Future Headlines: The Fate of CNN and More!!

Three Headlines Coming Soon…

Starting today I’m going to play Carnac the Magnificent and begin a series of predictions related to the media that seem, at least to me, quite plausible and potentially game changing. Let me establish right off the top that I have no inside information driving these prognostications. I’ve just tried to pay attention and connect a few dots here and there along the way. With that in mind, here’s the first one that I’m pretty sure has a better than even chance of coming true.

#1 Google Buys CNN

I find what’s going on at CNN, post Warner Bros./Discovery merger, personally fascinating. It’s very much a Back to the Future situation for me, having worked at the network a number of years ago. During my time there, Fox News had already become a right leaning behemoth and MSNBC was getting ready to steer decidedly left in an attempt to find an audience. I remember sitting in executive conference rooms in both New York and Atlanta considering the prevailing question - “can a straight down the middle cable news organization actually survive?” The debate was often emotional and sometimes downright heated, but the rating trends were already providing a pretty conclusive answer…No. Even then, in the heart of hearts of the executives in attendance, you could sense abject fear slowly transitioning to accepted reality, that the diagnosis was terminal. And now, here they are again. New ownership has mandated a hard tack back to some semblance of center-cut, opinion-free, no-frills, reporting of the news, even though I’m pretty sure, just like years ago, no one really thinks it’s going to work. And why would it?

The reality equation for CNN is pretty simple, and way more obvious than when I was part of the conversation. We all know the formula - ubiquitous smartphone usage + a plethora of news headlines and live video available 24/7 + cord cutting = Irrelevance. With the exception of a short - relatively small - resurgence fueled by, first, the embracing of the Donald Trump candidacy and then a critical hyper-focus on his subsequent presidency, it’s been decidedly trending that way for a very, very long time.

Sadly, any hope of transitioning the brand into the more vibrant and populated digital space died a miserable death with the ill-fated, much too late to the party, and oafishly clumsy creation of CNN+ by the previous administration. In the end, the misstep simply served to prove the point that what the network had to offer, even in the eyeball rich world of cyberspace, wasn’t worth paying for.

So What’s Going On?

It feels like CNN is in that unfortunate of phase of corporate existence where ownership has decided it’s time to cut losses and move on. There seems to be a general shrinkage of the brand taking place, publicly labeled streamlining, but much more likely a prepping for disposal. For any company in that position one of the first steps in the process is to preserve the core value but eliminate any ancillary expenses impacting the bottom line. For example…besides the already announced layoffs and warnings of more to come, it was announced this past week that CNN would no longer buy documentaries and series programming from outside vendors, which had been a major initiative by the previous boss, Jeff Zucker, to stem audience loss and distinguish the product as something more than a news headline service.

According to Puck’s Dylan Byers, CNN CEO Chris Licht has been ordered to cut 10% of the network’s budget, a cool $100 million bucks. Things like travel for anchors to news stories, travel for enterprise reporting, or the booking of outside studios for remote interviews - all shut down. As Puck reported…

“Inside CNN, there is a great deal of uncertainty about what the organization will look like on the other side of this transition. The cuts will touch every aspect of CNN’s business, including programming, newsgathering, and digital.”

Needless to say, the mood inside the organization is not good and, according to Puck, deteriorating by the day.

"These days, amid record-low ratings and a new round of layoffs that Licht had once promised not to make, the morale at CNN is lower than it has been at any point in the decade that I’ve been covering the network. (As many of you know, I used to work there, too.) In the last 72 hours, at least twenty CNN employees, including on-air talent and rank-and-file staff, have called or texted me, many of them unsolicited, to tell me, in one way or another, that things have never been worse."

The Bottom Line is…The Bottom Line.

There was a time, not that long ago, when owning a news network, especially one the size of CNN, brought with it an intrinsic value in the form of leverage and influence, that corporate entities found useful. It’s why, for years, network news divisions were allowed to be loss leaders never approaching break even, let alone profitability. The days of such reverence are long since past and the overall discrediting of the media over the past few years has diminished the intangible value beyond the pure dollars and cents to almost nil.

So you take all of the aforementioned analysis and add to it that David Zaslav and John Malone, the two men at the top of the new Warner Bros./Discovery, are on a mission. A mission of survival and profitability. The new company is deeply in debt and already facing questions as to whether or not it’s large enough to survive in a business vertical increasingly dominated by gigantic tech-turned-entertainment companies like Apple, Microsoft, and Google. How does CNN fit into their corporate picture? It doesn’t. It’s an outlier to the brand being built. A failing institution with declining revenues and no clear path to future growth which begs the question…who in their right mind would want to buy it?

In the Name of Global Domination…

And that’s where Google comes in. Consider: It is the second most recognized and valuable brand in the world (behind only Apple). Google Search is ubiquitous and arguably the most often used utility in the world. YouTube (with apologies to TikTok) is the top digital video platform on the planet. Over the past few years, Google has even dabbled in the local news business supporting hyper-local startups here and there. It doesn’t take a whole lot of imagination to see how, without a great deal of effort, it could become almost as synonymous with News as it is with Search.

Maybe even more importantly, the acquisition of CNN would, at least in part, address a growing reputation problem the Tech Giant has that could lead to its destruction in the not-to-distant future. As Robert Thomson, CEO of News Corp, put it to The Guardian several years ago…

Companies that aggregate mainstream media content without paying a fee are the “parasites or tech tapeworms in the intestines of the Internet.”

Make no mistake, he was talking about Google, and that ugly characterization has been repeated many, many times since. Increasingly, governments all over the world have labeled them a predator in need of regulation. Some, including a number of politicians in the U.S., have even suggested the company needs to be broken up AT&T style. While I’m not suggesting bringing CNN into the fold would end the threat - in truth it would be akin to a coal mining company purchasing carbon credits and publishing a “Let’s Go Green” newsletter - it would, however, buy some time and change the narrative, at least for a while. It would also provide Google with a still legitimate (especially internationally) news platform to exert a little pressure, bolster their image, and make sure their side of the story would be told going forward…all at a price that would, no doubt, amount to veritable pocket change.

Putting a Bow On It…

The new Warner Bros./Discovery is all about profitability and holding only those pieces that fit the brand and provide non-overlapping value. CEO David Zaslav’s actions have already indicated a ruthless approach to this mission free of any sentimentality. Against this backdrop, CNN’s profitability is in decline and its primary platform of distribution is winding down rapidly, meaning the prognosis is grim. And, for good measure, Zaslav and his biggest shareholder, John Malone, have not been shy in their criticism of the former news giant. Bottom line: They don’t need CNN, and they for sure don’t want it. Google, on the other hand, could benefit from what little juice the current CNN has to offer. One could even argue that housed in a digitally native powerhouse like Google it could literally be redefined and reborn.

Oh, and by the way, the headline at the top of this story was almost Amazon Buys CNN - and maybe it should have been because there’s a lot there to unpack as well - but in the final analysis I think CNN meets a certain need for Google while representing more of a luxury for Amazon. Stay tuned…

Next Week…

Future Headline #2 - Hello Wayne’s World! Local TV Redefined

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