CNN Recorded Record Profit in 2010 (Exclusive)
As president of CNN Worldwide, Jim Walton oversees the news operation's television, online and mobile businesses around the world. A day after CNN's parent company Time Warner reported its latest earnings, Walton spoke to The Hollywood Reporter about the cable network's 2010 financials, the early performance of Piers Morgan Tonight, the importance of U.S. primetime shows and emerging digital businesses, as well as Rick Sanchez.
The Hollywood Reporter: CNN had a record operating profit in 2009, and I hear you brought in another record profit for 2010. Is that true, and how big was it?
Jim Walton: We had a really good year in 2010. We had a fantastic year, and yes, we grew up profits over 2009. It was another earnings record, so we are really pleased...I am speaking about the worldwide business of CNN.
THR: How big a profit?
Walton: As you know, Time Warner doesn't break out our earnings, so I am not allowed to either. I can't. [Turner Broadcasting System chairman and CEO Phil Kent last year mentioned at a Time Warner investor day that CNN's 2009 operating profit was around $500 million. A Time Warner spokesman declined comment, but sources familiar with the company's financials say that CNN grew that in the single-digit percentage range in 2010.]
THR: That is several record years in a row, isn't it?
Walton: That is seven years in a row of profit growth. That's pretty good. While the journalism industry is under siege, we continue to grow.
THR: What were the main drivers of your growth?
Walton: There are a lot of men and women here who work really hard. We have a pretty diverse business that is spread out around the world. And we got multiple revenue streams - television, the Web and mobile. It's not one television network. It's a big old honking news machine.
THR: The continued profit growth seems to be in some contrast with your continued U.S. primetime ratings challenges that are often in focus. Is that just not as important a factor?
Walton: I don't want to minimize it. The primetime programming on CNN U.S. is very, very important, and those ratings are important to us. But the ad revenue generated by our primetime programming on CNN U.S. is only about 10% of our total revenues. We have other parts of our business that are as big or bigger than that.
THR: What were some of the growth drivers for CNN last year?
Walton: Over the years, as various economies go up and down around the world, we are in so many different economies that we have a lot of touch points and are not weighed down by any one thing. We also have television, Web and mobile. Advertising is a huge component of our business [across platforms] domestically and internationally, but the distribution [fee] business is big for us. The Web business is big for us, mobile is growing, and we are in the syndication business as well.
THR: What do you predict for your business for this year?
Walton: I'm not allowed to give forward-leaning statements on financials. What I can tell you is that I am confident that we are going to have another great year. We have some new programs on CNN. We will be launching a new primetime program on HLN. We have some digital additions that we are going to make over the next four, five months. And the international business continues to evolve. So, I am very confident that we are going to have another strong year.
THR: You mentioned new programs. How do you feel about the performance of Piers Morgan so far?
Walton: It's spectacular. I'm really pleased. He is so clever, he is really smart, he is a big personality. And he works hard and does his homework. He's been stepping into the Egypt story now. We couldn't be happier.
THR: What about ratings? Have you noticed what kind of guests and topics do better for him or whether the show does better when he steps into breaking news versus has celebrity guests?
Walton: It's really too early to put a stamp on it. Piers and his producers and Ken Jautz who runs CNN U.S. will work together and look at what happens each day, review and always try to make it better each day. I can assure you that Piers will be every bit a part of the conversation, and the interview will be the basis of what that program is. But I think it is in its early days. He has tried all sorts of different types of shows in the two and a half weeks he has been on the air. Maybe that's what it will always be like.
THR: Parker Spitzer has been on the air longer, and you have tweaked that a bit. How happy are you with it now?
Walton: Much has been said and much has been written about the program. If you look at it just on its merits, it's one of the smartest programs on television - whether cable or broadcast. It fits very much within the brand of CNN and what it stands for. And if you look at the last 10 days or so, its performance has gotten a lot better and the past
couple of nights it has beaten MSNBC. It's got some momentum right now.
THR: How do you explain that?
Walton: We had a couple of folks who weren't television professionals, and now they have got some time under their belts. They are performing, and the show just gets better and better.
THR: Anything you can say about the chatter that it will be just Spitzer one day?
Walton: I have got a little saying here at CNN internally that you can't burp without somebody somewhere writing. CNN commands a lot of attention, which is great. What you can count on is that we have Dr. Drew coming on HLN in primetime soon. That's the talent focus for our company right now.
THR: You have added personalities to primetime since Time Warner CEO Jeff Bewkes joked last year that some time CNN may be a bit boring. Do you feel you have made real progress?
Walton: It's in the eye of the beholder. What is funny to somebody is not funny to somebody else. What is exciting to one person might be boring to somebody else. But everybody who performs at CNN in an anchor role needs to be very, very smart and be able to relate to and be relevant to their audiences. We are not trying to be funny necessarily.
THR: What has popped for CNN in the digital space?
Walton: We are growing and evolving in a very rapid way in the mobile area and tablets. We are doing really well with our apps for Android and iPad and so forth. And we have launched a number of verticals - eatocracy comes to mind, we got a belief blog, and we are doing more in the tech space. Collectively, that all adds up to some pretty good growth.
THR: Are you bringing Rick Sanchez back to CNN?
Walton: I talked to Rick the other day. I'm friendly with Rick, but we didn't talk about him coming back to CNN.