Earlier this year, Turner Broadcasting CEO John Martin announced Turner 2020 which aims to streamline and “futureproof” the company by its fiftieth anniversary in 2020. Then this week, it was revealed that CNN Worldwide President Jeff Zucker had spoke about the forthcoming cuts and said that CNN is “going to do less and have to do it with less.” This statement attracted a great deal of attention from media reporters as CNN under Zucker’s leadership has increasingly relied on original taped programming rather than live news. Also, Turner began a buy-out program this week and CNN’s Brian Stelter, Turner owns CNN, reported that roughly 6% of the employees in the United States are eligible for the package. After the buy-out program, layoffs are expected to begin.
When looking at Turner’s financial reports (which are available at Time Warner’s investor relations site), Turner had $2.75 billion in revenue for the second quarter, which made up more than one-third of Time Warner’s total revenue. In addition, Turner’s operating income, or earnings before interest and taxes are taken out, was over $900 million. By looking at the adjusting operating income, one can figure out that Turner had expenses of roughly 1.8 billion dollars. Turner’s operating income for the second quarter was the highest out of the three Time Warner divisions, Warner Bros., Turner Broadcasting, and HBO. In addition, Turner’s operating income and revenue was up compared to last year’s second quarter.
By looking at these numbers, Turner appears to be financially healthy, so one might wonder why all the cuts?
In an email conversation with a Turner spokesman, he said the cuts and the Turner 2020 program is not in response to the past financial situation, but rather to ensure a healthy financial environment for the future. The cuts will allow Turner to reallocate funds to top growth areas, such as content, monetization, and development. The re-allocation will allow for a greater return on investment and ensure, according to the spokesman, that Turner will continue to lead in a changing media world. In addition, the Turner 2020 program has the backing of Time Warner, since, as both he and TKNN pointed out, Turner is the main source of Time Warner’s revenue.
When asked what the new priorities will mean for Turner’s news programming such as CNN and HLN, he said that they will keep their top precedence. However, he did not have details on how resources will be allocated.
CNN has been laying off people for the past few years due to the network’s shift to digital, which has caused less employees to be needed. However, laid off employees are able to apply for new jobs in most cases and there has been hiring due to various new projects at CNN.