The cable news industry is crumbling before our eyes.
One network thought it was immune to the carnage.
But CNN just got the wake-up call that could end everything they know.
Warner Bros. Discovery announces major split that spells doom for CNN
Media mogul David Zaslav dropped a bombshell on Monday that sent shockwaves through the halls of CNN.
The Warner Bros. Discovery CEO announced he was splitting his media empire into two separate companies.
Zaslav is keeping the profitable streaming and studio business for himself while dumping the struggling cable networks into a separate company.
That means CNN, along with TNT, TBS, Food Network, and HGTV, is being shoved into what industry insiders are calling a "spinco-s***co" – a collection of declining cable assets saddled with debt.
Even worse for CNN employees, Zaslav is handing control of their fate to his cost-cutting Chief Financial Officer Gunnar Wiedenfels.
"The question from many, whether in verbatim or in spiritu, was: What does this mean for us?" wrote media insider Dylan Byers, describing the flood of panicked text messages he received from CNN employees after the announcement.
The writing has been on the wall for years, but CNN’s anchors and executives were apparently the last to see what everyone else could plainly observe.
CNN’s astronomical salaries are about to come crashing down
The network’s bloated payroll has become a running joke in media circles.
Anderson Cooper reportedly makes $20 million per year to read the news to fewer than a million viewers each night.
Jake Tapper makes around $7 million per year under his current contract that was renewed without a pay increase.
But those days are numbered under Wiedenfels’ leadership.
"Why, for instance, would Gunnar pay Anderson Cooper $20 million a year when Kaitlan Collins draws the same ratings at roughly a fifth of the salary?" Byers noted in his analysis.
The math simply doesn’t add up anymore for a network that can’t even crack a million viewers during prime time.
Fox News consistently delivers four times CNN’s audience with far less expensive programming focused on studio shows rather than costly international news gathering.
CNN’s foreign bureaus, extensive infrastructure, and army of producers all cost enormous amounts of money that can no longer be justified by the network’s dismal ratings.
"With the industry in inexorable decline, CNN’s ratings at a nadir, and younger audiences turning to user-generated schlock on YouTube and TikTok for news, those costs are increasingly hard to justify," Byers explained.
The beginning of the end for the cable news giant
Wiedenfels has built his reputation as a ruthless cost-cutter who squeezes every penny out of struggling media properties.
Him being tapped to run the cable networks division sends a clear message about CNN’s future.
"Zaslav’s decision to appoint his chief financial officer as C.E.O. of the networks company is the greatest tell of his true intentions," Byers said.
Massive layoffs, office downgrades, and budget cuts are likely coming for CNN that will transform into something more akin to the defunct HLN.
"Over time, it will look more and more like HLN, which is one reason HLN no longer exists," Byers said.
CNN’s expensive talent contracts and international news gathering operations are living on borrowed time.
The network that once dominated breaking news coverage during major events has been thoroughly outpaced by Fox News, even during international crises where CNN previously held the advantage.
CNN executives were apparently the last to get the memo
Perhaps the most damaging revelation in Byers’ analysis was how CNN’s own leadership remained oblivious to their network’s decline.
At a Washington dinner more than a year ago, a private equity executive delivered a "very stark analysis of CNN’s descent" and called it "a clearly declining asset."
"I looked around the table and saw the vexed and horrified faces of a few of the network’s most well-known talent and executives," Byers recalled. "Ironically, they were the last to get the news."
This disconnect between CNN’s self-perception and reality has been evident for years.
The network’s leaders continued acting as if they were still the must-watch destination for breaking news while their ratings plummeted and competitors ate their lunch.
Current CEO Mark Thompson’s promises of a digital transformation and subscription pivot seem increasingly irrelevant in a company focused purely on cable profits.
The future looks grim for CNN employees
The transformation ahead will be painful for everyone involved.
Byers painted a bleak picture of what’s coming: "significant layoffs, diminished resources, and persnickety indignities: shittier offices, fewer perks, and more scrutiny of the T&E."
The network will likely become part of a larger bundle of declining cable assets that get passed around between different corporate owners.
Eventually, CNN may be merged with other struggling cable networks or sold off to companies that specialize in managing declining media properties.
The glory days of CNN as a prestigious global news operation are clearly over.
What emerges from this corporate reshuffling will be a shadow of the network that once set the standard for cable news coverage.
CNN’s employees are about to learn a harsh lesson that many other media workers have already experienced: the industry has fundamentally changed, and the old business model is dead.
The network that helped create the 24/7 news cycle is now struggling to survive in the world it helped create.