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Under new leadership, CNN will soon be seeing a major transformation

Rodney Ho – The Atlanta Journal-Constitution (TNS)

Mark Thompson, the man who spearheaded the successful transformation of The New York Times into a profitable and growing digital operation, is hoping to do the same with the embattled CNN brand.

Last week, the new CNN chief executive officer announced a major reorganization and strategy shift that will likely move resources away from the primary cable TV channel to accelerate digital growth. But he faces substantial headwinds.

Thompson, who also helped modernize the BBC in the 2000s, came to CNN last fall to repair a news organization that endured two years of migraine-inducing change. First, beloved leader Jeff Zucker in 2022 was fired for failing to disclose a romantic relationship with a subordinate. Then employees endured the rocky 13-month tenure of Chris Licht, who made a series of ill-begotten moves that caused CNN’s reputation, revenue, profits and morale to plummet.

CNN also faces a cable TV business in rapid decline as viewers steadily move to streaming. And CNN’s parent company Warner Bros. Discovery remains saddled with debt, making any significant investment in CNN challenging.

Still, in a memo to staff last week outlining his plans, Thompson painted an optimistic vision for the future.

“We need to recapture some of the swagger and innovation of the early CNN,” Thompson wrote to CNN’s worldwide staff of 4,000, including around 1,000 Atlanta-based employees. “It’s time for a new revolution.”

A digital future 

One key move was the return of well-regarded media executive Alex McCallum to serve as executive vice president of digital products and services. She worked with Thompson at the Times for years, improving the news operation and creating successful subscription-based cooking and games apps.

McCallum joined CNN in 2021 as chief product officer and was one of the architects of the short-lived CNN+ subscription service, which was designed to give CNN a fighting chance in the streaming space in terms of revenue generation. Licht and Discovery executives killed the product a week after it launched, applying the savings to reduce the parent company’s debt, leaving CNN without a digital roadmap. MacCallum opted to leave CNN shortly after CNN+ was shuttered and briefly served as chief revenue officer of The Washington Post before coming back to CNN.

Media reporter and author Brian Stelter, whom Licht fired from his post as host of CNN’s “Reliable Sources,” notes that McCallum’s return is perhaps a tacit admission of the strategic failures of the Licht era. “Within the news industry, MacCallum is seen as a superstar,” Stelter said. “Bringing her back is a logical move for CNN.”

The challenge for McCallum and Thompson will be to reintroduce the spirit of innovation pioneered by Ted Turner, who founded the cable news network in Atlanta in 1980. CNN needs to find new products to reach new audiences and find fresh revenue streams.

While praising CNN’s journalism and noting the unmatched reach of the network’s global linear and digital services, Thompson wrote, “there’s currently too little innovation and risk-taking. … CNN’s linear services and even its website can sometimes have an old-fashioned and unadventurous feel as if the world has changed and they haven’t.”

Thompson acknowledged that “technology may be disrupting our traditional revenue but it offers us many new opportunities to reach audiences and deliver the kind of quality journalism they will pay for.”

In an interview with The Wall Street Journal, Thompson said CNN’s future might not necessarily be another CNN+. “I’m not even sure that subscription is the right pathway for CNN,” Thompson said. “But I do think we need to start experimenting and exploring in the broader sense direct-to-consumer relationships and potentially direct-to-consumer paying relationships.”

Prior to Thompson’s arrival, CNN introduced a parallel live news feed, CNN Max, within Warner Bros. Discovery’s Max streaming service, which has become a major priority. Executives believed the product would deepen engagement on the Max platform, citing research from their experience with a news channel they operate in Poland.

Cable operators pay Warner Bros. Discovery for CNN’s on-air content for its subscribers. But CNN Max is airing CNN’s prime-time line-up, upsetting distributors like DirecTV, which wrote Warner Bros. Discovery suggesting CNN Max is violating its contract by giving away content DirecTV is paying for. Warner Bros. Discovery responded: “We believe this is additive and reaches an audience that the current pay TV marketplace does not reach.”

Thompson’s team 

Thompson’s memo also announced sweeping changes to the structure of his executive team while keeping many familiar faces from the Zucker era in key leadership positions.

He named CNN veteran Virginia Moseley to the new position of executive editor, consolidating all of the network’s global newsgathering operations under her. Moseley will now be the leader driving CNN’s news teams domestically and internationally across all platforms. Mike McCarthy, the former head of CNN international who has been with the network for more than 20 years, will serve as Moseley’s deputy. McCarthy is the network’s senior-most editorial leader based in Atlanta.

“As far as possible we want single integrated teams to cover stories for all platforms,” Thompson wrote in his memo.

Thompson also announced plans to reboot the network’s highly acclaimed CNN original series and films group under Amy Entelis. The group was responsible for Emmy-winning productions such as “Anthony Bourdain’s Parts Unknown,” “Searching for Italy with Stanley Tucci,” “RBG” and “Navalny.” Licht shut down the group early in his tenure.

Eric Sherling, a programming executive under Zucker and Licht, will continue to serve as CNN’s head of programming.

CNN’s business operations will continue to be led by chief operating officer David Leavy, who came from Discovery. Ken Jautz, who has held executive roles with CNN since 2001, will report to Leavy as executive vice president of operations.

CNN’s Atlanta exodus 

Over the past 20 years, CNN’s presence in Atlanta has shrunken steadily with most on-air talent and top-level managers now working from New York. Three Atlanta-based executives report directly to Thompson: general counsel David Vigilante, chief financial officer Adam Cohn and Johnita Due, vice president of integrity and inclusion.

Thompson’s leadership changes are also happening as CNN has shifted its Atlanta employees from the once-iconic CNN Center in downtown Atlanta to new space at the Midtown Ted Turner campus. A former tourist attraction, CNN Center was sold by CNN’s former parent AT&T in 2021 to two Florida real estate firms that plan to remake the entire building. It now sits largely empty, although the giant CNN signs remain atop and in front of the building. A CNN spokeswoman said CNN Center won’t be entirely cleared out until the middle of the year.

There are concerns that Thompson’s plans may further reduce the network’s footprint in Atlanta, where many cable network production staffers are still based.

CNN’s core network, which Thompson dubbed “one of the jewels in our crown,” still generates substantially more revenue and profit than the company’s other operations. Under Zucker’s leadership, CNN invested heavily in the cable network, which experienced ratings success, particularly during the Donald Trump years.

During the Zucker era, CNN produced record profits, exceeding $1 billion each year between 2016 and 2020, according to estimates from media research group Kagan. 

But Thompson faces a world where CNN’s ratings and profits have tumbled.

His memo implied a shrinkage of the network’s TV side staffing.

“Expect to see us also looking hard at how best to put our TV production machine on a sustainable footing without weakening either the caliber of our journalism or the distinctiveness of our output,” he wrote.

For Thompson, the clock is ticking. Much of CNN’s revenue comes from a shrinking pool of cable and satellite subscribers. In 2016, about 98.7 million householdssubscribed to a cable or satellite service and that number is now down to fewer than 65 million, according to Insider Intelligence. And it’s doubtful CNN will have much leverage to raise rates when their current deals are up with cable distributors like Comcast, Spectrum and Cox Communications. (Cox Communications is part of Cox Enterprises, which also owns The Atlanta Journal-Constitution.).

While Thompson’s memo outlined a clear vision for where CNN needs to go, it stopped short of detailing how it will get there.

Frank Sesno, a former CNN correspondent and D.C. bureau chief from 1984 to 2001 and current director of strategic initiatives at George Washington University’s School of Media and Public Affairs, said Thompson’s memo was “vague” but indicates the new boss is willing to shake things up while signaling less money for the TV side.

“He needs to be the next Ted Turner,” Sesno said. “He needs to be a revolutionary thinker who will not take no for an answer.”

Sesno said it’s unclear how much money Warner Bros. Discovery will be willing or able to plow into CNN down the road to make any revolutionary changes happen. It’s carrying about $45 billion in debt.

But he said CNN will have to come up with new ways to engage its core audience and encourage at least some of them to pay for a streaming subscription service of some sort without diminishing the brand itself.

“Mark Thompson is going to have to scramble some eggs and break some eggs,” Sesno said. “He’s going to have to be willing to try things and fail.”


©2024 The Atlanta Journal-Constitution. Visit at ajc.com. Distributed by Tribune Content Agency, LLC.

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