CNN Could Dip Below $1 Billion in Profits for First Time in Years Amid Ratings Struggle: Report

Arnold Jerocki/Getty Images for Warner Bros. Discovery

CNN is on track to dip below $1 billion in profit this year, the first time the network would have done so since 2016, according to a new report on the company’s behind the scenes struggles.

CNN has had a rough year as its streaming service CNN+ was quickly folded after a corporate merger that landed CNN under the new umbrella of Warner Bros. Discovery. New York Times media reporter Benjamin Mullin, citing multiple people familiar with the network’s operations, reported that CNN’s parent company has been scrambling to find cuts in cost as the company looks for ways to restructure their operations.

According to Mullin:

Projections from S&P Global Market Intelligence say that CNN’s profitability is on pace to decline to $956.8 million this year. That would mark the first time since 2016 that the network has dipped below $1 billion in profit, according to three people familiar with its operations.

The original projection for profit for the year was reportedly $1.1 billion, a number CEO Chris Licht is set to miss by a large margin, according to the Times report.

That said, the Times also reported the target was revised to account for loses stemming from CNN+, and that Licht is on track to meet that new target:

Two people familiar with CNN’s operations said the network’s initial 2022 profitability target was $1.1 billion, which Mr. Licht is on track to miss by more than $100 million. But another person familiar with the matter said that by the accounting of company executives, Mr. Licht was on track to meet a profitability target of roughly $950 million for the year, since the network’s initial budget didn’t account for losses associated with launching the CNN+ streaming service.

Chris Marlin, a friend of Licht’s who previously worked for the homebuilding company Lennar, has been brought in to brainstorm new ways of generating profit as ratings lag behind competitors MSNBC and Fox News. Marlin, however, does not have experience in the cable news business. Among his reported recommendations are expanding business in China and putting together advertising packages for major tech companies.

CNN has brought in 639,000 viewers in primetime for the quarter, a number that is a decrease of 27 percent from the previous year. MSNBC’s quarter ratings are meanwhile down 23 percent, and Fox News is up by about one percent.

In remarks given to employees as he took over as CEO of CNN, Licht emphasized that ratings would not be the main priority for the network and he does not expect layoffs to be pushed by Warner Bros. Discovery.

“I don’t want producers making decisions based on what they think will rate,” Licht said in May, according to audio recordings reviewed by the Times.

This story has been updated with more information on CNN’s annual profit targets.