CNN’s Problems Are Bigger Than Jeff Zucker

In 1973, Tele-Communications Inc., a cable company headed by a thirty-two-year-old named John Malone, was having trouble getting the city of Vail, Colorado, to accept its rates. An engineer by training, Malone is possessed of what the media mogul Barry Diller once called “a frictionless mind.” He has been nicknamed the Cable Cowboy, Darth Vader, and Rupert Murdoch’s “frenemy.” Back then, he was just beginning to build what would become a sizable portion of the modern cable landscape. In Vail, his company took its programming off the air for a weekend, and instead broadcast the names and phone numbers of local officials who were standing in the way of a deal. In the end, Malone got what he wanted. As he later told Fortune, “We refuse to get raped by the programmers.”

Today, Malone (no relation to the author) is one of the largest private landowners in the U.S., a libertarian who has profited immensely from the consolidation of the media market. He spent the eighties and nineties acquiring various financial stakes in cable providers; when The New Yorker profiled him in 1994, Malone controlled one out of every four cable boxes in the country. At one point, his stake in NewsCorp threatened the Murdoch family’s control. Malone is also one of the largest shareholders in Discovery, known for reality-show offerings such as “90 Day Fiancé” and “Fixer Upper.” Malone calls this kind of television programming “comfort food.” “I grew up in front of a TV,” he told the Los Angeles Times, in 1993. “I get lonesome if it isn’t turned on.”

As consumers turn increasingly to streaming services, the cable landscape that Malone helped build is falling apart: for $13.99 a month, a Disney bundle can get you access to the Disney+ animated-film vault, the Kardashians’ forthcoming Hulu show, and ESPN’s myriad sports offerings. But Malone, at eighty years old—white-haired, with the wry, thin-lipped smile of a made-for-TV tycoon—is not finished yet. Soon, WarnerMedia, which is currently owned by A.T. & T., will merge with Discovery and make David Zaslav, Discovery’s current C.E.O., the head of a new company, with properties that include Warner Bros., HBO, and CNN. “John Malone is David Zaslav’s mastermind,” one TV-industry insider told me. “John Malone is the brains of the operation.”

The merger is an entrée into the streaming war dominated by the likes of Netflix, Amazon, and Disney+, and perhaps a continuation of a theme of Malone’s long career: a play for control in an ever-changing television landscape. Malone gave up supervoting shares in Discovery to form the new company. The largest shareholder in Warner Bros. Discovery will be Advance Publications, the parent company of Condé Nast and The New Yorker. Some argue that this means Malone’s role could be diluted, too. But people I talked to said that Malone’s close relationship with Zaslav and his acumen in the television business mean he will have an influence on the future of the new company that exceeds his ownership stake (which will be less than one per cent) and his single seat on the board of directors. “He’s incredibly vital to this deal and incredibly invested in this deal,” James Andrew Miller—the author of “Tinderbox,” an oral history of HBO, and one of the few journalists to interview the media-reticent Malone—said. “I’m so tired of people saying, ‘Well, you know, he’s eighty, he’s kind of out of it, or whatever’—but they don’t understand the nature of this guy.”

Recently, WarnerMedia has received some miserable press. CNN’s president, Jeff Zucker, was forced to resign––ostensibly for failing to disclose an intimate relationship with Allison Gollust, his closest colleague and the network’s chief marketing officer. That relationship, however, seems to be only one factor. Zucker’s departure came on the heels of the former anchor Chris Cuomo’s firing, amid speculations about his battle for severance from CNN. Cuomo was first suspended for offering inappropriate counsel to his brother, Andrew Cuomo, the former governor of New York, who resigned after multiple women accused him of sexual harassment. According to the New York Times, Zucker ultimately fired Chris after a woman’s allegations of sexual assault surfaced. (A spokesperson for WarnerMedia said that the company had already decided to terminate Chris because of his involvement with his brother’s defense, and the sexual-assault allegations only precipitated the announcement.) Chris Cuomo’s spokesperson told journalists that the allegations “are false” and that he “was never asked about the allegations prior to being terminated.”

Earlier in the pandemic, Zucker had pushed the Cuomo-brothers story line—Andrew would come on Chris’s show and they would discuss COVID safety while ribbing each other in an oddly puerile way for a news program. The shtick seemed to help ratings. A CNN journalist told me that Zucker was deeply involved in the details of those segments with the Cuomos and in coverage of the former governor, in general. Gollust, who formerly served as Andrew’s communications director, “was also involved in that, and people who are real journalists at the company found that very distasteful, given her prior employment.” The Times reported that an attorney for Chris “sent a letter to CNN demanding that the network preserve all documents related to any dealings between any CNN employee and anyone in the governor’s office,” a move that the Times noted might suggest that Zucker and others at CNN were also in touch with Andrew. In a memo issued Tuesday, the WarnerMedia C.E.O., Jason Kilar, said an investigation had found that Zucker, Gollust, and Cuomo had all violated company policies “including CNN’s News Standards and Practices.” That same day, Gollust resigned.

Risa Heller, a spokeswoman for both Zucker and Gollust, said it was “practically impossible for Jeff to be intimately involved in every editorial decision involving Governor Cuomo,” and that he “never gave Andrew Cuomo advice.” Heller added that Gollust “had no involvement in editorial decisions beyond booking.” On Friday, the Times reported that Andrew Cuomo sent Gollust messages about subjects he wished to be asked about on-air, which Gollust then sent to CNN staff, requesting they include them in their questions for the governor. (Heller told the Times that Gollust “in no way suggested that inclusion of these topics was a condition of the interview, nor did she suggest the interview should be limited to these subjects.”)

Zucker, who is an old friend of Zaslav’s, had been seen as a person who could protect CNN, its content, and its budgets, after the merger. That might have been magical thinking. Warner Bros. Discovery will have more than fifty billion dollars in debt. A person with close industry ties said that Zaslav will probably have to make three to four billion dollars in cuts once he takes over the new company. “That’s just to survive—forget about whether you’re going to be winning these [streaming] wars,” the source said. “There’s going to be an enormous amount of pain in terms of firing people.” These cost savings might prove especially painful for CNN, a relatively small asset. The network brought in $1.7 billion in revenue in 2020, according to estimates; that same year, HBO earned $6.8 billion. As the industry insider told me, “When people like [Zaslav]”—that is, someone used to the low-cost production of “Shark Week”—“run into what news organizations cost, what talent costs, what it costs to cover stories, they are actually flabbergasted.” That said, last week, after the Justice Department did not object to the merger, Zaslav called some of the anchors to say that he was excited and a fan of CNN.

Zaslav appears to be leaning into the Hollywood side of the operation. He recently posed for a Variety profile by a pool at the Beverly Hills Hotel, and has purchased a house owned by the late producer Robert Evans. His new world is glamorous, but the business challenges are steep. “Our job is to grow the right side of the company—the streaming business, the motion picture business and the TV production business—faster than the traditional business declines,” he told Variety, adding that movies were “​the top of the funnel” for driving new subscribers to its platforms, which the company hopes will reach two hundred million subscribers. In a 2019 interview with CNBC, Malone described the elements that would eventually lead to a winning streaming bundle. “As those new packages are created, the guys who have uniqueness will start extracting more and more share, the prices will go up, and we will see this play again,” he said. That “uniqueness” is likely not going to come from the news.