According to the estimates of risk rating agency S&P Global Market Intelligence, CNN’s bad period should be reflected in the company’s annual profit.
The American broadcaster has been in crisis since one of its main hosts, Chris Cuomo, left at the end of last year. The journalist’s dismissal was just the beginning of a series of changes that shook the structure of the channel.
For the first time in six years, CNN is expected to generate less than $1 billion in revenue.
CNN forecasts $1.1 billion profit in 2022
S&P’s estimates were obtained by The New York Times (NYT). According to the agency, CNN’s 2022 profit is estimated at $956.8 million—less than the company’s initial target of $1.1 billion.
If the figure is confirmed, three sources from the NYT said the network will have revenues under $1 billion for the first time since 2016.
Financial losses go hand in hand with audience losses: CNN is losing viewers. His big gamble to turn it down came to an end after WarnerMedia (the channel’s parent company) merged with Discovery in April.
Launched weeks before the deal was closed, the CNN+ streaming service, Warner Bros. did not satisfy its rulers. Discovery (WBD). The original plan was for the platform to become profitable within four years, with a $1 billion investment in the service.
But the proposal to broadcast lighter content and beyond journalism was not well received by the new owners of the cable channel. CNN CEO Chris Licht, who has been underrated since its debut, announced the end of CNN+ at the end of April.
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Licht, who was not yet officially head of the network at the time, assured employees that there was no need to worry about ratings.
But now, the lack of audience and perspective on how this can be reversed worries CNN’s CEO and other executives.
Licht was appointed after Jeff Zucker left in February. He resigned after revealing his secret relationship with Allison Gollust, the network’s vice president and head of marketing. He also resigned.
Both exits resulted from an internal investigation that began when the investigation was launched. Primetime anchor Chris Cuomo was fired last December.
WarnerMedia said at the time that an investigation found “company policies, including CNN’s news standards and practices, were violated by Jeff Zucker, Allison Gollust and Chris Cuomo.”
The company didn’t detail the violations, but the three’s involvement in the alleged involvement of former New York governor Andrew Cuomo — Chris’s brother — who is being investigated for sexual harassment, is cited as the reason why CNN shut them down.
Also Read | Chris Cuomo, fired from CNN for scandal involving his brother, returns to TV on a small network
In addition, the NYT announced that it accelerated after the departure of the star anchor. An anonymous report of a sexual assault by a former colleague of Chris arrives at the police station. While working at ABC News in 2011.
Chris Licht arrived at the station on a mission to tidy up the house, with CNN’s imagery overblown. But CNN+’s early end got in the way of their plans.
New CEO didn’t care about audience metrics
In his first interview with CNN staff, Chris Licht was surprised to say that the network would no longer be “stuck” in the ratings.
The CEO said CNN will increase revenue by offering advertisers “pure branding,” not just the size of their audience, according to a record obtained by the NYT.
A company spokesperson told the newspaper that Licht has now adjusted the focus and aims to expand its cable TV reach in the US.
The CNN representative said the executive has yet to put his stamp on the network’s programming and projects where profits will increase in 2023.
Viewers of American private broadcasters have generally declined since Donald Trump left the White House, but CNN’s decline is sharper.
According to Nielsen data, in the first quarter of this year the broadcaster averaged 639,000 viewers in prime time – a 27% drop from the same period in 2021.
CNN follows MSNBC, which lost 23% in prime-time viewership in the first three months of the year, and Fox News, which grew 1% in viewership.
Alongside the drop in ratings came an increase in war spending in Ukraine. Two sources told the NYT that CNN has invested millions in onsite coverage.
And yet it pays some of the costs associated with CNN+, such as the salaries of famous journalists who are hired and remain on the staff solely for broadcasting, although many have no defined roles so far.
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Now the channel is looking for new recipes. According to the NYT, the CEO hired former colleague Chris Marlin to help him with this. With no television experience, Marlin also came up with ideas and fiction.
Last month, CNN employees received a revised travel and spending policy that limits spending on business celebrations to less than $50 per person for vice presidents and positions, among other things.
Journalism is also an economy. Net, Queen II. It won’t have teams covering US-based events for Elizabeth’s Platinum Jubilee.
WBD executives still want to save $3 billion. Licht said in another meeting with employees in May that there should be no layoffs at the broadcaster after the streaming service shuts down.
“No one said to me, ‘You’re going to have to cut this,'” the CNN CEO said, according to the recording obtained by the NYT. “I think there’s a keen sense that they don’t know our business.”
Also Read | Chris Cuomo, fired from CNN for scandal involving his brother, returns to TV on a small network
source: Noticias
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