August 8, 2022

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Profits Slump at CNN as Ratings Plummet

2 min read

One of the first moves the newly formed Warner Bros. Discovery made when it took over CNN was shutting down CNN+, the nascent streaming service that was touted as the network’s bridge to the future.

The next month, when Chris Licht took over as CNN’s chairman, he told employees in his first town hall meeting not to worry about ratings, a mainstay of TV news used as a benchmark for revenue and relevance.

Now, three months into Mr. Licht’s tenure, the network finds itself facing big questions about how it can continue to expand its business with its moonshot streaming service dead and the traditional TV business in structural decline.

Projections from S&P Global Market Intelligence say CNN’s profitability is on a pace to decline to $956.8 million this year. That would mark the first time since 2016 that the network had dipped below $1 billion in profit, according to three people familiar with its operations.

Two people familiar with CNN’s operations said the network’s initial 2022 profitability target was $1.1 billion, which Mr. Licht is on track to miss by more than $100 million. But another person familiar with the matter said that by the accounting of company executives, Mr. Licht was on track to meet a profitability target of roughly $950 million for the year, since the network’s initial budget didn’t account for losses associated with launching the CNN+ streaming service.

However the numbers are crunched, inside CNN the hunt is on for new revenue. To help solve the financial puzzle, Mr. Licht has tapped Chris Marlin, a longtime friend who was recently an executive at the Florida home builder Lennar. Mr. Marlin — whom some CNN employees have taken to calling “Fish Man,” a takeoff on his surname — had no experience operating a cable news network, having worked at the law firms Foley & Lardner and Holland & Knight.

Mr. Marlin has floated a variety of revenue-generating ideas since joining CNN, including striking advertising deals with major…

Benjamin Mullin

2022-08-02 14:33:11

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