April 8, 2008
CBS Said to Consider Use of CNN in Reporting
CBS, the home of the most celebrated news division in broadcasting, has been in discussions with Time Warner about a deal to outsource some of its news-gathering operations to CNN, two executives briefed on the matter said Monday.
Over the last decade, CNN has held intermittent talks with both ABC News and CBS News about various joint ventures. But during the last several months, talks with CBS have been revived and lately intensified, according to the executives who asked for anonymity because of the confidential nature of the negotiations.
Broadly speaking, the executives described conversations about reducing CBS’s news-gathering capacity while keeping its frontline personalities, like Katie Couric, the CBS Evening News anchor, and paying a fee to CNN to buy the cable network’s news feeds.
Another possibility, these people said, would be for CBS to keep its correspondents in certain regions but pair them with CNN crews.
But, these people cautioned, no deal was imminent. Sandy Genelius, a spokeswoman for CBS News, said, “We are extremely pleased with and proud of our news-gathering operation. No outside arrangements are being negotiated.” A CNN spokeswoman said, “we don’t comment on speculative business matters.”
For CNN, a deal with a broadcast network would mean a new revenue stream without having to add much in costs. For CBS, an arrangement with a cable channel would allow it to cut costs while maintaining the CBS News brand, although in a much trimmed-down fashion. CBS is mired in last place amid the continuing struggles of Ms. Couric, who was given a $15 million a year contract, to attract new viewers.
The discussions are being led by Sean McManus, the president of CBS News, and Jim Walton, president of the CNN news group. Many questions remain regarding unions, rights issues and the level of involvement of other CBS News products like “60 Minutes” and “The Early Show.”
If a significant deal is reached between CNN and CBS, it would mark a watershed in broadcast history, a strategic shift in the face of changing market forces by the network that is widely credited as having invented television news, establishing a powerful tradition with journalists like Edward R. Murrow and Walter Cronkite.
In 2007, however, “CBS Evening News With Katie Couric” was in third place, averaging 6.43 million viewers a night, down 13.4 percent from 2006, according to Nielsen Media Research. ABC averaged 8.38 million viewers for its nightly newscast, and NBC averaged 8.29 million. (Fox, the fourth major broadcast network, does not have a national newscast; Fox News Channel is a cable network like CNN.)
In the morning, CBS News is also the perennial third-place finisher. In 2007 “The Early Show” on CBS averaged 2.5 million viewers, less than half that of NBC’s “Today,” which averaged 5.38 million. ABC’s “Good Morning America” averaged 4.77 million.
CNN and CBS have had a long flirtation, and there is no guarantee that this latest round of talks will be any more fruitful. In 1998, it emerged publicly that the two sides were talking about an extensive joint venture, and later, in 2002, CNN was close to reaching a deal with ABC News, but those talks eventually broke down over control issues.
More recently, CNN and CBS talked about sharing resources in Baghdad in order to save money but no deal was reached, according to two people with knowledge of the discussions.
None of the corporations that own the three broadcast networks break out financial figures for their news divisions, but advertising revenue tends to closely track ratings.
Combined, according to estimates from TNS Media Intelligence, the three evening newscasts brought in about $478 million in advertising revenue in 2006, the last full year in which figures are available. The morning shows generate much more in advertising revenue, a combined $1.4 billion in 2006.
Both of those figures were down slightly from the previous year, underscoring the fact that, at least for now, broadcast news is still a sizable, although declining, business.
While broadcast television as a medium is in decline because new platforms — the Internet, mobile devices — are fragmenting audiences, the problems at CBS News are more acute. While overall evening news viewership across the three networks declined 5 percent last year, CBS’s fell 13 percent.
In its recently released annual report titled “The State of the News Media,” the Project for Excellence in Journalism, which is led by Tom Rosenstiel, stated that broadcast news outlets needed to diversify more quickly across platforms if they were to survive.
“In the end,” according to the report, “if the problems of network news can be mostly attributed to the decline in the overall audience of broadcast network television generally rather than something having to do with the newscasts in particular, then the survival of the networks’ news divisions in some ways may well depend on their liberating themselves from the broadcast television platform on which they were founded — and even perhaps from the networks themselves.”
Bill Carter contributed reporting.