CNN's Zazification Has Failed, Could a Sale Be Next?

Warner Bros. Discovery's got a CNN problem amid management upheaval, dismal ratings, and no clear mission. Insiders say potential suitors -- from Tim Cook to Jeff Zucker -- want to pounce

A view inside CNN’s newsroom, which some think could be on the auction block (Photo: Warners Bros. Discovery)

Warner Bros. Discovery chief David Zaslav has one way to solve CNN’s leadership fiasco that’s torpedoed ratings and led to the ouster of several heavy-hitting journalists from the network’s prime time schedule. He could just sell the news division.

Zaslav, of course, is not a chief executive afraid of making big decisions. He pulled the plug on CNN’s streaming service last April, just weeks after Discovery closed its $43 billion acquisition of WarnerMedia from AT&T. Then a series of misfortunate internal events followed: Don Lemon’s botched reassignment, media powerhouse Brian Stelter’s ouster, and now CNN boss Chris Licht’s sacking on Wednesday.

The Zazification of CNN has wreaked havoc on what was once Ted Turner’s prized jewel. And the way out may be just unloading the news giant and using the profit to shore up WBD’s bloated balance sheet.

“For a number of reasons things didn’t work out, and that’s unfortunate,” Zaslav told CNN staff. “It’s really unfortunate, and ultimately that’s on me. And I take full responsibility for that. This job was never going to be easy, especially at a time of great disruption and transformation.”

To be sure, while rumors of a CNN sale have been floated for years, the C-Suite on Warner Bros.’ iconic Burbank studio lot has given absolutely no indication that a divestiture is on the table.

But, that hasn’t stopped Wall Street from pondering why Zaslav even wants to keep CNN in the first place. It is clearly being trounced in ratings by Fox News, with even upstart conservative network Newsmax beating CNN on some nights. One trader confirmed Wednesday’s 3% pop in WBD stock was fueled in part by speculation Licht’s departure foreshadows a sale.

“It’s just sort of hard not to be concerned,” said Lightshed analyst Richard Greenfield. “It makes you wonder why WBD even wants to own CNN.”

He pointed out in a note to clients Wednesday that the only reason why Zaslav would want to keep the troubled network is that it’s a cash cow. He estimates the division will generate more than $800 million in earnings before certain items, and represents about 7% of the company profit.

However, CNN’s profit comes from cable operators paying hefty fees for the rights to broadcast the news channel — and then makes money by selling advertising. Any deal would also come as the election cycle heats up, meaning a huge boost in linear TV campaign spots.

And that’s not a great strategy given how cord cutters are turning away from their cable providers in the age of streaming. There is no way WBD can broadcast CNN on its streaming platform MAX without cannibalizing content that cable operators are paying top dollar for. (Streamer CNN+ was a shadow newsroom inside CNN, with all original content not seen on broadcast).

Greenfield said “CNN is a distraction” and potentially heading toward a ratings collapse. It also could generate a hefty sale price, with company insiders expecting it to fetch upwards of $10 billion just a few years ago.

So, who would have pockets deep enough to pull off that kind of a deal?

Insiders — including former and current CNN executives, investment bankers, and analysts — are buzzing about a pretty diverse mix of suitors. This includes CNN boss Jeff Zucker and former Rupert Murdoch lieutenant Jesse Angelo; major media barons like Michael Bloomberg and Amazon’s Jeff Bezos; and conglomerates like Apple, Comcast, Disney, Yahoo and Verizon.

There’s only one person who might have a line on potential suitors lining up — investment banker Aryeh Bourkoff. His LionTree LLC has become one of the nation’s top M&A advisory boutiques that specializes in media (he orchestrated AT&T’s sale of WarnerMedia and is a close friend of Zaslav).

Bourkoff, of course, isn’t talking. A spokesman did not immediately return emails after Licht’s firing on Wednesday. But the M&A kingmaker, according to multiple sources, would definitely be the first phone call Zaslav makes should he want to jettison CNN from WBD’s lineup.

So who would Bourkoff be entertaining calls from should his pal Zaslav moves forward with a deal? Here’s a quick guide to potential CNN paramours, according to people plugged into Warner Bros. Discovery and inside the news network:

Jeff Zucker

It’s no secret that the former CNN chief, who resigned after a consensual affair with another newsroom executive, wants back in. He’s already an almost de-facto CEO with regular communication with the newsroom’s journalists and business leaders who were opposed to Licht’s management style. One former high-ranking CNN editor said on background the scuttlebutt is Zucker would pounce if CNN was sold between $6 billion and $7 billion. He is currently raising about $1 billion in funds for a new venture called RedBird IMI, and is said to be kicking the tires on acquiring everything from The Washington Post to Punchbowl News. It wouldn’t be unexpected if he found deep-pocketed partners to acquire CNN. It would be, as Ricardo Montalban famously said about revenge in Star Trek II: The Wrath of Khan, being “a dish best served cold.”

Jesse Angelo

Angelo stepped down in March as global president of news & entertainment at Vice Media Group. He held the job since 2019, after a long career as one of the Murdoch clan’s top news lieutenants who steered the now defunct digital news property The Daily and led the New York Post. His new venture, Checker Media, wants to develop and fund original intellectual property and consult with companies on content. He followed Hollywood stalwart Nancy Dubuc who exited Vice a few months earlier. Again, like Zucker, he’d need some pretty deep-pocketed investors to make anything work (maybe he teams up with Zucker?).

Jeff Bezos or Tim Cook

Tim Cook now controls a $3 trillion market valuation at Apple. Jeff Bezos is one of the universe’s richest men at Amazon. Both moguls could use CNN to add content and cultivate more influence. This is pocket change for them. There’s been ongoing speculation that Cook might buy Disney, in what would be Iger’s biggest deal yet. Bezos certainly has enough financial firepower to take CNN into his media/retail empire, just like he did in acquiring The Washington Post. Insiders at Warner Bros. Discovery — and the team of investment bankers that work with the studio — easily have both billionaires on their short list.

Michael Bloomberg

Bloomberg Media CEO Justin Smith is swiftly expanding Bloomberg's nonterminal business. Smith is in a battle, in the age of the Google/Facebook duopoly, that relentless innovation and invention are imperative for success. He believes that the benefits of disruption should not be limited to the dominant tech platforms alone. One aspect of Bloomberg's growth that has received little attention is the global licensing of its content and platform. While this expansion primarily revolves around business news, a potential partnership between Bloomberg and CNN could establish dominance in both general news and business sectors.

Randall Stephenson

Comcast wants greater dominance. The owner of NBC and MSNBC holds an interesting position. On one hand, it already possesses the necessary resources for national and global news gathering, as well as national distribution. On the other hand, there's a line of thought that believes in the advantages of consolidation, where bigger is always considered better. Instead of playing second fiddle to CNN in terms of total audience and other categories, why not merge these two long-established news organizations and create a singular digital/TV operation that truly dominates on a global scale?

Bob Iger

It’s hard to resist putting Iger in the mix — after all the former television weather man loves the news and has build a reputation as one of Hollywood’s most renowned dealmakers. Disney is actively pursuing additional film and TV assets to bolster its content offerings for global distribution, as it competes with Netflix and the growing digital-only movie industry. His acquisition of Fox assets are a clear indication of this strategy. While Disney has faced challenges with its cable sector, such as what the hell to do with ESPN, it still retains ownership of ABC News. In the digital era, one could argue that ABC requires greater scale or even a potential sale to ensure its survival and relevance.

A.G. Sulzberger

Ken Doctor, the authority on media deals, called this back in 2012 when he was at NeimanLab. He said at the time: “The marketplace is pushing companies toward convergence. The worlds of completely separate TV (video), newspapers/magazines (text), and radio (audio) have simply been overwhelmed by the reality of consumption devices that bring all three together for us — the iPad being the current crown of creation. But the legacy roots of each medium has made it really tough to either (re-)build truly multi-platform companies or forge newspaper/TV alliances (Tampa, Chicago, etc.) that work. Logic compels greater multi-platform creation; inevitably that will mean new combinations of legacy companies, even as legacy companies try to remake themselves internally.” A New York Times and CNN combination would instantly become the globe’s primary, authoritative source for news, according to several sources in both newsrooms.

Jim Lanzone

Another age-old rumor is that Yahoo has been interested in acquiring CNN since Marissa Mayer was chief executive. Lanzone, who became the Internet giant’s CEO in 2021 after a stint leading Tinder, is already lording over one of the biggest purveyors of news that exists. Yahoo, with about 200 million monthly unique visitors to its news operations and a stand-alone broadcast operation, would obviously be sniffing around at potential synergies. Not that Yahoo is exactly known for making smart legacy media acquisitions in the past (hello, Yahoo, Verizon, AOL, and a series of mismatched news outlets). Tom Dotan at The Information was a proponent at one point: “It becomes more likely that some tech company will shack up with some media company, my bet is that Yahoo will buy CNN," he posted at the time. "The result, in all likelihood, wouldn't be pretty, but at this point in the tech cycle, it may be inevitable." And you might as well throw Verizon into the hunt as well.

Let the games begin.