By BRIAN STELTER and BILL CARTER New York Times blogging at MediaDecoder.com July 26 2012
Jim Walton, at CNN’s headquarters in Atlanta in 2008.
Time Warner said on Friday that Jim Walton, the embattled president of CNN Worldwide, would hand the news giant over to a new chief at the end of the year.
The announcement came in the middle of a year of widespread scrutiny, both of CNN’s performance and, by extension, that of Mr. Walton. CNN, while highly profitable, has been plagued by an identity crisis, particularly at its flagship cable news channel CNN/U.S., where ratings have sagged.
“CNN needs new thinking,” Mr. Walton said in an internal memorandum. “That starts with a new leader who brings a different perspective, different experiences and a new plan, one who will build on our great foundation and will commit to seeing it through. And I’m ready for a change. I have interests to explore and I want to give myself time to do it.”
Mr. Walton’s boss, Phil Kent, the president of Turner Broadcasting, had made his dissatisfaction with CNN/U.S. known in recent months, as has his boss, Jeffrey Bewkes, the chief executive of Time Warner. In a statement, Mr. Bewkes said that he respected Mr. Walton and supported “the decision that he and Phil Kent have reached.”
Mr. Bewkes said that the CNN that was inherited by Mr. Walton in 2003 “was underperforming,” with its earnings “in serious decline.” Mr. Walton, he said, turned the business into a “financial powerhouse” with annual growth of 15 percent.
This year, in fact, the company is set to make nearly $600 million in operating profit, a record high. But there is a gap between those profits and perceptions of the company’s success, even by some of its own employees, who complain that the cherished CNN brand is being tainted by mistakes. These errors include the misreporting last month of the Supreme Court ruling on President Obama’s health care overhaul, and formulaic programming moves. There are concerns that CNN’s profits could be jeopardized if its brand continues to suffer, according to people inside the company who declined to be identified discussing internal matters.
What CNN values most are steady-rising affiliate fees from cable and satellite providers, and low ratings make it hard to justify that steady rise. In May, CNN hit a 20-year prime-time ratings low, partly because of a lack of major breaking news stories. But some people at the company have also partly laid the blame for the low ratings on a leadership vacuum.
Given the widespread talk this year about whether Mr. Walton would soon leave CNN, employees did not feign surprise on Friday when his resignation was announced. Mr. Walton said in his memo that he had been talking to Mr. Kent about a change “for some time,” without specifying how long. Mr. Kent requested that Mr. Walton work until the end of the year. A spokeswoman for CNN said that Mr. Kent would lead the search for Mr. Walton’s successor.
There is no leading candidate to succeed Mr. Walton yet, nor is there a timetable for completing the search, according to people within the company. But one name that has already emerged is Jeff Zucker, the former chief executive of NBC Universal. The decision to set the end of the year as the departure date for Mr. Walton creates a more feasible situation for Mr. Zucker to step into the role.
Mr. Zucker has spent the last year preparing a new syndicated talk show for Katie Couric, with whom he is personally close. He is known to have made a commitment to her to serve as the executive producer for the show as it gets onto television. Her start date is Sept. 10, which would give Mr. Zucker several months to get the show going before potentially moving to CNN.
But Mr. Zucker has not had any direct talks about taking a role at CNN, according to people connected to his show with Ms. Couric. And his commitment to Ms. Couric’s show, which he co-owns, will take precedence over any other moves he might make, these people said.