CNN Is Hiring Amid ‘Tough’ Ad Market, Competition

By Sarah Rabil

April 1 (Bloomberg) -- CNN, surpassed by MSNBC for the first time in U.S. weekday primetime ratings last month, plans to increase its workforce this year and invest in its Web site.
In a “tough” advertising market, the cable-television news network will scale back investment in technologies such as mobile phones rather than fire employees, said Jim Walton, president of CNN Worldwide. CNN is hiring about 30 workers for its newswire service this year and plans to recruit more for international news, he said.

“We’re operating in the same economies as everybody else,” Walton, 50, said in an interview last week. While CNN’s ad sales are “not as robust,” they aren’t “horrible.”

CNN, owned by Time Warner Inc., is confronting both the recession and stiffer competition from MSNBC, which in March overtook it for the No. 2 spot behind News Corp.’s Fox News in weekday primetime ratings. CNN, which accounted for an estimated 2.5 percent of its parent company’s 2008 revenue, is now a bigger slice of sales as Time Warner pares down its assets to focus on content businesses.

The CNN U.S. network and its sister channel HLN contributed about $1.19 billion in operating revenue of almost $47 billion in sales last year at Time Warner, according to estimates from research firm SNL Kagan. The Fox News channel garnered $1.06 billion in operating revenue. MSNBC, whose hosts in primetime include Rachel Maddow and Keith Olbermann, earned $366.6 million, according to SNL Kagan.

Profit Doubled

New York-based Time Warner doesn’t break out CNN’s financial performance. Time Warner Chief Executive Officer Jeffrey Bewkes said March 2 that CNN’s profit more than doubled in the past four years. Time Warner spun off cable-system assets this year and is weighing the fate of its AOL Internet unit.

CNN will open a TV production facility in Abu Dhabi in November, and its Web site, CNN.com, plans to introduce enhancements later this year, Walton said, declining to be specific.

The network recently started a wire service offering articles and videos to media outlets including newspapers and their sites. The service will help build CNN’s brand and isn’t expected to generate a lot of revenue, Walton said. CNN doesn’t plan to become a rival to the Associated Press or Thomson Reuters, he said.

CNN Wire Service

“Those are big established companies with tentacles all around the world,” Walton said. “We’re not going to build that. We have no intention.”

CNN ended both 2007 and 2008 with more employees than it started with each year and plans to do the same in 2009, Walton said. CNN has about 4,000 employees worldwide.

Fourth-quarter revenue at Time Warner’s cable networks, including CNN, TBS, TNT and HBO, rose 8.7 percent to $2.94 billion. Excluding Time Warner Cable Inc., the networks made up 37 percent of the company’s sales.

Time Warner gained $1.40, or 7.3 percent, to $20.70 at 4 p.m. in New York Stock Exchange composite trading. The shares has dropped 7.2 percent this year.

In March, MSNBC, owned of General Electric Co.’s NBC Universal, drew an average of 1.15 million weekday primetime viewers, and CNN trailed in third place with 1.12 million, according to Nielsen Media Research data provided by MSNBC. Fox News ranked No. 1. For primetime viewers Monday through Sunday, CNN said it remained No. 2.

Straight Forward News

“With the newspaper industry in decline and other cable networks taking a partisan approach, we are committed to providing straight forward news with a range of opinions now more than ever,” Walton said in response to whether CNN is altering its strategy given MSNBC’s ratings.
Walton, who joined the 24-hour news channel one year after it first aired in 1980, has overseen CNN, its site, and HLN since May 2003.

Fox News, created in 1996, overtook CNN in 2002 as the most-watched channel, luring viewers with a talk-show format.

CNN averaged 638,000 viewers a day in March, up 9 percent from a year ago, according to data from the network. Fox News drew the most viewers with 1.22 million and MSNBC was third with 446,000, according to CNN data. CNN said it was up 17 percent in total viewers for the first quarter, placing second behind Fox in total-day and primetime viewers.

Class A shares of News Corp., the New York-based media company run by Rupert Murdoch, gained 34 cents to $6.96 in Nasdaq Stock Market trading. GE rose 6 cents to $10.17.

To contact the reporter on this story: Sarah Rabil in New York at srabil@bloomberg.net