Issues would possibly look gloomy at CNN with layoffs, wage cuts and a brand new digital programming mannequin that will or could not work. However On The Cash has discovered that non-public fairness corporations have been crunching the numbers on a doable acquisition of the ratings-challenged community.
Don’t precisely maintain your breath for something occurring quickly, my sources each at CNN and within the personal fairness enterprise inform me. The community’s mum or dad, Warner Bros Discovery, isn’t but procuring CNN.
Certainly, no agency has made a bid, my sources inform me: the PE folks I spoke to don’t actually know the way to actually worth the factor due to its troubled enterprise mannequin.
That stated, I do know of a minimum of one main PE agency (and certain extra) that has crunched the numbers. Analysts imagine CNN makes what seems like an honest sum of money, round $750 million this yr. Sounds good till you understand that’s down from over $1 billion in 2020; wire reducing is taking its toll as folks cease watching cable information, that means declining cable charges. CNN is a world information operation so it has excessive overhead.
When folks lower the wire you’ll be able to’t cost as a lot for adverts. WBD’s stability sheet says advert revenues are all the way down to $1.5 billion for the third quarter, in comparison with $1.7 billion for the quarter in 2023.
One other subject: PE executives additionally imagine the programming nonetheless veers an excessive amount of to the left, the place there’s a dwindling client market or Kamala Harris would have been elected president.
As one government at a high PE agency informed On The Cash: “Yes lots of sniffing but people think it’s a wasting asset.”
That’s too harsh. Full disclosure: I’ve pals on the place and I respect the work of its high folks and producers. I do know WBD chief David Zaslav effectively, and I truthfully imagine he needs to make the operation work, tamp down on what some proper wingers say is its left-wing political bias. He would possibly hold it if he can stem the bleeding. Zas and his staff imagine information can earn a living if they will simply discover the correct technique.
Plus, Mark Thompson, CNN’s CEO, is a critical media government who helped craft the New York Instances profitable digital technique. If Zas and Thompson could make CNN work, appeal to these cable-fleeing eyeballs to the evolving digital product they are going to have created a information enterprise mannequin for the long run. They may not must look far for consumers.
