CNN seeks new CEO, business strategy after Licht departure

Discovery Warner Brothers CEO David Zaslav could have chosen from a range of reasons to fire Chris Licht as CNN president.

Licht, who left the network Wednesday after just over a year in the job, struggled with leadership style, morale boosting, programming decisions, how to cover former President Donald Trump and, ultimately, Arrogance.

But Licht’s full tenure at CNN might have turned out differently had he persuaded Zaslav to keep CNN+.

That may sound silly. Hardly anyone watched CNN+ for the first two weeks of its existence last year. Zaslav and several other Discovery executives, including the head of Warner Bros. Discovery broadcast current JB Perrette and CNN’s current chief operating officer David Levy, skeptical of spending hundreds of millions of dollars on niche or half-baked content ideas like Jake Tapper’s Book Club and “Parental Counseling with Anderson Cooper.” Leavy is now part of the executive team that will help Zaslav find a new CEO.

Zaslav thought CNN+ was a waste of resources for a $50 billion indebted company that needed to boost its free cash flow and Generating $3 billion In areas of synergy associated with the merger. But before he made any decisions, he wanted to hear Licht’s thoughts.

Licht was supposed to start his job on May 2, 2022, but he started a few weeks early to comment for CNN+. At several virtual conferences, he met with CNN+ President Andrew Morse, CNN+ General Manager Alex MacCallum and CNN Chief Technology Officer Robyn Peterson, according to people familiar with the matter who declined to be identified due to the private nature of the conversations. There was also Perrette and Discovery streaming CFO Neil Chugani (who would become CNN’s CFO).

Licht expressed doubts about the product’s programming, according to people at the meeting. The discussion centered on the feasibility of offering a product called CNN without showing a direct feed of network cable programming. Perrett told CNN+ leadership to pause all marketing spending and not launch it on Roku.

While the CNN+ team walked out of the meetings assuming the streaming service was likely to be killed, they sent the money to Discovery leadership. People said they budgeted to spend $440 million in 2022 and $550 million in 2023. The proposal called for CNN+ to be profitable by 2025 and break even on cumulative investment by 2028.

Less than three weeks later, CNN+ is dead. A Warner Bros. spokesperson declined. Discovery Comment on meeting details.

Had Licht convinced Discovery executives to keep CNN+, his tenure at CNN could have turned out differently.

Licht’s background is producing the show. He launched “Morning Joe” on MSNBC and launched “Late Night with Stephen Colbert” on CBS. CNN+ would give him the canvas to create shows from scratch. It would also have given him a growth story to show to the press and investors. If extra spending wasn’t in the cards, he might have been able to cut the budget while keeping the bones of the subscription product alive, iterating on creative ideas until he came up with something that worked. CNN+ launched at $4.99 per month, though pricing can be adjusted.

Former CNN chief Jeff Zucker, who left the network after revealing a workplace affair just months before the WarnerMedia-Discovery merger, He had aspirations about Turning CNN+ into a New York Times-like subscription product. This could have taken years, but it will probably give the staff and management a North Star. The attention on CNN+ would have been a ready distraction from linear TV’s ratings decline, which Licht would have dismissed as relatively unimportant compared to building the company’s future.

In his year on the job, Licht laid off hundreds of employees and mostly turned around existing CNN anchors and reporters to build a new morning show and prime-time programming. His experiment to move prime-time anchor Don Lemon to mornings failed. CNN launched Lemon in April. Licht tried to move Tapper, the afternoon announcer, to prime time, but Early reviews were not good And Tapper wanted to keep his time slot, so Licht canceled his plans.

Zaslav told Licht he wanted To make CNN less of an advocacy network And more live news network. Warner Bros. Discovery board member John Malone told CNBC in 2021 that he “would like to see CNN evolve back into the kind of journalism it started with, already have journalists, which would be unique and refreshing.”

But CNN journalists argued that this was a straw man. They claimed that they did not stand for anything other than the truth. Many of them took Malone’s comments as an insult to their journalistic skills.

CNN could change the tone of its programming about Trump, the front-runner for the 2024 Republican presidential nomination. It could tone down the hyperbole and gossip about his lies and exaggerations, depending on the situation.

However, this is not a working strategy. CNN+ may have been doomed to be nothing more than a fledgling streaming service. But it represents hope for how the brand can move into the future. The successful leader of CNN will need to figure out a way to increase ratings with compelling programming while also promoting new digital businesses that bring in revenue and younger audiences.

CNN+ probably never would have taken off, and Licht had spent the past year doubling down on a flawed concept Discovery bosses never liked — and which probably would have led to his sacking anyway. Investors liked the increased spending on streaming services last year, so any plan around CNN+ needs to underscore its long-term attractiveness.

The problem was without CNN+, Licht was holding a weak hand. CNN’s 2022 earnings fell to about $750 million (including $200 million in CNN+ losses) from $1.25 billion a year earlier on a weak advertising market and declining cable subscription fees, According to The New York Times. CNN advertising revenue dropped nearly 40% Under Licht, The Daily Beast reported, citing MediaRadar data.

The 2024 election and a stronger political ad market should help CNN’s finances improve next year, but “wait for 2024” isn’t a strong message — nor does it provide a fix for 2025 and beyond.

If Zaslav wants to find a CEO who will win the hearts and minds of employees and boost the bottom line, he’ll need to find someone with a more inclusive strategy than just programming for a cable TV audience of 55 and older.

In this way, Licht was doomed from the start.

Correction: Robin Peterson was CNN’s chief technology officer. An earlier version misspelled its title. Neil Chogani has served as Discovery’s Chief Financial Officer. An earlier version misspelled his name.

Watch: Chris Licht’s Turbulent Period