Discovery executives, wary of antitrust rules, have been restricted from advising their CNN peers until the merger takes place. CNN+ lost its champion when Zucker left in February due to an undisclosed romance with a colleague. But WarnerMedia CEO Jason Keeler went ahead anyway, launching the streaming platform on March 29 to thwart Discovery’s leadership.
Understand the turmoil on CNN
It soon became clear that Mr. Zaslav had a very different view of digital strategy.
On the morning of April 11, Discovery’s first business day — and 90 minutes before WBD shares go public on the Nasdaq — JB Perrett, Discovery’s global head of live broadcasting, held a meeting with CNN executives.
Perrett had a message: CNN+’s marketing was to be suspended, pending an official review of the business, three people familiar with the conversation said.
Warner Bros. executives wanted. Discovery combines other subscription platforms – Discovery+ and HBO Max – into one giant streaming service. They were not convinced that a niche product like CNN+ could be viable on its own.
And there was an order of religion. The Discovery merger left the conglomerate owed about $55 billion, which its executives are now under pressure to repay. Two people familiar with the matter said that CNN was planning to spend more than $1 billion on CNN+ over four years, even renting an additional floor of its expensive Manhattan skyscraper.
Andrew Morse, CNN’s chief digital officer and one of the principal architects of CNN+ who has become the service’s biggest internal champion, argued that subscription-based online news could be successful, citing The New York Times as an example. CNN+ executives said they had 150,000 paid subscribers and were on track to meet subscription goals in their first year.
Discovery executives weren’t impressed: At any one time, fewer than 10,000 people were watching the service, two people familiar with the numbers said, and they weren’t allowed to speak publicly. (On Thursday, Mr. Morse said he would be leaving the network entirely.)
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