Will Licht Let CNN Digital Bleed?

Chris Licht
CNN Chairman and C.E.O. Chris Licht. Photo: Arnold Jerocki/Getty Images
Dylan Byers
July 1, 2022

For the last five months, ever since Jeff Zucker’s abrupt and unceremonious ouster and Chris Licht’s installment, the sturm und drang surrounding CNN’s turbulent leadership transition has focused on the real and perceived effects of the management shuffle on the core linear television product. Media coverage of Licht’s CNN, like most conversations inside the organization and across the industry these days, center on his mandate to turn down the volume (less “Breaking News” alerts, et cetera) and produce less polarizing and alarmist journalism—a shift away from Zucker-style programming that is either very welcome or very foolhardy, depending on whom you ask, but certainly indicative of David Zaslav and Warner Bros. Discovery’s desire to ensure that CNN is a universally palatable brand with an optimized total addressable market that can eventually juice the HBO Max offering, or perhaps even help facilitate the optionality (one day, at least, hypothetically) for a sale of the company, itself, or another mega-deal, once the synergies are complete and the debt is dialed down.

The focus on the television asset is logical: the cable channel still drives the vast majority of the business unit’s roughly $1 billion in annual profit, and the reputation of the brand rests on the shoulders of stalwarts like Anderson Cooper and Jake Tapper as well as the channel’s utility to citizens when real news actually breaks. Nevertheless, this focus ignores another effect of the leadership-ownership change that, while less discussed, is arguably no less important: the uncertainty over the future of CNN Digital, which is the world’s most popular digital news site and, to date, a significant boon to the business’s bottom line.

Every month, an average of 144 million people visit CNN Digital in the U.S. alone—a staggering number that far surpasses the Times or the Post—allowing the company to rightfully claim that it is the world’s dominant digital news outlet. During their nine-year tenure together, Zucker and his deputy Andrew Morse invested heavily in Digital as a growth business that could fuel investments in CNN’s journalism across platforms. By 2021, they had more than doubled revenues and profits for CNN Digital, bringing in $400 to $450 million in annual revenue and $120 to $150 million in profit, according to sources with knowledge of the company’s financials. In their eyes, digital growth was essential to the future of the business, particularly as consumers became more reliant on the mobile news experience. (Disclosure: I know all this, in part, because I worked for Zucker and Morse when they were building it, from 2015 to 2018.)

The Warner Bros. Discovery takeover has at least temporarily halted that trajectory. Since Licht arrived and quickly shuttered CNN+, the network’s $350 million-a-year gamble on streaming, Morse and the vast majority of the CNN Digital leadership have walked out the door. CNN Digital interim chief Alex MacCallum and CNN Digital chief technology officer Robyn Peterson, both widely respected in their fields, are the most recent to leave. They follow Meredith Artley, the senior vice president and editor-in-chief of CNN Digital, and a finalist for the Washington Post executive editor position, and Rebecca Kutler, the senior vice president and head of programming for the now-defunct CNN+.

More notable is that none of these key positions have been filled, a fact that has not gone unnoticed by the rank-and-file digital staffers, many of whom tell me they still feel leaderless and adrift two months into Licht’s tenure. Some CNN Digital insiders also said they were being encouraged to borrow and repurpose news content from other Discovery platforms like EuroSport and Food Network, a move that has heightened anxieties about whether CNN will continue to produce its own global sports and lifestyle coverage, or whether those beats will become victims of Zaslav’s effort to synergize costs across his organization and C.F.O. Gunnar Wiedenfels’ game of militant belt-tightening.

Last month, CNN posted a job listing for a Chief Digital Officer, which is presumably the first step toward restoring the now largely vacant Digital leadership team. The question is whether or not this person will be tasked with overseeing an aggressive growth strategy or simply managing the existing infrastructure and synergizing the Discovery content. The post included the eyebrow-raising stipulation that the new C.D.O. have “a reputation of being a responsible spender”—an apparent knock on Zucker and Morse’s $350-million CNN+ investment that highlights Zaslav and Wiedenfels’ preoccupation with cutting spending, even where spending might eventually translate to profit. Such is the occupational hazard of running a public, debt-saddled company and needing to appease the Street.

Matt Dornic, a CNN spokesperson, told me CNN Digital would remain an area of growth and opportunity for the company: “We have been a dominant number one in digital news and information for years,” he said. “We intend to increase that lead and strengthen our position.”

An anxious staff is still waiting to see Licht’s vision for digital in practice, but it’s fair to say that growing the business will be particularly challenging in the near-term as recession fears drag down ad spending. The conventional wisdom among the smartest minds in digital media is that nearly every ad-supported business is in for a tough 12 to 18 months. In such a landscape, it’s fair to question whether cutting back on digital, or at least shifting to a leaner, more focused strategy, is ruthless or responsible. Whatever the case, the angst inside CNN is, as ever these days, palpable.