Plenty of upsides for Disney, after some hard decisions
The hot topic of AOL Time Warner’s CNN merging with Disney’s ABC News seems to provoke a unanimous response among newsies: It could be a storybook marriage, if the two sides negotiate a good prenup.
Indeed, even before CNN relinquished its ratings crown to Fox News, the cabler’s beleaguered parent company has been looking for suitors.
There are plenty of upsides for Disney, which last spring showed its eagerness to unload newscasts by trying to lure David Letterman from CBS to replace Ted Koppel’s “Nightline.”
While the Mouse House concentrates on boosting the network’s struggling entertainment division and takes a minority role in the merged news orgs, ABC News could air some newscasts on CNN, share in the revenue stream of its second platform, and amortize its costs.
And if the two sides signed tomorrow, ABC News could start taking advantage of CNN’s Baghdad bureau, the only television network to have on in the Iraqi capital.
CNN could receive free promotion on a broadcast network, much in the way that NBC tupthumps cousin cabler MSNBC.
But before the merger happens, the two sides would have to make some Solomonic decisions: Which bureaus would be cut?, which high-priced talent would be jettisoned (likely at CNN)?, and who will take charge in the elections?
News execs also point out that with big cuts made to appease Wall Street, there’d be even more pressure on newsgathering.
Even upon signing, there would be problems, cultural and otherwise. Broadcasters feel superior to their cable news counterparts and ABC may feel as though they’re selling out. If press reports are accurate, CNN would be selling 1/4 to 1/3 of a business that clears $200 million to a company makes $10-15 million. CNN would account for 2/3 of the combined $1.6 billion revenue.