Chris Licht, chairman and CEO of CNN Worldwide, speaks on stage during 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 litany of reasons to fire Chris Licht as head of CNN.
Licht, who left the network on Wednesday after more than a year in the role, he grappled with leadership style, raising morale, programming decisions, how to cover for the former president Donald Trump and finally, pride.
But Licht’s entire tenure at CNN could have turned out differently if he had convinced Zaslav to keep CNN+.
This may sound absurd. Few people watched CNN+ during the first two weeks of existence last year. Zaslav and several other Discovery executives, including the current head of streaming at Warner Bros. Discovery’s JB Perrette and now CNN COO David Leavy were skeptical of spending hundreds of millions of dollars on niche or ill-conceived content ideas like “Jake Tapper’s Book Club” and “Parenting Help with Anderson Cooper.” Leavy is now part of the executive team that will help Zasla find a new CEO.
Celebrate thought CNN+ was a waste of resources for a company with $50 billion in debt that needed to increase free cash flow earn $3 billion in merger-related synergies. But before he made up his mind, he wanted to hear Licht’s thoughts.
Licht was scheduled to start the job on May 2, 2022, but started a few weeks earlier to join CNN+. He met with CNN+ chief Andrew Morse, CNN+ general manager Alex MacCallum and CNN Chief Tech Officer Robyn Peterson in several virtual conferences, according to people familiar with the matter, who declined to be identified due to the private nature of the conversations. Perrette and Discovery streaming CFO Neil Chugani (who would become CNN’s CFO) were also there.
Licht expressed his skepticism about programming the product, according to people at the meeting. The discussion centered on the viability of offering a product named after CNN without actually featuring live coverage of the network’s cable broadcasts. Perrette told CNN+ management to freeze all marketing spending and not launch Roku.
As the CNN+ team walked out of meetings with the assumption that the streaming service was likely to be killed, they sent the financials to Discovery executives. They planned 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 the details of the meetings.
If Licht had convinced Discovery executives to keep CNN+, it’s possible that his tenure at CNN would have played out differently.
Licht’s background is in show production. He launched “Morning Joe” on MSNBC and started “Late Night with Stephen Colbert” on CBS. CNN+ would give him a canvas to create shows from scratch. It would also give him a growth story to present to the press and investors. If more spending wasn’t in the cards, he could cut the budget but keep the bones of the subscription product alive and iterate on creative ideas until he hit on something that worked. CNN+ launched for $4.99 per month, though pricing could be adjusted.
Former CNN chief Jeff Zucker, who left the network after revealing a workplace relationship just months before the WarnerMedia-Discovery merger, had aspirations o turning CNN+ into a subscription product similar to the New York Times. This would take years, but it could also give employees and management a north star. The attention on CNN+ could have been a ready distraction from declining linear TV ratings, which Licht could dismiss 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 declining cable network and no coherent digital strategy. This is the bane of modern media society.
During his year on the job, Licht fired hundreds of employees and mostly moved around existing CNN anchors and reporters to build a new morning show and prime-time programming. His experiment to move primetime anchor Don Lemon to mornings failed. CNN fired Lemon in April. Licht tried to move Tapper, the afternoon anchor, to prime time, but early ratings were not good and Tapper wanted to keep his time slot, so Licht canceled his plans.
In Licht’s defense, the lack of future strategy reflected Zaslav’s limited vision.
“When [Zaslav] called and offered me the job, 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 vision of this network and my vision of this network. The only reason I took the job is because he was in charge. I thought I could give it to him.”
Zaslav told Licht that he wanted to to make CNN a less niche network and more direct news networks. Board member of Warner Bros. Discovery John Malone told CNBC in 2021 “he would like to see CNN evolve back to the kind of journalism it started with and actually have journalists, which would be unique and refreshing.”
But CNN reporters claimed it was a straw man. They claimed to be advocating nothing but the truth. Some took offense to Malone’s remarks as demeaning to their journalistic skills.
CNN may change the tone of its programming around Trump, who is the front-runner for the Republican presidential nomination in 2024. Depending on the situation, it may tone down the hyperbole and rhetoric surrounding his lies and exaggerations.
Still, it’s not a business strategy. CNN+ may have been doomed to be nothing more than a start-up streaming service. However, it represented hope for how the brand could move into the future. A successful CNN leader will have to figure out a way to increase ratings with compelling programming while supporting new digital ventures that bring in revenue and a younger audience.
It’s possible that CNN+ would never have taken off, and Licht would have spent the last year doubling down on a flawed concept that his bosses at Discovery never liked — which probably would have led to his firing anyway. Investors balked at increased spending on streaming services last year, so any plan around CNN+ had to emphasize its long-term appeal.
The problem was without CNN+, Licht held 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 fees, according to The New York Times. Advertising revenue on CNN down almost 40% under Licht, The Daily Beast reported, citing MediaRadar data.
The 2024 election and a more robust political advertising market should help improve CNN’s financial situation next year, but “wait until 2024” isn’t a strong message — and it doesn’t offer 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 bottom line as well as the bottom line, he’ll need to find someone with a more holistic strategy than just programming for the 55-and-over cable audience.
In this way, Licht was doomed from the start.
Correction: Robyn Peterson was CNN’s technical director. An earlier version misstated his title. Neil Chugani was Discovery’s CFO of streaming. In an earlier version, his name was misspelled.
WATCH: Chris Licht’s tumultuous tenure