CNN Digital Is Facing A $20 Million Budget Shortfall
CNN is having a huge year on TV, but a budget shortfall at CNN Digital has restricted travel for digital employees and scaled back expenses.
CNN has been pouring money into its digital operation — making new hires and renewing its focus on web video and mobile devices.
Now, CNN Digital is facing a budget pinch, according to six people familiar with the matter. The shortfall, which according to three of the people amounts to about $20 million, has been enough to spark some end-of-the-year belt-tightening. Expenses in CNN Digital have been pared down and travel for digital employees has been limited.
In a statement, CNN touted record revenue and took aim at BuzzFeed.
"CNN Digital will bring in more than $370 million for 2017 — its highest revenue in history,” a CNN spokesperson said. “The company remains the #1 digital news source in the nation, handily beating all its competitors, including BuzzFeed, in users, video and even millennial reach. There are more than 660 people working for CNN Digital and there are no plans for freezes, cutbacks or layoffs of any kind. In fact, we are continuing to invest."
CNN is among many news outlets attempting to navigate an increasingly difficult and competitive digital media environment. Publishers, including BuzzFeed, are exploring new ways to diversify their revenue streams and keep up as Facebook and Google continue to gobble up more and more ad dollars. Ad firms and media outlets also have to deal with large consumer-goods companies cutting back on advertising spending recently.
Part of the difficulty for CNN Digital has been the tough market for digital ads coupled with the hyper-charged political environment, which has pushed some brands to eschew news content. But CNN has also spent lots of money on digital investments, launching a new “MoneyStream” app, pumping resources into its video startup Great Big Story, and acquiring Beme, YouTube star Casey Neistat’s video-sharing startup.
The digital pinch contrasts with CNN’s TV business, which has been on a ratings tear thanks to the wild opening months of the Trump administration and recent storm coverage. CNN’s TV business makes up for stresses in digital.
The network has landed multiple notable scoops on the Trump-Russia investigation recently, but the past year has not been error-free for CNN, which has been the most visible opponent in President Trump’s war with a press he has demonized as “fake news.”
CNN Digital’s situation comes as AT&T prepares to finalize its acquisition of CNN parent Time Warner, which insiders believe could close soon. The potential arrival of new owners has added to a sense of unease within the rank and file of CNN’s digital operation, sources said.