Skip to comments.Commentary: Let the bidding begin for CNN! Who can turn around the Can Not Network?
Posted on 03/07/2003 5:06:18 PM PST by Dont Mention the War
On Feb. 18, Jamie Kellner, the top executive of Turner Broadcasting, of which CNN is a part, resigned, paving the way for former CNN leader Phil Kent to return to power.
On Feb. 13, CNN and ABC News broke off their much-discussed merger negotiations.
On Feb. 1, news anchor Aaron Brown sparked a firestorm when he didn't rush to go on the air to lead CNN's coverage of the NASA disaster even though his counterparts at CBS, NBC and ABC raced to represent their networks.
On Jan. 29, CNN founder Ted Turner resigned as vice chairman of network parent AOL Time Warner, promptly fueling speculation that he might try to buy back CNN.
On Jan. 13, CNN head Walter Isaacson stepped down, in the wake of Fox News (FOX: news, chart, profile) passing CNN in the television ratings.
CNN's splashiest headline may yet occur: the sale of the cable news network.
During a conference call marking Kellner's departure, Jeffrey Bewkes, the chairman of AOL's entertainment group, said CNN wasn't for sale. At the same time, Bewkes opened the door a crack by adding that any property might be for sale at the right price.
In the foreign language known as media-speak, Bewkes's statement is akin to an auctioneer slamming down a gavel and shouting, "Let the bidding begin!"
CNN certainly seems ripe for a change in ownership. It doesn't fit into AOL's strategy, which is built around subscription revenues. The roster of prospective suitors for CNN keeps growing and could eventually range from Turner himself to such large rivals as Viacom (VIAB: news, chart, profile).
The plot thickened this week.
On Feb. 19, Viacom president Mel Karmazin told Electronic Media, a trade publication, that CNN represented "an asset we would be interested in if it were available."
Translation: "Hey, Jeff Bewkes! How much do you want for CNN?"
Viacom spokesman Carl Folta said Viacom isn't currently negotiating to buy CNN.
CNN, which also operates the Headline News program, would fit in with Viacom's collection of TV brand assets. A cornerstone of Viacom's acquisition strategy has been to buy prominent cable TV operations.
Cable brands are coveted because their customers are, by definition, upscale (since they can afford to pay premium prices for cable TV hook-ups).
Further, the cable properties' niche programming attracts choice viewer demographics. Remember, Viacom happily scooped up BET, which is highly popular primarily among affluent African-American consumers.
Likewise, Viacom has quietly tried for years to add a Hispanic network to its stable. Viacom's assets also include Nickelodeon (which appeals to children and their parents), MTV (young adults), VH-1 (the Baby Boom generation) and so on.
Finally, CNN would represent a way for a media company to circumvent the Federal Communication Commission's nettlesome media ownership regulations, which the industry regards as being antiquated.
[Editor's note: Viacom is a significant investor in MarketWatch.com, the publisher of this report].
But Viacom may be a long shot to buy CNN. After all, if CNN and ABC News couldn't agree on terms to combine their news operations, pairing it with Viacom's CBS News isn't likely to be any easier.
AOL (AOL: news, chart, profile) insists that the personnel changes at CNN are part of an orderly process to repair the network, which has stumbled since America Online acquired CNN's former parent, Time Warner in January 2001. [By the way, AOL Chairman Steve Case resigned his position last month, too].
The America Online faction introduced ill-conceived entertainment flourishes in CNN's heretofore hard-news coverage. The plan didn't work because the sudden shifts from hard news to personality-oriented stories confused and, ultimately, turned off its audience.
While parent AOL desperately seeks order and calm after a year of turmoil of its own, CNN is constantly embroiled in some sort of a re-organization or a calamity, if not a juicy rumor.
AOL Time Warner (AOL: news, chart, profile) wants to project a can-do posture to the investing world. But, like an unruly child, CNN keeps acting as if its initials stood for the Can Not Network.
CNN could go a long way toward repairing its image if it could finagle the hiring of, say, Jane Pauley, who Thursday announced she was leaving NBC after 27 years at the Peacock Network.
The stars may still be aligning for Turner to re-claim CNN. AOL Chairman and CEO Richard Parsons has eased out Kellner and Isaacson and replaced them with Turner loyalists, Kent and Jim Walton, respectively. Walton is taking over as the president of the CNN News Group.
The people in the CNN newsroom in the Atlanta headquarters were all smiles when the news came that Kellner was exiting. He was always regarded as an outsider from the WB Network, which he will continue to run, and not a Ted Turner kind of guy. The staff would probably start opening champagne bottles if it became clear that Turner wanted to regain the reins.
The flurry of activity serves parent AOL's needs, too. The company is working hard to build goodwill in advance of its annual stockholder meeting in May.
Once, it might have been enough to throw the shareholders a bone by declaring that the company was dropping the anachronistic "AOL" part of its corporate name and restoring the preferred handle of Time Warner.
But the AOL stock has fallen 55 percent in the past year, clearly showing management that it needs more than symbolic gestures to make its long-suffering stockholders happy again. A sale of assets might do the trick.
For his part, Turner has tried to shrug off speculation by saying, he couldn't afford to buy CNN because AOL's stock plunge has caused his wealth to drop to a mere $2 billion.
Translation: "Hey, Jeff Bewkes! How much do you want for CNN?"
Let the bidding begin.
MEDIA WEB QUESTION OF THE DAY: WHO WOULD BE THE BEST OWNER FOR CNN - AOL OR SOMEONE ELSE?
Please send your reply to me at mailto:Jfriedman@MarketWatch.comJon Friedman is media editor for CBS.MarketWatch.com in New York.
LOL, love that idea! Think we could have a large enough fund raiser for that to become a reality? ;-)
Wrong, Wrong, Wrong!!!!!!!!!
3 words. Fair and Balanced.
But hey let them keep thinking that way for it will surely be the doom of the Clinton News Network.
"I must consult with the DNC first..."
Is Michael Savage the next step?