News Update

Analysis: CNN shakeup creates fresh challenges for WarnerMedia and Discovery

There are signs of TV news turmoil in every direction right now. Whoopi Goldberg is sitting on the bench at ABC. Rachel Maddow is starting a hiatus from her top-rated hour on MSNBC. And NBC is beginning two weeks of Beijing Olympics coverage that will be heavily scrutinized. But the biggest story on the TV beat, by far, remains the shakeup atop CNN. So let’s start there, with day two coverage of Jeff Zucker’s ousting.
The anger and disappointment that we described on Wednesday, in the hours after Zucker was forced to step down, only intensified on Thursday. Oliver Darcy and I put our heads together after 12 hours of calls, texts and chats with sources, and here’s how we summed it up: Within CNN, there is some frustration directed at Zucker, for not disclosing his romantic relationship with Allison Gollust when he should have. There is quite a bit of anger toward Chris Cuomo for what they believe his role may have been. But mostly the anger — among reporters, producers and managers who were close to Zucker — is directed at WarnerMedia CEO Jason Kilar and AT&T CEO John Stankey. We keep hearing variations of this phrase: “Jason took down the best boss I ever had.”
Of course, that’s not the unanimous view. CNN is a massive news operation and there are many opinions throughout the newsrooms — and many people believe it’s important that corporate standards are applied evenly, whether to presidents or production assistants. “Everybody’s replaceable” is a phrase we keep hearing.
But the predominant POV is that anchors, senior leaders and other staffers who worked closely with him feel adrift. The word “abandoned” is not too strong. My point: There’s a huge disconnect between the critical external coverage — blaming Zucker for boosting Donald Trump and ridiculing him for ratings declines — and the internal impression that he was a heat shield and a big-hearted leader and, more than anything else, the best producer at the network. That’s the challenge for WarnerMedia and Discovery going forward.

A “fresh start”

The big X factor in both the Zucker decision and what comes next, according to sources on every side of the situation, is AT&T’s impending spin-off of WarnerMedia, which sets the stage for CNN and the rest of Warner to be merged with Discovery in the coming months. One prevailing theory among media execs is that AT&T’s determination to complete the deal disadvantaged Zucker. “John Stankey cares about one thing and one thing only: Getting the deal done,” a senior exec told me on Thursday.
According to a source with knowledge of the matter, Discovery CEO David Zaslav learned of Zucker’s resignation only hours before it happened. CNBC, which first reported the timeline, observed that “Zucker’s departure could give Zaslav more freedom to decide how to proceed with CNN’s live programming and CNN+ without having to butt heads with a friend.” Joanne Lipman and Jeffrey A. Sonnenfeld put it this way in an NYT Opinion piece: “There is some speculation that Mr. Zucker’s office-romance resignation is simply a cover story to allow the company to get rid of him before WarnerMedia’s planned merger with Discovery.”
Here’s the key reporting I have: Discovery executives view Zucker’s departure as a “fresh start” for CNN, two people with knowledge of the matter told me. If the deal takes effect in April or May, as expected, Discovery is likely to appoint a new leader of CNN Worldwide at that time, the sources said.

The Malone factor

Oliver Darcy writes: “Buried in a lengthy report from Deadline’s Dominic Patten and Ted Johnson is an intriguing detail: ‘Discovery’s largest shareholder, John Malone, a critic of CNN, made it known that corporate procedures had to be followed to the letter in regards to Zucker, we hear. Being that WarnerMedia’s standards of business conduct require disclosure of relationships that develop with a boss and subordinate, Zucker’s goose was officially cooked.’ Discovery must legally remain at arm’s length from WarnerMedia until the deal receives government approval. One thing many people will immediately remember, though, is that Malone signaled late last year that he was not a fan of Zucker’s iteration of CNN. I asked a Malone rep for comment about both Deadline’s report and Zucker’s exit. ‘John has no comment,’ his spokesperson replied…”

Thursday and Friday’s developments

— While the Discovery deal is still pending, CNN is being overseen by Kilar and the trifecta of executives he elevated on Wednesday. The interim joint heads — Michael Bass, Amy Entelis and Ken Jautz — have been holding meetings and calls with some staffers, and have been candid about the many unknowns that exist at the moment…
— Bass began CNN’s AM editorial meeting on Thursday by praising Zucker and urging staffers to carry on the mission. He said he had heard Zucker described as the “captain of the ship” of CNN. At the end of the call, nearly an hour later, Bass added a reassuring note: “The ship is still sailing…”
— The New York Post, a longtime Zucker nemesis, published multiple stories on Thursday linking Zucker’s downfall to the Cuomo brothers’ scandals. And Rolling Stone published a lengthy story about “Zucker’s ties to Andrew Cuomo…”
— And/but: From a WarnerMedia standpoint, the matter of Zucker’s resignation is complete, end of story. “So, at the very least, they aren’t dropping another shoe,” Puck’s Dylan Byers wrote Thursday night…
— Both Zaslav and Stankey are booked Friday on CNBC’s “Squawk Box,” live from the AT&T Pebble Beach Pro-Am golf tour, during the 8am ET hour. This will be the first opportunity for the two executives to address the CNN shakeup…

A “Reliable” podcast conversation about all of this

Regular readers know that the “Reliable” team usually produces a podcast on Thursday afternoons. This week, the topic was obvious: The news in our backyard. I taped the podcast episode with Oliver Darcy, Sara Fischer of Axios, and Claire Atkinson of Insider. Atkinson likened the Zucker news to a crime scene mystery and said it’s “like ‘The Sopranos’ and ‘The Godfather’ all rolled into one story.” We also discussed ABC’s turmoil and Maddow’s hiatus from MSNBC. Tune in via Apple Podcasts, Spotify, Stitcher, TuneIn, or your favorite app…
Nine days ago: On January 25, Zucker and Gollust arrived together at CNN’s New York office for a very important meeting. On the agenda: An hours-long presentation of the new CNN+ streaming service for Kilar. The discussions and hands-on demonstrations were a success. Kilar loved the presentation, sources said. There were no outward signs of the C-suite meltdown that was about to take place.
Now: CNN’s top corporate priority is the same as it was last week, launching CNN+, one of the most ambitious ventures in the company’s history. But the backdrop is very different. Here’s my full story…

Additional reading

— “Zucker has retained crisis-communications pro Risa Heller…” (VF)
— Sara Fischer’s headline: “Misbehaving media men finally prove they aren’t invincible…” (Axios)
— “Experts say CNN’s Zucker broke a fundamental company rule,” NBC’s Doha Madani wrote… (NBC)
— Ben Mullin’s 30,000-foot view: “Zucker’s meteoric rise to the heights of TV news was paralleled by his sudden fall. Zucker’s close relationships with talent propelled his success, and he was undone by an investigation into the career of a star anchor he championed…” (WSJ)
— Jeremy Barr’s lead: “Jeff Zucker’s surprise ouster Wednesday left CNN with a leadership void and an irresistible mystery: How did a personnel investigation into Chris Cuomo, the network’s scandal-plagued former prime-time host, also end up toppling its president?” (WaPo)
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