The Zaz in CNN

WBD C.E.O. David Zaslav, at the end of the 9 a.m. call, described CNN as an “unmoored boat.” But, he said, “this is our company, our boat. We all have an oar.”
WBD C.E.O. David Zaslav described CNN as an “unmoored boat.” But, he said, “this is our company, our boat. We all have an oar.” Photo: Drew Angerer/Getty Images
Dylan Byers
March 15, 2023

On Tuesday morning, CNN chairman and C.E.O. Chris Licht arrived at his network’s 9 a.m. editorial meeting with a surprise guest: his boss, David Zaslav. The timing of Zaz’s visit to CNN’s “Grand Central” conference room was notable to network insiders. A day earlier, Page Six had floated an incredulous rumor that Licht might be defenestrated before Labor Day—or, at the very least, that CNN staffers were whispering about that potentially, possibly, maybe happening. Whether previously scheduled or unintentional, Zaz was showing up to support his boy in Hudson Yards.

Zaz has no intention of ousting his hand-picked CNN chief, sources familiar with his thinking tell me. But his visit to CNN’s headquarters—which also included a managers’ meeting, a sit-down with a top producer, a preview of Licht’s new daytime branding effort, and a briefing with the digital team—suggests that he is indeed taking a more aggressive, hands-on approach to one of the more beleaguered assets in his portfolio. 

CNN executives hate this paragraph, so let me keep it as brief as possible: In Licht’s first year at the helm, CNN has been beset by historically low ratings, diminished revenue, mass layoffs, budget cuts, sapped morale, a few ill-advised programming moves and tensions between the stars of his flagship morning show, Don Lemon and Kaitlan Collins. Indeed, in a wrinkle befitting our times, Collins recently left talent agency UTA for WME, in part because she didn’t want to share the same agent as Lemon, sources familiar with the matter said. In private conversations, she has also mused aloud about returning to Washington, D.C., even though the show is based in New York. 

Zaz, a wizard of financial engineering moreso than a student of Melville, sought to inspire the network’s managers with a nautical trope at the end of the 9 a.m. call, describing CNN as an “unmoored” boat. But, he said, “every one of you has an oar, it’s our company. It’s an incredibly exciting time.” He referenced Ted Turner, the company’s founder, and said it was CNN’s “rendezvous with destiny” to be “a purveyor of facts and truth in journalism,” not an advocacy network. He stressed that ratings and revenue were not the metrics by which to judge the network’s success, because CNN had “a higher purpose” to strengthen American democracy. “We’re not trying to make more money,” he said.

Zaslaz also praised the network for the success of Navalny, the CNN Films project that won this year’s Academy Award for Best Documentary. This last note did not go over terribly well in the room, I’m told, because Licht effectively neutered CNN Films last year as part of his cost-cutting effort. Navalny will be CNN Films’ first and final Oscar winner; Amy Entelis, the CNN Films chief and network talent whisperer, is currently weighing whether or not to leave the network. (One additional rub: the filmmakers never mentioned Entelis or CNN Films in their acceptance speech. Alas, Navalny’s wife used the time to call for her husband’s release from prison.)

More Zaz…

Indeed, one of Zaz’s agenda items on Tuesday was a meeting with Eric Sherling, who oversees the network’s Washington programming (Wolf Blitzer, Jake Tapper) and special events (debates, town halls, etcetera). Sherling is said to be Licht’s top pick to take over as CNN programming chief, a role that’s been left vacant since the departure of Michael Bass last year. Zaz was also given a preview of Licht’s new branding strategy—he is about to unveil a new daytime set that he has said “will stop people in their tracks”—and met with Athan Stephanopoulos, the new digital chief, to get briefed on CNN’s new digital strategy.

Nearly one year in, it’s clear that Zaslav still believes in his vision for CNN as a nonpartisan, broadcast-style news digest, and still believes that Licht is his Captain Ahab, despite what has been an undeniably challenging run thus far. “He’s gotten a lot wrong. We’ve gotten a lot wrong,” Zaz said during the managers’ meeting. “We’re all flawed. We’re trying to figure out what is the best CNN.” For his part, Licht encouraged the managers to identify people on their teams who were not enthusiastic about the company’s new mission. “It’s incumbent on us to unlock that potential, to give people a sense of purpose,” Licht said. “And if they don’t take that, help them find something else… here or outside the company.”

In many ways, Zaz’s visit highlights just how much he views CNN as his own responsibility, despite entrusting the network to Licht and affording him ample runway to execute his vision. To be sure, the CNN business accounts for a small fraction of Warner Bros. Discovery’s revenue engine. And it’s clear from his public and private remarks that Zaz is more focused, as he should be, on the film studios, myriad sports and entertainment channels, soon-to-be-rebranded streaming service (it will just be called “Max,” per sources familiar) and still-massive debt load. Nevertheless, CNN is, as Zaz often stresses, a “reputational asset.” And Zaz, a famously hands-on manager, now seems intent on having a hand in its success.

Indeed, Zaz’s management of CNN really has been an outlier. Since they debuted WBD on the Nasdaq nearly a year ago, Zaz and C.F.O. Gunnar Wiedenfels have been pathologically focused on trimming its $50-billion-plus debt, optimizing free cash flow, and appeasing Wall Street by making brutal calls (Batgirl, CNN+, etcetera) to generate revenue and stem losses. And yet Zaz’s public rhetoric about CNN continuously centers on Licht’s success in bringing it back to the middle, booking Republicans on the network’s air, and rebranding it from the Zucker era, fairly or not. 

One presumes that, beneath it all, the master financial wizard knows that ratings and revenue will continue to decline irreversibly and believes a leaner and less sexy CNN may prove to be a better business in the late-stage cable news era. Wall Street may also see the ship coming through the storm. WBD’s stock is up more than 40 percent this year, depending on daily trading.

Zucker’s Diller Play

In Washington, the aforementioned former CNN chief Jeff Zucker was spotted at Charlie Palmer Steak on Wednesday, lunching with Punchbowl co-founders Jake Sherman and Anna Palmer. Their meeting is likely to garner some attention in New York and D.C. media circles: Zucker, who is now the C.E.O. of a new investment venture backed by Gerry Cardinale’s RedBird Capital and Abu Dhabi’s International Media Investments, is managing a $1 billion fund to roll up new media acquisitions. Zucker has quietly met with a number of new media startups in past months. RedBird currently has a minority position in Graydon Carter’s Air Mail stemming from before J.Z. arrived.

Sherman and Palmer’s Punchbowl is among the hottest news media startups on the market, having instantly established itself as Capitol Hill’s must-read, with a highly reliable stream of subscription and high CPM advertising revenue. Much of the anxiety over ad-supported media—a conversation that tends to coalesce around the fortunes of Vox and Buzzfeed, among others—does not pertain to Punchbowl. Following in the footsteps of Axios, Jake and Anna recognized that Fortune 100 companies have enormous marketing budgets that they are willing to spend to reach highly influential audiences, especially legislators and their staffs on Capitol Hill. This is one reason why dealmaking savant Aryeh Bourkoff saw the early promise in the business as an angel investor. 

If Zucker is fashioning himself as the new Barry Diller, and his new venture is the next IAC, Punchbowl might be the ideal first deal. But Red Bird is also presumably looking for an eventual path to ball control and a future majority stake in the business, and the two sides would have to agree on a valuation for a largely ad-supported business. This may be tricky at a time when Vox, for instance, is valued at 1:1 with revenue and Buzzfeed trades below revenue. Zucker is supported in his endeavor by super savvy dealmaking pros like Mark Dowley and David Castelblanco. It will be interesting to see how far this goes. Certainly many inside Hudson Yards will be paying attention.

The Media Is the Messenger

Of course, the most gossiped-about new media venture in D.C. these days is The Messenger, an extremely ambitious third act from the 74-year-old publishing scion Jimmy Finkelstein, who previously owned The Hill and, before that, the holding company that owned The Hollywood Reporter and Billboard. The Messenger aspires, in his vision at least, to one day rival The New York Times, and The Daily Mail, albeit with Palm Beach-ish rich guy muted Republican vibes. Perhaps it’s a New York Post 2.0.  

In a recent interview with the Times, Finkelstein said he had $50 million in investor money—Apollo’s Josh Harris, Loews’ James Tisch and Interactive Brokers’ Thomas Peterffy are on the cap table—and would launch this May with 175 journalists. He also said he plans to have around 550 journalists within a year, covering politics, business, entertainment and sports from across the country and the world. It’s a ramp that befits a person who already has a lot of money and has access to funds, likely without governance. And tons of ambition. Richard Beckman, Finklestein’s former president at The Hill, and now the president of The Messenger, told the Times that the company will make $100 million in revenue next year. 

That bold revenue projection wouldn’t surprise anyone who has followed Beckman’s career. More than a decade ago, Beckman rose through the ranks at Condé Nast where he eventually became C.M.O. His “Music Rocks” and “Movies Rock” advertorial-cum-schlocky-TV productions became feats of tacky-yet-effective revenue generation and I.P. monetization. Back in those days, he was known as “Mad Dog,” a selling-and-closing ad salesman who wore expensive suits, lots of cologne, and put people off with his high-wattage arrogance. He was a caricature of what the company stood for, for better or worse, in the late ’90s and early 2000s, and profited handsomely from it.

There is ample pessimism about this project in media circles. Finkelstein’s appointment of Dan Wakeford, a former top editor of People, as newsroom chief suggests that he is leaning more toward Mail populism than Times sophistication, as does his hire of entertainment editor Mary Margaret, a former top editor of Entertainment Weekly. (Finkelstein originally tried to lure Janice Min for the editor-in-chief position, per sources familiar.) Potential advertising clients who have reviewed The Messenger’s pitch see more signs of a new than they do a rival to traditional incumbents.

On the politics side, Finkelstein has hired Marty Kady, a longtime Politico editor. I’ve also learned that one of his first reporter hires is Marc Caputo, the star Florida politics journalist who spent time covering the Trump show at Politico and NBC News before being fired earlier this year for a string of ill-advised social media posts (he gloated about ousting a troubled tenant from one of his homes in Key West). Presumably, Finkelstein & Co. have more personnel announcements up their sleeve. But May is just six weeks away, and there’s a long way to go to 175.