Chris Licht, Chairman and CEO, CNN Worldwide, speaks onstage in the course of the Warner Bros. Discovery Upfront 2023 at The Theater at Madison Square Garden on May 17, 2023 in New York City.
Kevin Mazur | Getty Images Entertainment | Getty Images
Warner Bros. Discovery CEO David Zaslav might have chosen from a litany of causes to fireplace Chris Licht as CNN’s chief.
Licht, who left the community Wednesday after simply over a 12 months within the function, struggled with management type, lifting morale, programming selections, methods to cowl former President Donald Trump and, finally, hubris.
But Licht’s whole tenure at CNN might have turned out in a different way had he persuaded Zaslav to maintain CNN+.
That might sound absurd. Hardly anybody watched CNN+ throughout its first two weeks of existence final 12 months. Zaslav and several other different Discovery executives, together with present Warner Bros. Discovery head of streaming JB Perrette and now-CNN Chief Operating Officer David Leavy, had been skeptical of spending tons of of thousands and thousands of {dollars} on area of interest or half-baked content material concepts like “Jake Tapper’s Book Club” and “Parental Guidance with Anderson Cooper.” Leavy is now a part of the chief crew that may assist Zaslav discover a new CEO.
Zaslav thought CNN+ was a waste of assets for a corporation saddled with $50 billion of debt that wanted to spice up free money stream and generate $3 billion in merger-related synergies. But earlier than he made any selections, he needed to listen to Licht’s ideas.
Licht was supposed to start his job May 2, 2022, however he began a number of weeks early to weigh in on CNN+. In a number of digital conferences, he met with CNN+ head Andrew Morse, CNN+ common supervisor Alex MacCallum and CNN Chief Tech Officer Robyn Peterson, in keeping with individuals conversant in the matter. Perrette and Discovery streaming CFO Neil Chugani (who would turn into CNN’s CFO) had been additionally there.
Licht expressed his skepticism with the product’s programming, in keeping with individuals within the assembly. The dialogue centered across the viability of providing a product named after CNN with out really that includes a reside feed of the community’s cable programming. Perrette advised the CNN+ management to pause all advertising spending and to not launch on Roku.
While the CNN+ crew got here away from the conferences assuming the streaming service would doubtless be killed, they despatched financials to Discovery’s management. They budgeted to spend $440 million in 2022 and $550 million in 2023, the individuals stated. The proposal known as for CNN+ to show a revenue by 2025 and break even on the cumulative funding by 2028.
Less than three weeks later, CNN+ was lifeless. A Warner Bros. Discovery spokesperson declined to touch upon the small print of the conferences.
CNN+ alternate actuality
Had Licht persuaded the Discovery executives to maintain CNN+, it is doable his tenure at CNN would have developed in a different way.
Licht’s background is present producing. He launched “Morning Joe” on MSNBC and jumpstarted “Late Night with Stephen Colbert” on CBS. CNN+ would have given him a canvas to create exhibits from scratch. It additionally would have given him a progress story to pitch to the press and traders. If further spending wasn’t within the playing cards, he might have slashed the finances however stored the bones of the subscription product alive, iterating on artistic concepts till he landed on one thing that labored. CNN+ launched at $4.99 per 30 days, although pricing might have been adjusted.
Former CNN head Jeff Zucker, who left the community after disclosing a office relationship simply months earlier than the WarnerMedia-Discovery merger, had aspirations about turning CNN+ right into a New York Times-like subscription product. That would have taken years, but it surely additionally may need given workers and administration a north star. Attention on CNN+ might have been a ready-made distraction from falling linear TV scores, which Licht might have dismissed as comparatively unimportant in contrast with constructing the corporate’s future.
Jeff Zucker, left, and David Zaslav
Chris Kleponis | Bloomberg through Getty Images; CNBC
Without CNN+, Licht was left with a foundering cable TV community and no coherent digital technique. That’s anathema to a contemporary media firm.
In his 12 months on the job, Licht laid off tons of of workers and principally shifted round present CNN anchors and reporters to construct a brand new morning present and prime-time programming. His experiment to maneuver prime-time anchor Don Lemon to the morning failed. CNN fired Lemon in April. Licht tried to maneuver Tapper, a day anchor, to prime time, however the early scores weren’t good, and Licht scrapped his plans.
A brand new chief with imaginative and prescient
In Licht’s protection, his lack of future technique echoed Zaslav’s restricted imaginative and prescient.
“When [Zaslav] called and offered me the job, he told me what he was looking for out of CNN,” Licht advised CNBC final 12 months. “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.”
Zaslav advised Licht he needed to make CNN much less of an advocacy community and extra of a straight information community. Warner Bros. Discovery board member John Malone advised CNBC in 2021 he’d “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.”
But CNN journalists argued this was a straw man. They claimed they weren’t advocating for something apart from reality. Several took offense to Malone’s feedback as a slight to their journalistic abilities.
CNN can change the tone of its programming round Trump, who’s the front-runner for the 2024 Republican presidential nomination. It can tone down hyperbole and rhetoric round his lies and exaggerations, relying on the state of affairs.
Still, that is not a enterprise technique. CNN+ might have been doomed to be nothing greater than a fledgling streaming service. But it represented hope for a way a model might transition towards the long run. A profitable chief of CNN might want to determine a strategy to increase scores with compelling programming whereas additionally fostering new digital companies that usher in income and youthful audiences.
It’s doable CNN+ would have by no means taken off, and Licht would have spent the previous 12 months doubling down on a flawed idea that his Discovery bosses by no means preferred — which in all probability would have led to his firing anyway. Investors thumbed their nostril at elevated spending on streaming companies final 12 months, so any plan round CNN+ wanted to emphasise its long-term attraction.
The drawback was with out CNN+, Licht held a weak hand. CNN’s revenue fell in 2022 to about $750 million (together with $200 million in CNN+ losses) from $1.25 billion the earlier 12 months on a weak promoting market and declining cable subscription charges, in keeping with The New York Times. Advertising income at CNN dropped almost 40% below Licht, The Daily Beast reported, citing MediaRadar knowledge.
The 2024 election and a extra strong political advert market ought to assist CNN’s financials enhance subsequent 12 months, however “wait for 2024” is not a robust message — and it does not present an answer for 2025 and past.
If Zaslav desires to discover a CEO that may win the hearts and minds of workers and increase the highest and backside traces, he’ll want to search out somebody with a extra holistic technique than simply programming for a 55-and-older cable TV viewers.
In that means, Licht was doomed from the beginning.
Correction: Robyn Peterson was chief tech officer of CNN. An earlier model misstated his title. Neil Chugani was CFO of Discovery streaming. An earlier model misspelled his identify.
WATCH: Chris Licht’s tumultuous tenure
Source: www.cnbc.com”