Kilar and Zaslav Play Chicken with CNN Plus, Hundreds Of Employees Lose
The hurried debut of CNN Plus was about Jason Kilar’s crew trying to give the initiative a chance to survive, however slim, under Zaslav’s management
In the just-concluded game of "chicken' between the once and current kings of CNN, 350 employees lost. Later this week, they’ll be out of jobs as CNN Plus closes, six weeks after its debut. Hundreds more employees, including high-profile hires such as Chris Wallace, face ongoing uncertainty about their own futures.
The soon-to-be unemployed aren’t the only ones losing out after Warner Bros. Discovery boss David Zaslav pulled the plug days after taking over. Also losing out are 150,000 pioneer CNN Plus subscribers, and possibly many other workers and fans as the globe-girdling news organization adjusts to a new boss busy cutting billions of dollars in “synergies” from the larger WBD. This is not, despite the company’s short-lived motto, the stuff that dreams are made of.
CNN Plus had been in development for a year and a half, said former WarnerMedia chief Jason Kilar, who pushed it out into the world less than two weeks before WarnerMedia was spun off from AT&T into a merger with Zaslav’s Discovery Communications.
In retrospect, the hurried debut of CNN Plus was at least substantially about Kilar’s crew trying to give the initiative a chance to survive, however slim, under Zaslav’s management. It launched with very little promotion, and no initial carriage on the biggest U.S. streaming platform, Roku.
The first weeks weren’t impressive, with as few as 10,000 people watching concurrently, and 150,000 ponying up $2.99 a month for subscriptions. But lots of other streaming operations have had slow starts with far bigger marketing spends, so maybe in an alternate universe it might have been able to eventually become a sustaining business.
Yes, maybe Kilar and his executives could/should have reached out to Zaslav’s team a few months ago, just to check in on whether to go ahead with CNN Plus.
That might have been a particularly good idea after CNN Plus’ biggest champion, former CNN Chairman Jeff Zucker, was booted because he didn’t timely disclose, or something, a newish personal relationship with his long-time lieutenant/Chief Marketing Officer.
Also read: Is CNN Plus Headed for a Quibi-Quick Exit?
By the time Zucker was gone, of course, things were pretty far along. CNN Plus would launch just a few weeks later. And maybe the equation changed for Zaslav after Zucker, his pal and long-ago work colleague, had departed so suddenly and controversially.
But you can at least understand the motivations of Kilar and the people working under him.
Pretty much all of them spent the last year knowing they almost certainly were about to lose their very high-paying jobs. As Kilar said in multiple media interviews during his last week on top, the only thing he wanted was more time. Neither he nor CNN Plus got that before Zaslav pulled the plug.
Where was John Stankey in all this? After all, the AT&T CEO is the guy who took the call from Zaslav, his golfing buddy, about spinning off its streaming operations in a merger with Discovery Communications. How come he couldn’t play another round with Zaslav just to check in on, oh, an expensive new venture slated to arrive around the time the merger closed?
Or if, as has been reported, the companies were trying to be scrupulous about contacts because antitrust hawks at the Department of Justice were reviewing the deal, well, fine.
But maybe Stankey’s debt-laden telecom company could have avoided encumbering more expenses on itself and its future partner by putting a stop to the CNN Plus work months ago, without needing to check in with Zaslav at the 19th Hole or Sun Valley.
Then again, expecting phone company executives to understand the business of streaming entertainment has been, as Verizon and AT&T have repeatedly proven, a fool’s game.
Regardless, the trains kept chugging forward, even if Zaslav was planning all along to tear up the rails and melt down the steel for other uses. So, what next?
Perhaps WBD has escaped an expensive folly as quickly as possible thanks to Zaslav’s decisive action. Given the other budgetary headaches he faces, cutting bait fast is a great idea. After all, his new company faces $55 billion in debt, with combined operations that generate something less than $50 billion a year.
HBO/HBO Max added 3 million subscribers in their last quarter under AT&T, so that’s good news, especially after Netflix’s Q1 swoon this past week.
With CNN Plus now being subtracted, what’s the equation for success at the news organization? It has been showing its essential value, its veteran reporters and producers with boots on the ground seemingly everywhere in the two months since Russian tanks rolled into Ukraine.
That extraordinary work has proven a ringing endorsement for the old-school journalism Zaslav and board member/media kingpin John Malone have said they wanted CNN to return to, eschewing the prime-time opinion programming on competitors MSNBC and Fox News.
Will CNN be able to continue that sterling work as Zaslav squeeze out savings wherever he can? International news coverage, especially in a sprawling war zone like Ukraine, is expensive stuff.
CNN Plus was supposed to set up a second alternative revenue stream for the company’s operations beyond its lucrative CNN.com site as cord-cutting continues to erode its cable TV home.
So what’s Plan B now that Plan B is dead? Even if a subscription news service wasn’t the best idea in an overstuffed market, what’s next, especially given that Wall Street is suddenly far less impressed with streaming?
It’s going to be a complicated few years ahead for employees of the former WarnerMedia, with tight money, a changing economic model, and no sugar daddy telecom owner.
Here’s hoping new head Chris Licht and CNN navigate it all with the aplomb they’ve shown in the Ukraine maelstrom. And let’s wish good luck to those 350 soon-to-be-unemployed CNN Plus employees too. It’s not like they wanted to play Chicken.
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David Bloom of Words & Deeds Media is a Santa Monica, Calif.-based writer, podcaster, and consultant focused on the transformative collision of technology, media and entertainment. Bloom is a senior contributor to numerous publications, and producer/host of the Bloom in Tech podcast. He has taught digital media at USC School of Cinematic Arts, and guest lectures regularly at numerous other universities. Bloom formerly worked for Variety, Deadline, Red Herring, and the Los Angeles Daily News, among other publications; was VP of corporate communications at MGM; and was associate dean and chief communications officer at the USC Marshall School of Business. Bloom graduated with honors from the University of Missouri School of Journalism.