After 13 tumultuous months at the helm of CNN, Chris Licht is now officially out as the network’s CEO. And while the last straw may have been last week’s devastating 15,000-word profile in The Atlantic, the camel’s back had been breaking for some time.
Another likely factor behind Licht’s demise is the simplest one of all: money.
According to data compiled by advertising research firm MediaRadar, CNN experienced a nearly 40 percent drop in digital and on-air advertising revenue through the first four months of 2023 compared to the same period last year, which was before Licht took over as network chief.
Licht, the “wunderkind” producer behind Morning Joe, CBS This Morning and The Late Show with Stephen Colbert, was brought on by Warner Bros’ Discovery chief David Zaslav last year to replace longtime CNN president Jeff Zucker. From the start, Licht was at a disadvantage with the network’s staff, as Zucker—who was forced out over a previously undisclosed relationship with another employee—was immensely popular among CNN’s rank-and-file.
Making matters worse, Licht was also tasked with implementing Zaslav’s vision of revamping CNN from the adversarial, “anti-Trump network” it had been since 2016 into a neutral, middle-of-the-road supposed arbiter of truth. In other words, an antiquated version of cable news that really has no place in today’s highly fractured and polarized news landscape.
While a less-polarizing news product would supposedly be more welcoming to advertisers, it also resulted in a significant drop in television ratings. During the first quarter of 2023, CNN only averaged 478,000 total viewers daily and 94,000 in the key 25-54 advertising demographic, down 27 percent and 40 percent respectively from what the network averaged in 2022’s first quarter. (The viewership has only continued to drop in subsequent months this year.)
According to data MediaRadar shared with The Daily Beast, over 2,000 companies spent $312.6 million on digital and television advertising with CNN through April 2023. This was a year-over-year decrease of 39 percent compared to the nearly $513 million spent during the same period in 2022. And, quite coincidentally, it matched up almost identically to the drop in CNN’s demo ratings during that same time period.
While Fox News likewise saw a drop in television ad revenues in this year’s first quarter year over year, it was only 6.8 percent compared to 2022. The network’s parent company, Fox Corp, easily made up for that with an advertising revenue increase of 43 percent, thanks to Fox’s broadcast of the Super Bowl. NBC Universal, the parent company of CNN cable news rival MSNBC, also experienced a slight dip of 6.1 percent in U.S. ad revenue.
Advertisers invested $232.5 million in CNN during the first quarter of this year, according to MediaRadar, marking a 35 percent decrease from 2022’s first quarter. Additionally, this past April, the advertising amount dropped to just $80 million, a 48 percent drop compared to last year’s $153 million. Through April 2023, the average monthly ad revenue is $78 million, a marked reduction from the $128 million monthly average during the corresponding period in 2022.
Looking back at early 2022, advertising investment clocked in at $112 million in February, which is when Licht was first announced as the incoming CEO. The advertising spend increased monthly until May, which is the first full month Licht actively took over as chief of the network.
That month saw an 18 percent decline month-over-month compared to April 2022. Outside of August and November, which were both up double digits, the subsequent months last year all saw month-over-month declines.
“Our data analysis suggests a significant downward trend in CNN's ad revenue during Chris Licht's tenure, reflecting substantial declines both in total spend and in the number of advertisers,” MediaRadar CEO Todd Krizelman said.
Just as troubling for CNN is the fact that they’ve lost not just advertising dollars, but advertisers in general. According to MediaRadar, there was a 23 percent drop in the number of companies advertising with the network compared to the same period last year. Additionally, nearly 2,000 companies that ran ads with CNN last year have not invested at all this year, representing just a 29 percent retention rate thus far.
Beyond that, the network is also seeing fewer companies who are willing to invest larger amounts of advertising dollars. Through April 2022, 68 advertisers had spent at least $2 million in digital and on-air ads with CNN, accounting for $236 million during those four months. During the same timeframe this year, only 17 companies invested at that level for a total of $95 million, a troubling 60 percent decrease.
Even more dire, perhaps, is the fact that major corporations such as Thumbtack, The Walt Disney Company, Apple and Cisco Systems have all dropped their ad expenditures with CNN by 90 percent year-over-year, according to MediaRadar.
While concerns about decreasing advertising revenue have weighed on media companies in the past year over concerns of a slowing economy, leading to mass layoffs and cost-cutting across the industry, the 2023 U.S. ad market is still projected to grow by 3.4 percent this year. Additionally, digital advertising experienced double-digit growth in 2022 and U.S. ad spending is expected to reach over $270 billion this year.
Meanwhile, with plunging TV ratings, CNN had indeed projected a downturn in advertising dollars for 2023, but not nearly what this year’s first few months had shown. According to market research firm Kagan, CNN’s television ad revenue was projected to drop about five percent to $562.6 million. (Fox News, which has also seen a drop in ratings in recent months since Tucker Carlson’s ouster, is also expected to see a dip in ad spend.)
The significant drop in advertisers willing to spend their money on CNN also comes after the network’s profit dropped below $1 billion for the first time since 2016. The dip in profits last year also included $200 million in losses from the shuttering of CNN+, the channel’s much-hyped digital streaming service. Licht’s first official move as CEO was informing network staff that the doomed streamer was no more.