Rumors abound, ratings low, but CNN still profitable

What’s going on at CNN?

The cable news channel is in an eternal-seeming ratings slump, and now, its internal negotiations with new talent are being leaked all over the place.

Those rumors revolve around the cabler’s search for a replacement for stalwart Larry King, whose show at 9 p.m. has seen its audience plunge in recent months. Candidates in the running reportedly include “Britain’s Got Talent” and “America’s Got Talent” judge Piers Morgan and former New York governor Eliot Spitzer.

Sources say the net may be nearing a deal for a “Crossfire”-type debate show at 8 p.m., and that King may be moved from his 9 p.m. slot but will not be phased out or dismissed — which would be in keeping with CNN’s carefully worded statement earlier this week that “rumors that we are close to signing a deal for a Larry King replacement are untrue.”

Industry insiders said Morgan may be having trouble extricating himself from his existing contractual obligations to “Got Talent” producer FremantleMedia and NBC, though that could not be confirmed.

CNN’s talent search has some urgency because the news cabler has lost some of its signature names in recent months.

Campbell Brown, who vacated that 8 p.m. slot in May, said at the time that she left the net because she felt her ratings were too low and she didn’t want to adopt a Nancy Grace/Bill O’Reilly-style personality-driven approach to boost them. Christiane Amanpour, one of CNN’s longest-serving and highest-profile anchors, left the newser in April.

CNN has, in recent months, fallen to No. 3 in primetime behind Fox News and MSNBC. Last week, Fox News drew nearly more than three times the aud of CNN in primetime (2.2 million viewers for Fox News vs. 636,000 for CNN).

But here’s why nobody at CNN is hitting the panic button — yet. Despite the gloomy headlines, CNN and its Headline News sibling remain very profitable, raking in $1.18 billion in revenue in 2009, according to SNL Kagan. Ad revenue was $513.4 million. According to info Time Warner distributed to Wall Street analysts last month, CNN last year generated a record $500 million in operating income.

CNN’s bulwark is its international business, both with channels and licensing of its news programming.

But the cabler has also made inroads with digital advertising and licensing. Its website consistently ranks high among the top news websites, which has allowed the cabler to generate strong revenue from bundling its TV and online advertising sales.

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