David Zaslav had been the chief executive of Warner Bros. Discovery for a few hours when he learned he had a problem.
On April 11, the day his newly merged company began trading on the Nasdaq, Mr. Zaslav greeted New York employees with pasta and ice cream bars, giving a quick rallying cry for his new allegations. He was on his way to Washington, the next stop on the coronation journey, when a call came.
His team just got a first look at data from CNN+, the much-hyped subscription streaming service launched two weeks ago, and the news was grim. Despite a million-dollar advertising campaign and a large staff like Chris Wallace, fewer than 10,000 viewers were watching at any one time. they were recommending cold eyes review,
Three days later, shortly after Mr. Zaslav appeared for a Rah-Rah Company town hall with Oprah Winfrey, he held his deputies inside a low-slung stucco building in Burbank, California, on the Warner Brothers studio lot. gathered, and said he agreed with his conclusion: close it.
The near-instant collapse of CNN+ was one of the most spectacular media failures in years, a $300 million experiment that came to an abrupt end and career chaos. The corporate tug-of-war over its fate has exposed deep philosophical divisions about the future of digital media, as executives struggle to navigate a rapidly changing marketplace where technology and consumer habits change day by day.
And it reflects the strange regulatory dance of merging the two media giants, even as a high-profile project hurtles toward completion. Discovery had some concerns about CNN+, but was constrained from directing one of its streaming competitors until the deal closed.
CNN must now emerge from one of the most chaotic periods in its history: the firing of its top-rated anchor Chris Cuomo; the expulsion of its longtime president, Jeff Zucker, over an affair with a colleague; and the absorption of its parent company WarnerMedia by Mr. Zaslav Discovery.
Collateral damage includes the long friendship between Mr. Zaslav and Mr. Zucker, business and a once-in-a-lifetime ally. Mr Zucker, who once described the Discovery chief as “the best friend one could ever wish for, and I am lucky he is mine,” has not spoken with Mr Zaslav since his February 2 exit.
Inside CNN, employees remain stunned. “It’s not easy news, and I don’t want to downplay it,” the network’s new president, Chris Licht, told CNN+ staff in a solemn call announcing the shutdown. “I’m proud of it,” he said. “I am proud of this team, and I am overwhelmed by what this means for you.”
The account is based on interviews with a dozen people who are familiar with the rise and sudden decline of the streaming service. He spoke on condition of anonymity to share details of the sensitive conversation.
CNN+ was introduced to the world on March 28, the day before its debut, with a grand party on the 101st floor of 30 Hudson Yards, the futuristic Manhattan skyscraper that houses CNN. Network stars posed for pictures by the CNN+ logo, a giant fiberglass sculpture in New York City, stretched beneath their feet.
But inside the network, the service was missing its most prominent champion.
Mr. Zucker, CNN+’s greatest lawyer, is out. WarnerMedia Chief Executive Officer Jason Keeler was a streaming evangelist; He led a toast at a CNN+ party, but it was his last public appearance before leaving the company a week later. What was left to defend the platform internally was its in-house mentor, Andrew Morse, CNN’s chief digital officer, who previously ran Bloomberg Television.
Understand the turmoil on CNN
It shouldn’t have gone like this.
CNN revealed plans for CNN+ in July 2021, billing it as the network’s most significant venture since its founding in 1980. Mr Zucker called it a bold and necessary step in subscription-based digital news, at a time when consumers were abandoning traditional cable television. Hundreds of new employees will be brought in to produce eight to 12 hours of live programming a day.
Importantly, AT&T — which controlled WarnerMedia and CNN at the time — was onboard.
AT&T had already agreed to convert WarnerMedia to Discovery and leave the entertainment and news business. But in June 2021, leaders of the telecom giant met with Mr Zucker in Dallas and approved a $1 billion budget over four years for CNN+.
Mr. Zucker’s hiring spree attracted stars like Eva Longoria, who had signed on for the Mexico-based travel show, and Audie Cornish, a former NPR star. A start date of March 2022 was set.
Then Mr Zucker abruptly resigned, followed a week later by his top deputy, Alison Golst. In addition to not disclosing their relationship, the two were accused of violating the network’s news standards. (Both denied this.)
Mr. Morse, who oversees all of CNN’s global digital operations, decided to act. In late February, and again in early March, he asked if his team could share their vision for CNN+ with Discovery executives before the merger was completed. He thought the best way to explain to Discovery was that CNN+ represented the future.
Both times, the requests were not accepted. In transactions between major companies, executives are wary of violating rules except “gun-jumping”: coordinating their business activities in the critical days before deals close.
Then came an ominous sign. On March 14, two weeks before CNN+ debuted, Discovery’s chief financial officer, Gunnar Wiedenfels, appeared at the Deutsche Bank conference and announced that Discovery+ and WarnerMedia’s HBO Max had been merged into a massive “blowout” mega-platform. Will go
Mr. Wiedenfels did not mention CNN+. After that conference, Mr. Morse asked again if his team could speak with Discovery; For the third time no such meeting took place.
His concerns were well founded.
Discovery executives suspected CNN+. Mr. Zaslav and his team had experienced bad luck with single-topic streaming services; Their niche platforms dedicated to cars, food and golf were expensive and ended in failure.
A cable TV pioneer known in the industry as “Zas”, Mr. Zaslav devised a deal bringing together Discovery and Warner Bros., a late-career move that saw him become one of the most powerful people in media. one was made.
Discovery believed in the power of big-tent streaming services, especially given the crowded market. It was also estimated to have $55 billion in debt stemming from the merger, and required executives to find $3 billion in savings.
Despite the skepticism emanating from Discovery, Mr. Killar – who oversaw Mr. Zucker’s exit and gained a reputation as an iconoclast – did not consider CNN+’s debut to be scrapped. He assumed that Discovery fully understood when it agreed to the merger that WarnerMedia was building an ambitious new digital CNN product.
In addition, Mr. Killar did not think that CNN+ conflicted with Discovery’s “all in one” streaming philosophy. He had already planned to include some CNN+ content with HBO Max, while still offering CNN+ as a stand-alone service.
He forged ahead. “It will be hard to overstate how important this moment is to CNN,” he wrote on Twitter on the day the service was launched.
Mr. Zaslav and his team became confused. Discovery was ready to take over the company within weeks. Why not just delay?
Still, Mr. Zaslav’s colleagues acknowledged an advantage: they’ll get a look at CNN+’s performance, which is similar to a movie’s opening-night box office. Maybe once they look under the hood, CNN+ will exceed their low expectations.
Shortly after the merger closed on April 8, Discovery executives began asking for data on CNN+’s progress. He didn’t like what he saw. In a disturbing sign, downloads for the service were dwindling, despite the big marketing push.
On April 11, as the “WBD” ticker symbol went live on the Nasdaq, CNN+ executives met with the new management of Warner Bros. Discovery and made their case, an opportunity they had been seeking since February.
Mr. Morse said CNN+ had achieved 150,000 paying subscribers in its first two weeks and was on track to meet its first year goals. He argued that consumers were willing to pay for high-quality digital news (CNN+ costs $6 per month), citing the success of The New York Times.
Mr Zaslav’s representatives – including CNN’s new chairman Mr Licht and Discovery’s longtime head of streaming JB Perrett – were unconvinced. They said they are suspending external marketing for CNN+ for two weeks pending formal review,
The next day, some unsolicited statistics were reported by CNBC and Axios. CNN officials were disappointed. And he became suspicious of his new superiors from Discovery, believing that he had leaked the data to make an excuse to shut down the service.
Mr Zaslav arrives at the Warner Bros. lot in Burbank on April 14, after meeting with CNN employees in Washington and Atlanta. He recruited Ms Winfrey, who formed his own cable network with Mr Zaslav and Discovery, to interview. He was put on stage with the staff for an introductory town hall.
Later that afternoon, Mr. Zaslav called his brain trust into a building where Jack Warner, an earlier-era Hollywood mogul, worked from the 1930s to the 1960s.
They agreed that CNN+ is eating up too many resources, and that its potential as a digital destination can’t justify its small audience and huge cost. Mr Perrett called from London and said it was time to cease operations. Mr. Zaslav agreed.
In the following week, the Zaslav team finalized the details. Mr. Licht, with Warner Bros. Discovery Chief People Officer Adria Alpert Romm, argued that CNN+ employees should get three months’ pay and a chance to stay at the company; Anyone laid off will receive an additional six months of severance.
Early on April 21, Mr. Licht reported to top CNN executives that the service would end on April 30. Even Mr. Morse was not told until that morning. Mr Licht called Mr Wallace, Miss Cornish and other top anchors to say CNN would try to find a place for them. The shows hosted by Ms. Cornish and Ms. Longoria had not yet started.
Supporters of CNN+ lamented that the streaming service had not been given much of a chance, and argued that the decision was detrimental to the CNN brand, a wrong move that would not prepare the network for a future where some Americans still watch cable TV. lets see.
For the rank-and-file, it was a brutal blow. Speaking of donuts, employees were told by CNN+’s head of programming, Rebecca Kutler, that if they don’t have a specific responsibility, they don’t need to come to the office.
Kasie Hunt, who left her MSNBC job for CNN+, finished his last show With a tribute to our employees on Friday. “They left stable jobs, some of them moved across the country, all of them took huge risks,” she said. “If you’re hiring journalists, they’re best in class.”
