CNN chief Chris Licht tells staff to brace for budget cuts
By Kevin Johnson
2 September 2017
CNN is facing the prospect of massive staff layoff and budget cuts as it struggles with the $1 billion in costs stemming from its highly profitable ratings business and other sources of revenue.
According to CNN’s third-quarter 2016 earnings, the network has more than $400 million in costs related to the production of CNN News and CNN International (CNNI), the international arm of the network. This figure also includes costs related to the production of CNN Business, CNN’s prime-time entertainment show.
The news network has a total cost of $738 million in the three-month period. The 2016 quarter includes CNN’s $1 billion acquisition of Current TV, and $10 billion in debt service for that acquisition.
On Monday, CNN’s incoming Chief Executive Jeff Zucker announced that he would be cutting $500 million from the network’s top ranks to balance its budget, as he told CNN employees in an internal memo. Zucker also announced the network would be cutting about 1,400 jobs as part of a restructuring that began in October 2016.
The layoffs include CNN employees from the production divisions, most notably CNN’s in-house production staff. A source familiar with CNN’s financial status told Reuters that the network would be looking to outsource production work to other firms with expertise in producing prime-time entertainment shows.
The layoffs will begin in earnest in July, according to a source knowledgeable of CNN’s plans, and will be finalized over a series of weeks. Zucker, the network’s first black Chief Executive, also announced that he would be stepping down from his CEO role, effective immediately.
CNN’s news division had been an unmitigated financial success since its merger with the Turner Broadcasting System in September 2005. In January 2015, CNN reported that its revenue from news on the news and entertainment side had soared 50 percent in 2015 while its revenue from news and information had risen by 38 percent in 2014. However, in that time, CNN’s profit from entertainment was down by nearly $700 million, while