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CNN seeks new CEO and business strategy after Licht resigns

CNN Worldwide Chairman and CEO Chris Licht speaks on stage at Warner Bros. Discovery Upfront 2023 at The Theater in Madison Square Garden, New York City, May 17, 2023.

Kevin Mazur | Getty Images Entertainment | Getty Images

warner bros discovery CEO David Zaslav could have chosen among many reasons to fire CNN head Chris Licht.

who is lich left the network on wednesday In just over a year in office, he struggled with leadership style, morale, program decisions, and how to cover for the former president. donald trump And finally, overconfidence.

But Licht’s entire tenure at CNN might have been different had Licht persuaded Zaslav to keep CNN+.

It may sound absurd. Few people watched CNN+ Last year, during the first two weeks of existence. Zaslav and several other Discovery executives, including current head of streaming at Warner Bros. Discovery, JB Perrette, and current CNN chief operating officer, David Leavy, are niche or I was skeptical about spending hundreds of millions of dollars on half-baked content ideas. “Jake Tupper’s Book Club” and “Parental Guidance by Anderson Cooper.” Leavy is now part of the executive team helping Zaslav find a new CEO.

Zaslav I thought CNN+ was a waste of resources For companies with $50 billion in debt, free cash flow needs to increase, generate $3 billion merger-related synergies; But before deciding anything, he wanted to hear Licht’s thoughts.

Licht was due to start work on May 2, 2022, but started a few weeks earlier to join CNN+. At multiple virtual meetings, he met with CNN+ head Andrew Morse, CNN+ general manager Alex McCallum and CNN chief technology officer Robin Peterson, according to people familiar with the matter. Perrette and Discovery Streaming CFO Neil Chugani (who later became CNN’s CFO) were also present.

Licht expressed skepticism about programming the product, people familiar with the meeting said. Discussions centered around the feasibility of offering a product named after CNN without actually featuring a live feed of the network’s cable programming. Perrette has instructed CNN+ executives to pause all marketing spending and not launch Roku.

The CNN+ team left the meeting assuming the streaming service would probably be discontinued, but sent a financial report to Discovery executives. The company was budgeting for $440 million in 2022 and $550 million in 2023, according to people familiar with the matter. The proposal calls for CNN+ to be profitable by 2025 and breakeven on cumulative investment by 2028.

Less than three weeks later, CNN+ was dead. A spokeswoman for Warner Bros. Discovery declined to comment on details of the meeting.

CNN+ Alternate Reality

Jeff Zucker (left) and David Zaslav

Chris Creponis | Bloomberg via Getty Images. CNBC

Without CNN+, Licht would be left without a burgeoning cable TV network and a consistent digital strategy. That’s an abomination for modern media companies.

In his first year in office, Licht laid off hundreds of employees and shifted around existing CNN anchors and reporters to build new morning and primetime programming. His experiment with moving primetime anchor Don Lemon into the morning failed. CNN fires Lemon in April. Licht tried to move afternoon anchor Tupper to primetime, but Initial reviews were not goodLicht abandoned the plan.

A new leader with a vision

In Licht’s defense, his lack of future strategy reflected Zaslav’s limited vision.

“when [Zaslav] Licht told CNBC last year, “When I called and got the job offer, he told me what he wanted from CNN. And I was like, ‘That’s exactly what I want to see. It’s the kind of network that I think of,'” he said. There is no light between his vision of this network and my vision of this network. The only reason I took this job is because he was in charge. I thought I could get this to him. ”

Zaslav told Licht that he wanted To make CNN not an advocacy network And a straighter news network.Warner Bros. Discovery Board Member John Malone told CNBC in 2021. He said, “I want CNN to evolve back to journalism as it was supposed to be and have real journalists, so it will be unique and fresh.”

But CNN journalists claimed it was a straw doll. They claimed they were not claiming anything other than the truth. Some were offended by Malone’s comments as a disrespect to their journalistic abilities.

CNN could change the tone of the show around Trump, the frontrunner for the 2024 Republican presidential nomination. Exaggerations and rhetoric about his lies and exaggerations can be tempered, depending on the circumstances.

Still, it’s not a business strategy. CNN+ may have been destined to be just a fledgling streaming service. But it expressed hope for how the brand could move towards the future. Successful leaders at CNN must find ways to drive viewership with engaging programming while cultivating new digital businesses that bring in revenue and a younger audience.

It’s also possible that CNN+ hasn’t taken off, and Licht has spent the past year working hard to develop a flawed concept that his Discovery bosses never liked, and in any case, that’s probably what he’s doing. would have resulted in dismissal. Investors gasped at increased spending on the streaming service last year, so plans for CNN+ had to highlight its long-term appeal.

The problem was that there was no CNN+, and Licht had a weak hand. CNN’s 2022 earnings fell to about $750 million (including a $200 million loss from CNN+) from $1.25 billion the year before due to a sluggish advertising market and falling cable subscription fees. According to the New York Times. CNN advertising revenue decreased by nearly 40% Under Licht, the Daily Beast reported, citing media radar data.

The 2024 election and a stronger political advertising market should help CNN improve its finances next year, but “wait for 2024” isn’t a strong message, nor does it offer a solution for 2025 and beyond.

If Mr. Zaslav wants to find a CEO who will win the hearts and minds of his employees and drive sales and revenue, he needs someone with a more holistic strategy than just programming for cable TV audiences 55 and older. you’ll have to find out.

In this way, Licht was destined from the beginning.

WATCH: Chris Licht’s eventful tenure

Media stocks rise after CNN CEO Chris Licht steps down

Summarize this content to 100 words CNN Worldwide Chairman and CEO Chris Licht speaks on stage at Warner Bros. Discovery Upfront 2023 at The Theater in Madison Square Garden, New York City, May 17, 2023. Kevin Mazur | Getty Images Entertainment | Getty Imageswarner bros discovery CEO David Zaslav could have chosen among many reasons to fire CNN head Chris Licht.who is lich left the network on wednesday In just over a year in office, he struggled with leadership style, morale, program decisions, and how to cover for the former president. donald trump And finally, overconfidence.But Licht’s entire tenure at CNN might have been different had Licht persuaded Zaslav to keep CNN+.It may sound absurd. Few people watched CNN+ Last year, during the first two weeks of existence. Zaslav and several other Discovery executives, including current head of streaming at Warner Bros. Discovery, JB Perrette, and current CNN chief operating officer, David Leavy, are niche or I was skeptical about spending hundreds of millions of dollars on half-baked content ideas. “Jake Tupper’s Book Club” and “Parental Guidance by Anderson Cooper.” Leavy is now part of the executive team helping Zaslav find a new CEO.Zaslav I thought CNN+ was a waste of resources For companies with $50 billion in debt, free cash flow needs to increase, generate $3 billion merger-related synergies; But before deciding anything, he wanted to hear Licht’s thoughts.Licht was due to start work on May 2, 2022, but started a few weeks earlier to join CNN+. At multiple virtual meetings, he met with CNN+ head Andrew Morse, CNN+ general manager Alex McCallum and CNN chief technology officer Robin Peterson, according to people familiar with the matter. Perrette and Discovery Streaming CFO Neil Chugani (who later became CNN’s CFO) were also present.Licht expressed skepticism about programming the product, people familiar with the meeting said. Discussions centered around the feasibility of offering a product named after CNN without actually featuring a live feed of the network’s cable programming. Perrette has instructed CNN+ executives to pause all marketing spending and not launch Roku.The CNN+ team left the meeting assuming the streaming service would probably be discontinued, but sent a financial report to Discovery executives. The company was budgeting for $440 million in 2022 and $550 million in 2023, according to people familiar with the matter. The proposal calls for CNN+ to be profitable by 2025 and breakeven on cumulative investment by 2028.Less than three weeks later, CNN+ was dead. A spokeswoman for Warner Bros. Discovery declined to comment on details of the meeting.CNN+ Alternate RealityHis tenure at CNN might have played out differently if Licht had persuaded Discovery executives to keep CNN+.Licht’s background is show production. He launched ‘Morning Joe’ on his MSNBC and ‘Late Night with Stephen Colbert’ on CBS. CNN+ would have given him a canvas to create the show from scratch. It would also have given him a growth story to pitch to the press and investors. Had it not been for the additional expense, he might have cut back on the budget while keeping the subscription product’s bones alive, iterating on creative ideas until he found one that worked. CNN+ started at $4.99 per month, but the price is subject to adjustment.Former CNN chief Jeff Zucker, who left the network a few months before the WarnerMedia-Discovery merger, revealing a working relationship, said: had aspirations about Turn CNN+ into a subscription service like The New York Times. It would have taken years, but we could have given our employees and management the north star. The attention to CNN+ may have been staged as a distraction from declining terrestrial television ratings, which Licht may have dismissed as relatively unimportant compared to building the company’s future. .Jeff Zucker (left) and David ZaslavChris Creponis | Bloomberg via Getty Images. CNBCWithout CNN+, Licht would be left without a burgeoning cable TV network and a consistent digital strategy. That’s an abomination for modern media companies.In his first year in office, Licht laid off hundreds of employees and shifted around existing CNN anchors and reporters to build new morning and primetime programming. His experiment with moving primetime anchor Don Lemon into the morning failed. CNN fires Lemon in April. Licht tried to move afternoon anchor Tupper to primetime, but Initial reviews were not goodLicht abandoned the plan.A new leader with a visionIn Licht’s defense, his lack of future strategy reflected Zaslav’s limited vision.”when [Zaslav] Licht told CNBC last year, “When I called and got the job offer, he told me what he wanted from CNN. And I was like, ‘That’s exactly what I want to see. It’s the kind of network that I think of,'” he said. There is no light between his vision of this network and my vision of this network. The only reason I took this job is because he was in charge. I thought I could get this to him. ”Zaslav told Licht that he wanted To make CNN not an advocacy network And a straighter news network.Warner Bros. Discovery Board Member John Malone told CNBC in 2021. He said, “I want CNN to evolve back to journalism as it was supposed to be and have real journalists, so it will be unique and fresh.”But CNN journalists claimed it was a straw doll. They claimed they were not claiming anything other than the truth. Some were offended by Malone’s comments as a disrespect to their journalistic abilities.CNN could change the tone of the show around Trump, the frontrunner for the 2024 Republican presidential nomination. Exaggerations and rhetoric about his lies and exaggerations can be tempered, depending on the circumstances.Still, it’s not a business strategy. CNN+ may have been destined to be just a fledgling streaming service. But it expressed hope for how the brand could move towards the future. Successful leaders at CNN must find ways to drive viewership with engaging programming while cultivating new digital businesses that bring in revenue and a younger audience.It’s also possible that CNN+ hasn’t taken off, and Licht has spent the past year working hard to develop a flawed concept that his Discovery bosses never liked, and in any case, that’s probably what he’s doing. would have resulted in dismissal. Investors gasped at increased spending on the streaming service last year, so plans for CNN+ had to highlight its long-term appeal.The problem was that there was no CNN+, and Licht had a weak hand. CNN’s 2022 earnings fell to about $750 million (including a $200 million loss from CNN+) from $1.25 billion the year before due to a sluggish advertising market and falling cable subscription fees. According to the New York Times. CNN advertising revenue decreased by nearly 40% Under Licht, the Daily Beast reported, citing media radar data.The 2024 election and a stronger political advertising market should help CNN improve its finances next year, but “wait for 2024” isn’t a strong message, nor does it offer a solution for 2025 and beyond.If Mr. Zaslav wants to find a CEO who will win the hearts and minds of his employees and drive sales and revenue, he needs someone with a more holistic strategy than just programming for cable TV audiences 55 and older. you’ll have to find out.In this way, Licht was destined from the beginning.WATCH: Chris Licht’s eventful tenure
https://www.cnbc.com/2023/06/08/cnn-seeks-new-ceo-business-strategy.html CNN seeks new CEO and business strategy after Licht resigns

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