Can CNN's new CEO save the cable news channel?
Mark Thompson is widely credited with transforming the New York Times into a digital newsroom as print journalism died a slow death in the online era. Now, after becoming CEO of cable network CNN, he will lead another historic, global news organization as changing market forces pose an existential risk to its future.
David Zaslav, the CEO of Warner Bros Discovery, which owns CNN, pointed to Thompson’s previous experiences, which also included leading the BBC, when announcing his hire on Wednesday. “Mark is a true innovator who has transformed for the digital age two of the world’s most respected news organizations,” Zaslav said in a statement.
Dan Ives, managing director of investment firm Wedbush Securities, called Thompson a “no-brainer CEO pick.”
Prior to leading the New York Times, Thompson was the BBC’s director general from 2004 to 2012. He joined the BBC in 1979 as a production trainee and rose the ranks over a more than 30-year career during which he ascended to the top job. In 2012, Thompson was appointed CEO of the New York Times Company after its previous CEO, Janet Robinson, stepped down unexpectedly.
At the New York Times, Thompson spearheaded a digital overhaul that included an expansion into podcasting, shopping recommendations through the acquisition of online review site Wirecutter, and the addition of new digital subscriptions like NYT Cooking. In a 2021 interview, Thompson said his New York Times strategy was “smartphone-centric,” in that it was based on mobile devices as the main source of consumers’ attention. “It’s a puzzle,” he said. “How do you get the New York Times—this kind of big, rich thing—how do you make a great experience on a phone?”
The answer it seemed was to diversify as much as possible. A major part of Thompson’s success at the New York Times involved adding new kinds of content. Some notable examples include the “The Daily” podcast—whose Tuesday episode is No. 1 on the charts of Apple Podcasts’ news section—and building a dedicated app for the paper’s popular crossword puzzle. The Times was trying to “take the brand and the intellectual property and think of lots of different ways of exploiting it and getting it to different people in different ways,” he said in the same interview.
To enable his vision of a multifaceted New York Times, Thompson preferred to mostly spend his way out of turbulence rather than cut costs, as many other newspapers had done at the time, even though it did lay off approximately 70 employees in June 2020. “We’ve got a simpler idea, which is closer to what Netflix and other TV streaming services are up to,” he told CNBC in an interview when he was still New York Times CEO. “Which is you invest in great content, you build your content, you make it attractive to users, you make it easier for those users to subscribe, you get more and more subscribers and that enables you to invest in more great content. We’ve found a way of getting into a virtuous circle of growth rather than what I’m afraid is looking like a vicious cycle of decline for much of American newspapers.”
That view underscores Thompson’s approach to leading the paper: The New York Times was among the most trusted journalism brands and he was convinced that?? consumers would recognize that. “I had a lot of almost doctrinal faith in the fact that it was one of the world’s best newspapers—if not the best—and people would pay for it,” he said of taking the job.
That vision yielded some undeniable results. When Thompson took over the New York Times it had 640,000 digital-only subscribers, and by the time he left in 2020 that number had ballooned to 5.7 million. (Currently the publication has 9.9 million print and digital subscribers) Annual digital subscription revenues grew from $113 million at the end of 2012 to $460 million in 2019, a year before he left; total subscription revenue surpassed $1 billion over the same time period.
Buoyed by the growth, the company’s stock price increased almost 400% during Thompson’s tenure.
New York Times publisher A.G. Sulzberger praised Thompson’s ability to turn great journalism into a healthy business. “Mark has an impressive record of finding ways to ensure cultures of journalistic excellence and business innovation flourish alongside each other,” Sulzberger told Fortune in a statement.
To helm CNN, the embattled network that ousted two chief executives in 16 months, Thompson will have to combine his expertise turning around high-profile newsrooms with his experience in TV journalism at the BBC. The problems CNN faces are dire. They include industry-wide challenges like cord-cutting and the rise of streaming, as well as internal issues, notably all-time low morale.
CNN did not respond to a request for comment.
Under former chief executive Chris Licht’s tenure, which lasted just 13 months, morale cratered after he, in an extensive profile published in The Atlantic, criticized the newsroom’s political coverage. The problem only worsened when the network decided to host a town hall with former President Donald Trump moderated by the network’s Kaitlian Collins that was widely condemned for the lack of fact checking Trump in real time. Even CNN’s longtime anchor Christiane Amanpour openly criticized the decision to hold the event.
Since Licht’s departure in June, CNN has been run by a quadrumvirate of longtime CNN execs: Amy Entelis, Virginia Moseley, Eric Sherling, and David Leavy—a well-known lieutenant of Zaslav’s. Some staffers had hoped the unusual arrangement would remain in place at least through the 2024 U.S. presidential election, according to CNN’s own reporting on Thompson’s appointment.
Ives, the Wall Street analyst, was confident Thompson would settle the internal strife at CNN. Thompson “is a great fit and should instill confidence internally and externally,” he told Fortune. “It’s been a game of magical chairs at CNN at the top but there is strong content and talent to build a turnaround story.”
The myriad personnel and organizational issues are set against a backdrop of a turbulent cable TV industry that, like newspapers before it, failed to anticipate all the changes technology would bring. Since the advent of streaming, other than during certain periods during the Trump administration, cable news bled viewership, as it struggled against a broader decline in cable television. This year CNN reaches an estimated 70 million cable households; that number is expected to fall by about 5.6% to 66 million in 2024, according to Variety. A Nielsen report released in August showed that for the first time broadcast and cable television accounted for less than 50% of total TV usage in a single month.
Licht’s tumultuous tenure left CNN third in the ratings for cable news behind Fox News and MSNBC, according to Nielsen data from July. So far, CNN has struggled with its efforts to play catch up in streaming. It axed the streaming service CNN+ just a few weeks after it launched in 2022. In September, CNN’s news content will be hosted on the newly rebranded Max streaming service, as parent Warner Bros. Discovery tries to replicate the experience of cable TV with a catchall streamer. The opportunity, though, is in live television, the last holdout on cable in terms of must-watch programming. Since 2018, news has been the top genre of content consumed by live audiences, according to data media analytics firm Comscore.
The upcoming U.S. presidential election promises to be a boom time for cable news channels in attracting more viewers, which would allow the network to charge a premium for ad space. CNN is no exception to the link between the electoral cycle and cable news ratings. In November 2020, the network recorded its highest average monthly ratings since August 2016, according to Comscore. CNN’s lowest ratings over that same time period came in December 2016, the month after the presidential election that Trump won. It remains to be seen how Thompson will adjust to the narrower preferences of a cable news audience, which generally wants to watch just the biggest events of the day. “We’re not like those cable networks that’ve been living off the Trump story and nothing else,” he said in the 2019 CNBC interview, referring to the New York Times’ coverage.
The key to a successful third act of Thompson’s career may lie in exactly that—figuring out CNN’s audience. “Trust the audience, trust that people are interested in serious news,” he said at an event hosted by the Paris Institute of Political Studies in 2017. “Build your business model on the belief that quality news is a quality product, which that people and ultimately that people will pay for.”Bringing a newspaper into the digital age…successfullyAt CNN Thompson will face internal problems and industrywide headwinds