse, CNN was just months away from launching CNN+. Merger law didn’t allow Discovery to discuss strategy with CNN leadership. But CNBC reported immediately upon Zucker’s departure that Zaslav wasn’t sold on the idea of CNN+ as a standalone streaming service.
Still, without a directive to stop moving ahead with the launch, CNN+ head Andrew Morse kept pushing forward. CNN+ debuted on March 29, backed by $300 million of investment. On April 8, WarnerMedia officially merged with Discovery, putting Zaslav in charge. Less than two weeks later, WarnerMedia announced it would shut down CNN+. The streaming service lasted for 32 days.
Zaslav called in Licht about three weeks before his previously announced start date of May 1 to bless the death of CNN+. He had to inform hundreds of CNN employees they’d lose their jobs before he even officially started.
In August, Licht ended Sunday afternoon media show “Reliable Sources” and fired Stelter, who had years left on his contract. The decision was Licht’s, not Zaslav’s or Malone’s, according to people familiar with the matter. Last month, Licht let go CNN White House correspondent John Harwood, a former reporter and editor for CNBC.
Both Stelter and Harwood had been outspoken Trump critics. Given Malone’s comments, observers and employees have assumed Licht is surgically removing those who have colored the CNN brand as liberal over the past six years.
But Licht said that’s “painfully inaccurate.” Part of Licht’s decision to eliminate “Reliable Sources” was his belief media coverage was better served digitally on CNN.com rather than dedicating a one-hour Sunday show to it, as he explained in a response to a column by former U.S. Secretary of Labor Robert Reich.
Still, Stelter wasn’t offered a chance to stay at CNN in any capacity, even as a digital media reporter, according to people familiar with the matter. There’s clear signaling benefit to those turned off by CNN by quickly moving on from those who gained recognition for being anti-Trump. And Licht doesn’t run from the idea that CNN’s brand was tarnished during the Trump years.
“The brand is the most trusted brand in the world when it comes to journalism, right up there with the BBC,” Licht said. “I think what happened a little bit here in the past was it’s easy to take the quick sugar high of ratings and outrage. So, I’m trying to do no harm to a great brand.”
Investing in digital
A merger, a sudden CEO departure, an immediate end to a digital streaming service, hundreds of layoffs, and the prospect of more to come – it’s no wonder CNN’s workforce is walking on eggshells, a fact Licht and his team have privately acknowledged.
Licht relies on a fairly tight inner circle of CNN veterans and new hires for strategic decisions. He’s brought in Kadro, head of strategy Chris Marlin and head of communications Kris Coratti in recent months, while elevating Virginia Moseley to head of editorial. Amy Entelis, Michael Bass and Ken Jautz also remain at CNN in key roles — the trio asked to run the network after Zucker departed.
Licht has been a TV producer his entire professional life, starting in 1995 at KNBC in Los Angeles. In 2007, he took his first national job, helping to create “Morning Joe” for MSNBC. He left that role in 2011 to be the vice president of programming at CBS News and the executive producer of “CBS This Morning.” In 2016, Licht made the unusual shift from news to comedy, taking on an executive producing job at CBS’ “The Late Show with Stephen Colbert.”
Licht plans to ramp up investment in CNN.com, which his team feels has been mismanaged because all of the digital money and effort went to CNN+, the people said. But he’ll have to do it as Warner Bros. Discovery is trying to cut costs.
CNN is upgrading its behind-the-scenes content management system, or CMS, and its digital video player, which will bring incremental redesigns to CNN.com, according to people familiar with the matter. CNN.com draws more than 180 million monthly unique viewers, making it one of the world’s most popular news sites. The changes should also bring workflow alignments to CNN digital and linear, which should help both entities’ content and organization.
While digital isn’t Licht’s background, he’s worked in recent months to learn more about it, according to people familiar his discussions. CNN still hasn’t named a chief digital officer, although the company’s job posting now says it’s filled. Sources said a deal is nearly done and an announcement will come soon.
CNN’s near-term future is similar to that of Fox News and MSNBC — survive as a subscriber fee-collecting cable network for as long as possible. It’s far more likely to show up as part of the company’s bundled streaming service than a standalone news service. This was a major concern of Kilar and Zucker, who believed CNN would get buried in a large streaming service, built to recommend the latest movies and hit TV series instead of news.
But while Zucker and Kilar were intent on investing in CNN’s future now, Licht’s focus mirrors Zaslav’s: keep cable subscriber fees flowing. Like other division leaders at Warner Bros. Discovery, Licht’s focus is increasing profitability. For now, that means old school television – winning time slots, boosting advertising and throwing his energy into improving CNN’s linear cable news network for U.S. and international audiences.
Disclosure: Comcast’s NBCUniversal is the parent company of MSNBC and CNBC.
WATCH: What contributed to the collapse of CNN+
Comments
Post a Comment