On Tuesday, Cynopsis reported that John K. Martin, who succeeded Phil Kent as CEO of Turner Broadcasting had:
sent a memo to staffers on Tuesday alerting them to a restructuring that will be communicated in the next two months. "We'll start 2015 a more streamlined, nimble and efficient company," said Martin, "focused on driving programming, monetization and innovation." The exec's message reiterates his sentiment in a June 2 memo, describing a "Turner 2020" initiative focused on "reducing spending and maximizing growth and profitability."
Martin started his career as a senior accountant at Ernst and Young, LLP. He joined Time Warner in 2002 as Senior Vice President of Investor Relations. He worked his way up to Chief Financial Officer in 2008, overseeing almost everything other than TV and movie content.
Nevertheless, Time Warner CEO, Jeffrey Bewkes, who is a Stanford MBA, saw fit to make him the boss of a company whose success rests largely on the content it broadcasts.
Like most news guys, I have great distain for accountants. I often quote from Thomas Mann's Buddenbrooks, a character who says he knew Buddenbrooks would fail when the company appointed an accountant as its president.
That's what worries me about Martin and the future of CNN. CNN has had a very good August -- between Gaza and Ferguson, its ratings are pushing MSNBC deeper and deeper into third place. (In July, MSNBC edged out CNN for second place, its usual spot, even with 23 percent decline in its daily viewers.) Covering stories like Gaza and Ferguson the right way, which they are doing now, cost a lot of money.
I wonder whether Mr. Martin recognizes that and is ready to open the purse strings to support CNN's efforts. The higher ratings may bring in more money, but August is regarded as one of the slowest months of the year and CPMs are at their lowest point.
From my experience at CNN, I know it is impossible to predict the amount of money needed to cover the news. News events set their own costs and cannot be known in advance. All news companies have sums of money put aside for unexpected breaking news stories, but who could ever have imagined a situation where world-changing stories were occurring in the Ukraine, Gaza, Ferguson, while at the same time trying to cover ISIS and an Iceland volcano?
I hope Mr. Martin doesn't count on "reducing spending" on CNN news operations. Poor Jeffrey Zucker is having a hard enough time running his business on the budget he has. Cuts won't help him, or, I believe, CNN's bottom line.
MSNBC ratings have been declining for a while, and CNN has been making slight gains in its audience size. Now is not the time to begin "reducing spending," certainly not if you're trying to maximize "growth and profitability."
When one is dealing with "accountants" one never knows.