CNN’s Transformation Must Include ‘Dramatic’ Cost Cuts, Analyst Says





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CNN’s new CEO Mark Thompson has plans for a “new revolution” for the TV network, but analysts think some belt-tightening should be in the cards.

While CNN’s name still carries weight, it hasn’t been exempt from the drastic changes the media industry has faced amid cord cutting’s growing popularity. The network’s news and linear TV services still make money, but with more customers moving away from traditional cable offerings, CNN’s revenue isn’t as stable as it once was.

“The first thing they need to do is dramatically reduce costs,” Rich Greenfield, a partner and media and tech analyst at LightShed Partners, told The Wrap

It’s unclear if or when CNN will rework its budget and where those cuts might land. The media industry as a whole is experiencing mass layoffs, so it’s possible CNN might follow suit and cut staff. The Wrap suggests that potentially reducing the rich salaries of its anchors may be one route.

But those anchors carry to the network, and have loyal followings themselves. In a newsletter, Semafor’s Ben Smith said Thompson knows “news is shifting toward talent, not away from it.” 

So, it may be likely that Thompson will find other ways to cut costs, like consolidating CNN’s products and trying new tactics.

In the January staff memo, Thompson, who’s credited with turning The New York Times into a “digital powerhouse”, acknowledged a period of strong revenue growth from cable subscriptions in the mid-2010s despite cable consumption beginning to decline.

“[S]ome of that unexpected bounty ended up as raised production costs that now look difficult to support given the changing economics across our industry,” Thompson said in the memo. “So, in addition to quality and performance improvement, expect to see us also looking hard at how best to put our TV production machine on a sustainable footing.”  

To date, Thompson has already announced a number of changes for CNN.

For example, Thompson eventually wants to combine all of CNN’s newsgathering operations into one unit that will serve the network’s TV, streaming, and digital platforms. A separate team is currently exploring growth and possible subscription formats that could place its videos behind a paywall.

In addition, Thompson switched up the network’s morning show, CNN This Morning. The program, hosted by Poppy Harlow and Phil Mattingly launched in 2022 under former station head Chris Licht, but ratings were sluggish.

The company over the years has also had to navigate a political minefield, a constant stream of misinformation to correct, programming shakeups, the failure of CNN+, as well as mass layoffs, including the ousting of previous CEOs and popular names like anchors Chris Cuomo and Don Lemon.

CNN declined to comment beyond Thompson’s memo, and Greenfield wasn’t immediately available for further comment.

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