Despite Controversy and Trump Attacks, AT&T Can’t Just Hang Up on CNN

Donald TrumpCNN Republican Presidential Debate, Las Vegas, America - 15 Dec 2015

CNN producers just a few weeks ago would readily acknowledge the trouble they were having in getting Trump administration officials to speak about current events on the network. Now, they can’t get them to shut up.

Just last week, Trump adviser Stephen Miller took time out during a White House press briefing to berate Jim Acosta, the network’s senior White House correspondent. In a nearly half-hour interview broadcast July 27, then-White House communications director Anthony Scaramucci phoned in to “New Day” co-anchor Chris Cuomo to explain his concerns about leaks from the White House. When Scaramucci chastised CNN for its coverage of Russian interference with the election — and possible ties to Trump officials — Cuomo pushed back. “It’s not that we have some untoward fascination with an investigation. We do it because it threatens the foundation of the democracy,” he said. “You know that. You know it matters.”

Morgan Ramberg for Variety

The back and forth was the latest in a series of mammoth — by cable news standards —interviews between Trump officials and CNN staffers including Cuomo, Alisyn Camerota and Brian Stelter, most of them taking up to half an hour and running uninterrupted by ads. This isn’t the norm at CNN or any other TV news outlet.

At CNN these days, however, little is normal.

President Trump portrays many mainstream media outlets as adversarial, but none more so than the Time Warner-owned cable-news network. The White House opprobrium comes as CNN’s parent company and AT&T seek approval for an $85.4 billion merger, and there has been no small amount of speculation that the president might try to halt the combination due to his dislike of CNN. With that in the background, CNN in recent weeks cut ties with personalities who caused controversy by calling out the president online, as well as three staffers whose report on Scaramucci had to be retracted. Meanwhile, rival MSNBC has surged, garnering new attention for Rachel Maddow, Lawrence O’Donnell and others.

Inside CNN, staffers remain focused most on performance while muddling through the controversies, said a person familiar with the network: “You have a creative, aggressive news organization that suddenly is not as much in the center of the universe as it had been before the election.” Executives, this person added, want to capture some of MSNBC’s primetime momentum. Others feel called to serve in a national moment of chaos. “This is the story of our time,” said Don Lemon, the network’s late-prime anchor, of the current news cycle. “We are not here for the ratings. We are here to inform the viewers.”

Time Warner is standing by CNN Worldwide, as well as its president, Jeff Zucker. “Journalism has never been more important than it is right now. I am proud of the work Jeff and his entire team are doing and for their tireless efforts to remain independent, trusted and credible,” noted John Martin, chairman and CEO of Time Warner’s Turner cable-programming unit, in a statement to Variety. “In a world where distinguishing between what’s real and what is not has become increasingly difficult, nothing is more important than seeking the truth, and holding those in power accountable. It is why CNN — and a free press — continue to be a critical part of what makes our democracy work.”

The company has good reason to get behind CNN, which threw off $1 billion in profit in 2016, according to a source, and is expected to do the same in 2017. That’s a significant chunk for the parent company, which had 2016 net income of approximately $3.93 billion. AT&T’s Time Warner purchase price would be noticeably smaller without CNN. AT&T declined to comment.

Source: Kagan, part of S&P Global Market Intelligence

CNN’s on-air content may not please the White House, but it hasn’t scared off Madison Avenue. Turner said advance advertising commitments during the recent upfront sales market represented “CNN’s biggest year to date with ad revenue across both TV and digital,” something that’s usually hard to achieve in a year after an election. CNN is projected to snag $427.4 million in advertising in 2017, according to market research firm SNL Kagan, versus $912.6 million for Fox News and $267.8 million for MSNBC.

Marketers have not soured on cable news outlets trying to make sense of the controversies swirling around Washington. “I’ve seen things get pulled back because of certain behavior by certain people,” said Chris Geraci, president of national video investment at Omnicom Media Group. “But to not support news because of a story that’s being covered? I’ve not really ever seen that.”

The network may have reason to believe viewers are getting over the “fake news” trend. A survey commissioned by CNN in late July found the percentage of Americans who thought biased reporting from mainstream news organizations was at the root of the issue has declined to 69%, compared with 73% in January. Of respondents, 52% felt CNN was fair in its coverage of President Trump.

While MSNBC is getting a lot of attention, CNN’s viewership has increased over the long haul. In the second quarter, overall total day audience rose 25%, while viewers between 25 and 54 — the ones coveted most by advertisers — increased 39%. Total day audience in that demographic is up nearly 74% year to date through July 25, according to Nielsen, compared with the same period in 2013. CNN says primetime viewership through July 30 is at its second-highest level since 2008.

Meantime, CNN is trying to build out other businesses. In an earlier era, CNN might have taken its cues from The New York Times and The Washington Post, but as new technology erodes distinctions between print and video, it is competing more directly with them. News junkies can find CNN headlines on their smartphones, Apple TV and Twitter as quickly as via the set-top box. “There are days when there will be a story we’re quite proud of on digital and then we’ll reverse engineer it back onto TV, and there are days when we break news on TV because of something a guest said and we drive people back to digital,” said Andrew Morse, executive vice president of editorial of CNN U.S. and general manager of CNN Digital Worldwide. CNN is set to launch a show on Snapchat, he said, and is readying Beme News with YouTube personality Casey Neistat.

But whatever it reports — whether on old-school platforms or via new tech — is held to high editorial standards, Morse said. “We know that there are a lot of eyeballs on us,” he noted. And that, after all, is what interests both Trump officials and AT&T.