CNN shed nearly 27% of its viewers this quarter compared to last year and could see its annual profits dip below $1 billion for the first time since 2016, according to a new report.
The bleak outlook for CNN’s business affairs comes three months after Chris Licht took the reins as CEO. Projections indicate the network’s profits are on pace to tumble to $956.8 million this year, the New York Times reported.
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“I don’t want producers making decisions based on what they think will rate,” Licht told CNN employees during his first week.
Initially, CNN was reportedly targeting $1.1 billion in profits for 2022 but had been projected to run about $100 million short of that target. Financial losses as a result of CNN+’s collapse, which shuttered after about a month from its start date, exacerbated the company’s woes even further.
Since his accession to CEO, Licht has reportedly been keen on steering the cable network from what he perceives as sensational reporting. He has told staffers to refrain from deploying the “Breaking News” chyron excessively and wants the network to focus on “truth” instead of alarmism, Fox News reported.
Licht’s style marked a significant departure from predecessor Jeff Zucker, who resigned from the network earlier this year under pressure when details emerged of an undisclosed relationship he had with a colleague. Zucker’s departure came amid a pending shake-up as CNN’s former parent company, WarnerMedia, merged with Discovery.
Licht’s appointment as CEO was announced in February, and he formally took over in May. The network drew an average of roughly 639,000 prime-time viewers during this quarter — a 27% nosedive from a year ago, per the New York Times. This puts CNN behind MSNBC, which is down 23% during the same time frame, and Fox News, which is up about 1%.
To remedy this dilemma, executives have reportedly been scrambling for ways to hunt for more money. Licht has reached out to Chris Marlin, who does not have experience managing a cable news company, to brainstorm ideas for revenue resurgence. He has reportedly pitched or mulled ideas such as advertising deals with major tech firms, selling sponsorships, and expanding operations in China.
CNN brass has also reportedly tamped down on expenses, with caps on travel and internal festivities to cut costs.
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As a cable network, the majority of CNN’s revenue comes from subscription deals with cable companies, but it has also historically relied on advertisement revenue, which is affected by ratings.
The past year has been tumultuous for CNN amid several public scandals that have dogged the network. Most notable was the firing of prime-time host Chris Cuomo upon revelations of how he assisted his brother, the former governor of New York, with his response to a sexual misconduct scandal. Cuomo’s departure has left the network without a permanent replacement for its 9 p.m. prime-time slot for months. Cuomo recently began a podcast and is joining NewsNation.
