AT&T already a long list of “to-dos” when it comes to WarnerMedia, the big entertainment conglomerate it purchased for $85 billion in 2018. Now it has to add one more thing to it.
Jeff Zucker’s announcement Thursday that he will exit his role as president of CNN, and, presumably, as head of Turner Sports, by the end of 2021 sets another hurdle before the telecom giant and WarnerMedia CEO Jason Kilar as they strive to broaden consumer use of the streaming-video hub HBO Max and push adoption of 5G technology that will make it all more accessible.
As executives work on those goals, they will need the revenue and profit they derive from traditional but out-of-vogue assets like cable networks and movies, long WarnerMedia’s stock in trade Under Zucker, CNN has thrown off more than $100 million in annual profit and, in recent weeks, enjoyed a surge of viewership that put it ahead of rivals Fox News Channel and MSNBC in key categories.
If Kilar is fretting about finding a new executive to lead CNN, he wasn’t showing it Thursday. “It’s great to have Jeff steering all things CNN in 2021,” the WarnerMedia chief said in a statement. “The impact that Jeff has had on CNN is remarkable under any definition. And I believe that 2021 is going to go down as a milestone year in CNN’s 40-year history given all that is planned.”
But CNN’s business, though significant, is in flux — just like other traditional TV outlets. Executives are expected in coming weeks to put more focus on developing the news outlet’s direct-to-consumer business, whether that comes in the form of original streaming video or some sort of subscription-based offering that could rely on contributions from many of CNN’s journalists.
And CNN may have to recalibrate its recent tone for the Biden era. Under Trump, CNN burnished an in-your-face demeanor that allowed anchors ranging from Chris Cuomo to Brianna Keilar to offer their own takes on the news, rather than merely reporting it. And the network has come to rely heavily on vociferous panels of contributors, some representing the point of view of President Trump, others offering a center or even leftward position. Under Biden, the news cycle is likely to be less frenetic, and White House developments may require more nuance and analysis.
The business of cable-news often declines after an election, and projections call for a similar dynamic in 2021. CNN is projected to see shortfalls in both advertising and distribution revenue, according to Kagan, a market-research firm that is part of S&P Global Market Intelligence. CNN’s affiliate fees are forecast to fall 5% in 2021, to $953.7 million, from more than $1 billion last year. Ad revenue is projected to dip 16% to $600.6 million in 2021, compared with $715.4 million last year. Fox News Channel and MSNBC are facing similar trends, according to Kagan projections.
There are plenty of executives who might vie for Zucker’s job, but there is some consensus that few executives have his resume or experience. Zucker first gained traction as a young executive producer overseeing NBC’s valuable “Today” franchise, and his success in the role led him to run NBC Entertainment on the west coast and, eventually, to the CEO job at NBCUniversal when it was controlled by General Electric. During his time in that position, he helped launch a then-embryonic streaming-video hub known as Hulu – and hired Kilar, then an up-and-coming Amazon executive, to lead it.
To be certain, CNN’s senior staff boasts several executives who might step into Zucker’s shoes, including Michael Bass, a longtime Zucker lieutenant who oversees much of the network’s news programming, or Amy Entelis, an ABC News veteran who manages talent and has put CNN in the business of producing original series and documentaries. Andrew Morse, the former head of Bloomberg’s U.S. TV operations, has oversight of CNN’s digital operations, which have expanded greatly in recent years. And Ken Jautz, who has been with CNN and WarnerMedia for decades, has experience overseeing news operations as well as an eye for interesting personalities. It’s Jautz who has helped launch anchors such as Nancy Grace, Robin Meade and Glenn Beck.
WarnerMedia declined to address any plan for transition at CNN or Turner Sports during Zucker’s last year at the helm.
There is also no shortage of TV executives with news experience sitting on the sidelines, including Ben Sherwood, the former Disney executive who helped propel “Good Morning America” to a new role of dominance among morning-news viewers, or Jim Bell, the former longtime head of NBC’s “Today” and Olympics coverage. David Rhodes, the former president of CBS News, has been consulting for a unit of News Corporation, the media company controlled by the Murdoch family.
When Zucker joined CNN in 2013, he was the new guy, placed alongside veterans like HBO’s Richard Plepler and Turner’s David Levy. Now he is one of the last of a vanguard of senior Time Warner executives to still have traction there.
There is hope among staffers that Zucker may just stay. These people suggest Zucker’s comments to staffers this mornig left some small amount of wiggle room that he may find reason to linger beyond 2021, when his current contract ends. Indeed, one person who has known the executive for years is hard-pressed to believe Zucker, known for his tendencies to manage even the smallest details and to work constantly, will really walk away from a job that has put him at the center of an entity that makes news as often as it breaks it.
Until Zucker announces he has signed a new contract, however, the clock is ticking for the company that counts on CNN to help it connect to consumers.