The abrupt end of CNN+
Yesterday, Warner Bros. Discovery announced it was shutting down CNN+, the extensively hyped but extremely short-lived streaming service. It will close on April 30, for a total run of less than five weeks. “Well, that was fast,” said Scott Galloway, a professor who was planning to host a CNN+ show on business. Quibi, the ill-fated video platform that was streaming’s previous cautionary tale, lasted seven months.
More than 300 employees work at CNN+, and the network said it would try to transfer them to open positions in the company. Layoffs are likely for the rest. The news came days after Netflix said it expected to lose two million quarter, raising doubts about the crowded field of streaming services, The Times’s Michael Grynbaum, John Koblin and Benjamin Mullin write.
Where did it all go wrong? CNN sunk $300 million into the streaming service, according to The Wall Street Journal, hiring big-name anchors, including the former “Fox News Sunday” host Chris Wallace and the former NPR host Audie Cornish. CNN+ carried only unique programming to avoid running afoul of CNN’s agreements with cable carriers. In the end, it drew far fewer viewers than expected. It also had a powerful skeptic: Discovery CEO David Zaslav, who earlier this month became the head of the newly formed Warner Bros. Discovery, becoming the new owner of CNN after its parent, WarnerMedia, was sold by AT&T.
Some of the reasons for a shutdown have to do with the reality of mergers. The fact that CNN’s management pushed forward with the launch of CNN+ instead of waiting for the OK from its new corporate leaders appears to have ruffled feathers. Last week, on the first business day of Discovery’s ownership of WarnerMedia, marketing of CNN+ was suspended. (Zaslav has promised $3 billion in cost savings from the merger.) In a meeting with CNN+ staff yesterday, Chris Licht, CNN’s incoming president, compared to the service to a residential property that had been constructed without the input of its intended owner. “Then the new owner came in and said: ‘What a beautiful house! But I need an apartment,” he said, according to a recording reviewed by The New York Times.
What comes next? The shutdown raises questions for other media companies looking to start streaming services. The Warner Bros. Discovery chiefs appear to believe the future of streaming is in all-in services. The company seems likely to merge a CNN offering with its other subscription platforms — Discovery+ and HBO Max — creating one giant streaming service. “This back and forth is the talk of the media biz right now,” wrote Brian Stelter, CNN’s own media critic, in his newsletter yesterday. “It’s likely going to become a business school case study.”
HERE’S WHAT’S HAPPENING
Jay Powell signals that the Fed could raise rates rapidly starting next month. A half-point increase “will be on the table for the May meeting,” the Fed chair said yesterday, as the central bank tries to reduce inflation by “moving a little more quickly.” Stocks dropped on his comments.
French prosecutors issue an international arrest warrant for Carlos Ghosn. The former head of Nissan Renault, who has been living as a fugitive in Lebanon since his high-profile escape from Japanese authorities in 2019, is suspected of channeling millions of euros in Renault funds for his personal use, including the purchase of a 120 -foot yacht.
Philadelphia ends its indoor mask mandate after four days. It had become the first major American city to reinstate an indoor mask mandate in response to rising cases, but said yesterday that the mandate would be lifted because the numbers seemed to be plateauing. The rapid U-turn comes amid legal wrangling at the federal level over mask mandates and debate about the effectiveness of masking rules in general.
Janet Yellen calls for a reshaping of global supply chains that are “not secure.” The Treasury secretary said that trade relationships should be oriented around “trusted partners,” even if it meant higher costs for businesses and consumers.
Facebook is reportedly reviewing whether Sheryl Sandberg violated company policy. According to The Wall Street Journal, she contacted the digital edition of The Daily Mail in 2016 and in 2019 to head off the publication of an article about her boyfriend at the time, the Activision Blizzard CEO Bobby Kotick.
Elon Musk secures funding
Elon Musk said yesterday that he had commitments worth $46.5 billion to finance his proposed bid for Twitter. In a filing that detailed the funding, he also said that he was exploring whether to launch a hostile takeover for the social media company. The details put more pressure on Twitter’s board to take his offer seriously, after his initial bare-bones bid was received skeptically by Wall Street.
“It’s serious,” said Steven Davidoff Solomon of the UC Berkeley School of Law. “He’s getting more professional and this is starting to look more like a normal hostile bid.”
What we know: Morgan Stanley and a group of other lenders are offering $13 billion in debt financing and another $12.5 billion in loans against Mr. Musk’s stock in Tesla. A dozen banks are offering those loans at a 20 percent loan-to-value ratio, which implies that Musk is pledging more than $60 billion in Tesla stock as collateral, a significant chunk of his holding in the electric car company.
What we don’t know: Musk’s funding plan also includes $21 billion in equity financing, and analysts question whether he is willing to put up this cash on his own. Private equity firms are wary of getting involved in a bitter takeover battle, The Times previously reported, potentially ruling out a number of partners. “Who will be willing to cut 10- and 11-figure checks to participate in Elon’s Big Adventure if that adventure is going to be a bare-knuckles brawl?” wrote Don Bilson, an analyst at the research firm Gordon Haskett. Twitter’s shares remain well below Musk’s offer price, suggesting that markets remain unconvinced of the takeover’s prospects.
Musk is really into the letter “X.” The shell companies created as part of his proposed takeover of Twitter are called X Holdings I, X Holdings II and X Holdings III. Then there’s X.com, an online banking start-up that Musk founded in 1999 and that later became part of PayPal; Tesla’s Model X SUV; and X, the nickname of one of his children. Musk responded to an emailed request from The Times for comment on his funding plans and naming conventions by writing, simply, “X.”
The Russia-Ukraine War and the Global Economy
A new hybrid work challenge: taking attendance
Companies have a history of monitoring employees’ time spent at work by default (key-card swipes) or with intent (keyboard-monitoring software). This knowledge has new power as many workers are being asked to return to the office for at least a few days a week after a long period working remotely.
Bosses are grappling with whether to track attendance to ensure that workers are coming to the office when directed, or to keep trusting that they will do their work, wherever they are, The Times’s Emma Goldberg and DealBook’s Lauren Hirsch report.
“We’d like to be monitored if people are showing up to work,” said Jenae Kaska, the head of employee experience at SmartRecruiters, whose London employees are expected to come into the office on Thursdays. Managers at the software company can use data from their desk reservation system to follow up with employees who don’t show up.
At Goldman Sachs, data on workers’ badge swipes has been discussed during the company’s weekly meeting of investment bank managers, people familiar with the situation told DealBook. In one of the meetings, managers discussed how to compel bankers to come into the office, such as by scheduling in-office appointments with colleagues on days those people are known to be working remotely.
Some managers are wary of having to take attendance. “I’m a busy person, too, and the thought of being a monitor like we’re in junior high again is horrible,” said Sara Baer-Sinnott, the president of Oldways, a nutrition organization in Boston with a staff of 10 .
Many workers are resisting the tracking of their whereabouts now that they are used to the freedom of deciding when and where they do their best work. “I don’t have anyone checking up on me, and if I did, that would cause a lot of stress,” said Rose Worden, who works at a nonprofit in Washington that expects her to be in the office two days per week.
THE SPEED READ
The IPO of ARM, the SoftBank-owned chip maker that scrapped a deal to merge with Nvidia earlier this year, will be smaller than expected. (Bloomberg)
Buyout firm Clayton Dubilier & Rice is buying a hospice unit from health insurer Humana for $2.8 billion. (Bloomberg)
Hitachi is in talks to sell most of its stake in Hitachi Transport to private equity firm KKR for $1.6 billion. (Nikkei)
Ukraine needs up to $7 billion per month in support, President Volodymyr Zelensky told the World Bank. (NYT)
Beer companies Carlsberg and AB InBev are taking hits of more than $1 billion each from selling off their Russian businesses. (FT, Bloomberg)
The EU is asking citizens to work from home and use public transport to reduce Europe’s reliance on Russian energy. (BBC)
Germany’s central bank said that an immediate ban on Russian gas imports would dent the EU’s economic growth by 5 percent this year. (FT)
Some US oil firms are reportedly lobbying Washington to restart their drilling operations in Venezuela, which are barred by sanctions. (Reuters)
Charles Evans, the longest-tenured regional Fed bank president, is retiring, setting off a search for a new leader in Chicago. (WSJ)
Apple stepped up its lobbying in the first quarter of the year, spending $2.5 million, a company record. (CNBC)
The international transfer service MoneyGram is being sued by the CFPB for allegedly delaying transfers and withholding refunds. (NYT)
Best of the rest
Goldman Sachs is testing its checking account with US staff before rolling it out to the public later this year. (CNBC)
“What You Don’t Know About Amazon” (Times Opinion)
What happened on the first day of legal marijuana sales in New Jersey. (NYT)
On Earth Day, reporters from The Times’s climate desk answer some of your most burning questions. (NYT)
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