Warner Bros. Discovery CEO David Zaslav said CNN is rebuilding itself to be a news network that presents “both sides” of every issue rather than an “advocacy network” — comments coming as CNN continues to face a backlash over the town hall with Donald Trump last week.
Zaslav, speaking at the MoffettNathanson Technology, Media and Telecom Conference in New York, said that previously the overall impression of CNN’s brand was that it was “left-leaning.” That’s now changing, he said, citing a new YouGov poll finding an 11-point improvement in U.S. viewers’ trust in CNN. “Our view is, there’s advocacy networks on either side. We have the best journalists in the world. We need to show both sides of every issue,” he said.
CNN CEO Chris Licht and the rest of the leadership team are “working hard” to reposition the network, and “Republicans are back on the air” on CNN, Zaslav said. According to Zaslav, CNN hosted 75 GOP members during the contentious four days of voting for House speaker Kevin McCarthy, 41 of which went on CNN before they went on Fox News. “CNN should be the place that people come for the best version of the truth and for journalism,” he said.
Zaslav didn’t speak to the Trump controversy directly, but he previously had said about Trump, “He’s the front-runner — he has to be on our network. We’re happy he’s coming on there.” During Trump’s May 10 CNN town hall appearance, among other things he repeated lies about the 2020 election and called moderator Kaitlan Collins a “nasty person.” On Wednesday, CNN chief international anchor Christiane Amanpour joined the chorus of critics, saying “I still respectfully disagree with allowing Donald Trump to appear in that particular format” and said she would have “dropped the mic at ‘nasty person.’”
Asked at the MoffettNathanson conference about CNN’s ratings declines, Zaslav said that “CNN is a little bit different, and the economic makeup of CNN is different” than WBD’s other linear networks, because its revenue is more dependent on pay-TV affiliate fees than advertising. “But advertisers are interested in CNN again. They don’t want to be part of an advocacy network,” Zaslav said. “We’ve had meeting after meeting and they say, ‘We’re with you.’” CNN has a digital audience of 150 million, he added.
Speaking about Warner Bros. Discovery’s business overall, Zaslav said, “It’s hard to run a company successfully when you have a real bleeder, when you have a business that’s losing and you don’t have your hands around it,” Zaslav said. He said WBD had two unprofitable businesses — HBO Max and Warner Bros.
In the first quarter of 2023, the company’s U.S. streaming business eked out adjusted operating income of $50 million in Q1, and Zaslav said the segment will be be profitable for 2023, a year ahead of previous expectations. For the first quarter of 2023, Warner Bros. Discovery reported a net loss of $1.07 billion, which include $1.81 billion of “acquisition-related intangible assets” and $95 million of pre-tax restructuring costs.
Next Tuesday, May 23, Warner Bros. Discovery will launch Max, its big consolidated streaming service that will supersede the three-year-old HBO Max service and pull in content from Discovery+.
WBD’s assumption had been that it needed to be the strong third streaming player alongside Netflix and Disney. But the company’s content investment in HBO Max was too high and the retail pricing was too low, Zaslav said. Overall, the pricing of streaming services is “irrational,” Zaslav said. Consumers “are paying a lot less for content… than they were five years ago.”
Now, Zaslav said, “We have a scaled service that is about 100 million homes, and we have great, quality content.”
The launch of Max is aimed at reducing churn rates by providing an expanded lineup of content genres catering to all members of the household. In addition, WBD has live sports and news content that it can put on the streaming service to make it even stickier. The new Max also has a recommendation engine to suggest new content and adds a wealth of kids’ content. “As we go into this war, we have all this artillery,” he said.
Zaslav said for media companies to gain more scale in streaming, consolidation through M&A at this point is a nonstarter — so, he suggested, the industry needs to figure out a way to package services together in a bundle with “the No. 1, 2 or 3 products” for “a specific price,” in effect reinstantiating the cable-TV model. “If we don’t do it to ourselves, I think it’ll be done to us,” he said.
On the studio side, Zaslav said putting movies directly on streaming didn’t make financial sense and said that Warner Bros. is “making a turn” on its way to profitability. He touted the hiring of James Gunn as head of DC Studios — wondering aloud why Marvel didn’t put him in charge — and upcoming movie releases like “The Flash” and Greta Gerwig’s “Barbie.” “Now we have movies that we like,” he said, adding that Warner Bros. was an “underutilized” asset.
Sports is different from WBD’s other content businesses where it owns the intellectual property, Zaslav said. “Sports is a rental business,” he said. “You now have to look and see, where does it make sense?” He said NCAA March Madness, MLB and NHL are good deals for Warner Bros. Discovery; he said “the NBA is doing very well for us” but added, “We just have to be careful not to be silly” in reaching a new deal. None of the sports-rights deals
The ad market remains challenging, Zaslav said, adding that the “upfront is hard to predict” but asserted WBD was poised to “outperform” the market this year. His appearance at the MoffettNathanson conference came a day after Warner Bros. Discovery’s upfronts presentation, where execs (not including Zaslav) hyped the coming Max launch and touted a few new programming projects.
A topic that didn’t come up in the Zaslav’s conversation at the MoffettNathanson conference was the ongoing Writers Guild of America strike. The WGA had scheduled a picket line outside of Zaslav’s appearance at the MoffettNathanson event Thursday and the union plans to protest his scheduled commencement address at Boston University on Sunday, May 21. At Cannes, “Euphoria” producer Jeremy O. Harris urged the WBD chief to reach an agreement with the writers union in an interview with Variety. “David Zaslav, make a deal. That’s what I’ll say about Season 3 of ‘Euphoria.’ Make a deal, David. It’s easy. Just come to that table.”
Zaslav in 2022 remained among the highest-paid media execs, with a pay package totaling $39.3 million (though that was down from the whopping $246.6 million he earned in 2021).