Wednesday, October 26, 2022

You've passed the 50-yard line on the week. Meta's stock is melting down, Chapek is talking about the future of Disney, Elon arrives at Twitter HQ, TMZ scares readers with a false report on Jerry Lee Lewis, and more. But first, the A1.

THE A1

CNN Braces For Cuts

CNN Photo Illustration/Anna Moneymaker/Getty Images

"Unsettling."

That's the sort of news CNN staffers had delivered to their inboxes at 1pm ET on Wednesday when network boss Chris Licht candidly informed them that sweeping changes are imminent. In other words, brace for layoffs by the end of the year.

Licht, who has been conducting a business review of CNN for six months, said in a memo that he had identified areas where changes will be made. In addition, he noted that there is "widespread concern over the global economic outlook" and said that "we must factor that risk into our long-term planning."

"All this together will mean noticeable change to this organization," Licht said in a memo. "That, by definition, is unsettling. These changes will not be easy because they will affect people, budgets, and projects."

Licht's memo came hours after CNBC's Alex Sherman published a deep-dive examining the future of CNN. Sherman's story, which Licht went on the record for, stated that job cuts will hit the news organization.

"Licht's review is part of a larger effort spearheaded by [Warner Bros. Discovery chief executive David Zaslav], who has told division heads throughout the company to rethink their units and find ways to cut costs," Sherman reported, adding that "more than 1,000 people will be laid off" this year by WBD, CNN's parent company. In addition to the economic headwinds every company is facing, Zaslav has promised Wall Street he will find $3 billion in savings in the combined organization.

CNN is, of course, not the only media company aiming to tighten the belt and lean itself out amid the uncertainty and a downturn in the advertising market. As one former television executive told me, "The ad market will plummet in a recession" and "ratings declines aren't helping."

For now, staffers will have to wait a little while longer to learn who will be leaving the network. Licht said in his memo that he aims to have the changes implemented by end of year so that 2023 can start on a strong foot. He stressed that when CNN exits the process it will "still be the largest, most-respected newsgathering organization in the world."

"When we emerge on the other side, CNN will be a stronger, more nimble organization," Licht said, "ready to weather whatever the global economy throws at us and to grow into the future."

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CNN Photo Illustration/David Paul Morris/Bloomberg/Getty Images

Zuck Gets Zinged: Shares of Meta are at their lowest point since 2016, plummeting nearly 20% in after-hours trading Wednesday. The staggering fall comes after the company formerly known as Facebook posted its second quarterly revenue decline in its history, poisoned by a bitter cocktail of factors, including the deteriorating digital advertising market, Apple's privacy changes, and increased competition from TikTok.

Compounding the issue is that the company, which lost $9 billion this year on Reality Labs, the arm of Meta building its Metaverse, forecasted losing even more money in 2023. The top headline on Business Insider framed that piece of news like this: "Facebook and Mark Zuckerberg just raised a giant middle finger to Wall Street." CNN's Clare Duffy has more here.

THE BUSINESS

CNN Photo Illustration/Mario Anzuoni/Reuters

Disney's Dream: Disney CEO Bob Chapek was interviewed Wednesday at The Wall Street Journal's Tech Live conference, speaking about how he wants to bring the "physical and the digital aspects" of Disney together for audiences. "If you're on Disney+, we should be aware, assuming you give us the permission to have that awareness, of what happened, what you experienced, what you liked the last time you visited a park," he said. "And, vice versa, when you're in a park, we should know what your viewing habits are on Disney+." Deadline's Dade Hayes has more here.

► Chapek also responded to criticism from right-wing media figures that Disney is "too woke." He said, "The world is a rich, diverse place, and we want our content to reflect that."

Sciutto's Status: Jim Sciutto is set to return to CNN's air next week after serving out a 30-day suspension, people familiar with the matter told me Wednesday. Sciutto has not been on air since early October. His absence followed news reports he was the subject of an internal probe over an incident that occurred overseas earlier this year. A CNN spokesperson confirmed Sciutto is expected to be back on air next week. Sciutto declined to comment.

First in Reliable | Changes at the Beast: A couple staffers are exiting and a couple others are joining the Daily Beast, Editor-In-Chief Tracy Connor announced to staffers Wednesday, according to messages I obtained. Marlow Stern and Scott Bixby will depart the publication, Connor said. Meanwhile, Krystie Lee Yandoli will join as an entertainment investigations reporter and Brett Bachman is joining as a night news editor.

IN THE INDUSTRY

Jimmy Finkelstein has raised $40 million to launch a new digital news outlet called The New Statement, Max Tani reports. (Semafor)
Three years after launching, Murdoch's The US Sun now has almost 100 journalists and "incredibly ambitious aspirations."(Press Gazette)
Bloomberg Media is dropping programmatic advertising at the end of the year to "allow for easier consumption of content, and speed up our platforms," CEO Scott Havens writes. (Talking Biz News)
Paul Farhi writes about "the media and the Halloween 'rainbow fentanyl' scare." (WaPo)
Emily Atkin zings Semafor for allowing Chevron to sponsor its climate newsletter. (HEATED)
NewsNation recently fired correspondent Paul Gerke who complained about the broadcast of a Trump rally. (NY Post)
Dean Baquet tweeted for the first time in 8 years to announce a new local investigative reporting fellowship. (NYT)

MEDIA MOVES

The Texas Tribune has named Sonal Shah as its next CEO, taking over from Evan Smith. (NYT)
CJR's Jon Allsop announced that his newsletter, Media Today, will go on hiatus until January: "I have, frankly, run myself into the ground, so I'm taking a two-month sabbatical." (CJR)
Bret Baier has a new podcast, and he is looking for "Common Ground" in it, talking to leaders on all sides of the political aisle. (AdWeek)
WaPo has named Harry Stevens as its first climate & environment graphics columnist. (WaPo)
Andy Lewis has launched a free weekly edition of "The Optionist." (Optionist)

THE VALLEY

CNN Photo Illustration/Carina Johansen/NTB/AFP/Getty Images

'Chief Twit' Arrives: Musk changed his public profile descriptor to "Chief Twit" on Twitter ahead of a court-imposed deadline to buy the company by Friday. Later in the day, the Tesla-SpaceX billionaire walked into the company's headquarters, carrying a sink. "Entering Twitter HQ - let that sink in!" Musk tweeted, accompanied by a video of him. Meanwhile, The WSJ's Laura Cooper, Alexander Saeedy, and Cara Lombardo reported Wednesday evening that "banks have started to send $13 billion in cash" backing Musk's takeover. They noted it is "the last sign the $44 billion deal for the social-media company is on track to close by the end of the week after months of twists and turns."

TOO MANY TABS

The Wire has issued an apology to its readers after retracting its reporting on Meta, blaming in part "deception" by a staff member. (The Wire)
Alex Hern examines how TikTok's battle with YouTube has "started to take its toll" on the Google-owned company. (Guardian)
Sara Morrison writes about TikTok's algorithm: "My timeline has become an endless doomscroll." (Vox)
Apple pauses ads related to gambling and "a few other categories" on its App Store pages after complaints from developers. (MacRumors)

THE INFO WARS

IN THE BATTLEFIELD

Sen. Mike Lee declined an offer to debate Evan McMullin on Fox News, Bryan Schott reports. (Salt Lake Tribune)
"The right-wing misinformation effort goes local": Annie Gowen reports on talk radio station Cities 92.9. (WaPo)
Steve Bannon, appearing on Infowars, implored the conspiratorial outlet's audience to become poll workers. (MMFA)
Meanwhile, Sarah Rumpf's latest is headlined: "Fox News reports on threats against election workers, but is somehow unclear who is making those threats." (Mediaite)

CURTAIN CALL

Goodness, Gracious: TMZ stunned readers Wednesday, sending off push alerts reporting that the iconic rocker Jerry Lee Lewis had died. The only problem: Lewis is, in fact, alive. Moments after publishing the story, the outlet took down its story and replaced it with a new article reporting that Lewis was still among the living. "TMZ regrets the error," the unbylined story said. But not before a host of national and local outlets ran with the erroneous report, setting off a cascade of "BREAKING" stories that also had to be walked back. Reached for comment, a rep for Lewis confirmed to CNN, "He's alive. TMZ reported erroneously off of an anonymous tip."

OFF STAGE

Joe Coscarelli and Ben Sisario ask the big question: "Can Kanye West find refuge, or money, in music?" (NYT)
Rihanna returns: The singer dropped a tease for her first song since 2016. It's an original for "Black Panther: Wakanda Forever." (Variety)
Endeavor has sold the Miss Universe Organization to Thailand-based JKN Global Media Public Company Limited. (Variety)
HBO Max's "Green Lantern" has hit a snag. The series is being redeveloped after losing its writer, Lesley Goldberg reports. (THR)
Brian Steinberg, Brent Lang, and Cynthia Littleton ask: "How bad would a recession be for Hollywood?" (Variety)
Selena Gomez has canceled her "Tonight Show" appearance after her Covid diagnosis. (Deadline)
Mandy Patinkin will narrate a podcast about the history of Jews in Germany. (Deadline)

Thank you for reading! This newsletter was edited by Jon Passantino. Have feedback? Send Oliver an email here. We will be back in your inbox tomorrow.