Chris Licht, Chairman and CEO of CNN Worldwide, speaks onstage at the Warner Bros. Discovery Upfront 2023 at The Theater at Madison Square Garden on May 17, 2023 in New York City.
Kevin Mazur | Getty Images Entertainment | Getty Images
Warner Bros. Discovery CEO David Zaslav could have chosen from a laundry list of reasons to fire Chris Licht as chief of CNN.
Light, who left the network Wednesday after just over a year in the role, struggled with leadership style, raising morale, programming decisions, how to cover former President Donald Trump and, ultimately, arrogance.
But Licht’s entire tenure at CNN could have turned out differently if he had persuaded Zaslav to keep CNN+.
That may sound absurd. Hardly anyone watched CNN+ during its first two weeks of existence last year. Zaslav and several other Discovery executives, including Warner Bros.’s current head of streaming. Discovery JB Perrette and now CNN Chief Operating Officer David Leavy were skeptical about spending hundreds of millions of dollars on niche or half-baked content ideas like “Jake Tappers Book Club” and “Parental Controls with Anderson Cooper.” Leavy is now part of the executive team that will help Zaslav find a new CEO.
Zaslav thought CNN+ was a waste of resources for a company saddled with $50 billion in debt needed to boost free cash flow and generate $3 billion in fusion-related synergies. But before he made any decisions, he wanted to hear Licht’s thoughts.
Licht was supposed to start his job on May 2, 2022, but he started a few weeks early to weigh in on CNN+. During several virtual conferences, he met CNN+ Chief Andrew Morse, CNN+ General Manager Alex MacCallum, and CNN Chief Tech Officer Robyn Peterson. Perrette and Discovery streaming CFO Neil Chugani (who would become CNN’s CFO) were also in attendance.
Licht expressed skepticism about the product’s programming, according to meeting attendees. The discussion was about the viability of offering a product named after CNN without actually showing a live feed of the network’s cable programming. Perrette told CNN+ leadership to pause all marketing spend and not launch on Roku.
As the CNN+ team walked away from the meetings thinking the streaming service was likely to be killed, they sent financials to Discovery’s leadership. They had budgeted to spend $440 million in 2022 and $550 million in 2023, the people said. The proposal called for CNN+ to turn a profit by 2025 and break even on cumulative investment by 2028.
Less than three weeks later, CNN+ was dead. A spokesperson for Warner Bros. Discovery declined to comment on details of the meetings.
CNN+ alternate reality
Had Licht persuaded Discovery executives to keep CNN+, his tenure at CNN would have turned out differently.
Licht’s background is show production. He launched “Morning Joe” on MSNBC and started “Late Night with Stephen Colbert” on CBS. CNN+ would have given him a canvas to create shows from scratch. It would also have given him a growth story to pitch to the press and investors. If extra spending wasn’t in the cards, he could have slashed the budget but kept the bones of the subscription product alive, iterating creative ideas until he landed on something that worked. CNN+ launched at $4.99 a month, though prices could have been adjusted.
Former CNN head Jeff Zucker, who left the network after revealing a working relationship several months before the merger between WarnerMedia and Discovery, had ambitions about Turning CNN+ into a New York Times-esque subscription product. That would have taken years, but it could also have earned employees and management a northern star. Attention to CNN+ could have been a ready distraction from declining linear TV ratings, which Licht could have dismissed as relatively unimportant compared to building the company’s future.
Jeff Zucker, left, and David Zaslav
Chris Kleponis | Bloomberg via Getty Images; CNBC
Without CNN+, Licht was left with a collapsing cable TV network and no coherent digital strategy. That is an abomination for a modern media company.
In his year on the job, Licht laid off hundreds of employees and mostly rotated between existing CNN anchors and reporters to build a new morning show and primetime programming. His experiment to move prime-time anchor Don Lemon to the morning failed. CNN fired Lemon in April. Light tried to move Tapper, an afternoon anchor, to prime time, but the early ratings were not goodand Licht scrapped his plans.
A new leader with vision
In Light’s defense, his lack of future strategy echoed Zaslav’s limited vision.
“When [Zaslav] called and offered me the job. He told me what he was looking for from CNN,” Licht told CNBC last year. “And I said, ‘That’s exactly the kind of network I’d like to see.’ There is no daylight between his view of this network and my view of this network. The only reason I took this job is because he was in charge. I thought: I can get this to him.”
Zaslav told Light he wanted to to make CNN less of an advocacy network and more of a pure news network. John Malone, board member of Warner Bros. Discovery, told CNBC in 2021 that he “would love to see CNN go back to the kind of journalism it started with, and actually have journalists, which would be unique and refreshing.”
But CNN journalists argued that this was a stooge. They claimed they were advocating nothing but the truth. Several took offense at Malone’s comments as a disregard for their journalistic skills.
CNN may change the tone of its programming around Trump, who is the front-runner for the 2024 Republican presidential nomination. It may tone down hyperbole and rhetoric around his lies and exaggerations, depending on the situation.
Yet that is not a business strategy. CNN+ may be doomed to be nothing more than a fledgling streaming service. But it represented hope for how a brand might move into the future. A successful CNN leader will need to figure out a way to increase ratings with engaging programming while also nurturing new digital businesses that generate revenue and a younger audience.
It’s possible that CNN+ would never have taken off, and Licht might have spent the past year doubling down on a flawed concept his Discovery bosses never liked — which would probably have led to his firing anyway. Investors turned their noses up at higher spending on streaming services last year, so any plan around CNN+ had to emphasize its long-term appeal.
The problem was without CNN+, Licht had a weak hand. CNN’s profits fell to about $750 million in 2022 (including $200 million in CNN+ losses) from $1.25 billion the previous year on a weak advertising market and declining cable subscriptions. according to The New York Times. Advertising revenue at CNN down almost 40% under Light, The Daily Beast reported, citing data from MediaRadar.
The 2024 election and a stronger political advertising market should help improve CNN’s financial position next year, but “wait for 2024” isn’t a strong message — and it won’t provide a solution for 2025 and beyond.
If Zaslav wants to find a CEO who will win the hearts and minds of employees and boost the top and bottom line, he needs to find someone with a more holistic strategy than just programming for an over-55 cable television audience.
In that way, Light was doomed from the start.
Correction: Robyn Peterson was CNN’s chief tech officer. An earlier version misrepresented its title. Neil Chugani was Discovery streaming’s CFO. An earlier version misspelled his name.
WATCH: Chris Licht’s tumultuous tenure
