This is the top story from our daily newsletter published on November 5, 2020. To have this and more delivered directly to your inbox scroll down and enter your email or click here to sign up. Photo Credit, Fox: Rae Whitlock CC 2.0. Photo Credit, CNN: Ken Lund CC 2.0.
Just over a month ago, we published one of our most popular pieces titled, “Chaos Equals Cash” in which we described how major networks stand to make a killing this election season by stoking division, fear, and chaos. Thanks to quarterly earnings calls, we can pop the hood on some of these massive entertainment enterprises to see how this hypothesis is holding up. In a nutshell, so far, so good. Take Comcast for example, which reported its latest results last week. The company owns NBCUniversal, which owns NBCUniversal News Group, which owns NBC and MSNBC. Comcast’s Chief Financial Officer, Michael J. Cavanagh, said “advertising revenue increased 12% year-over-year, due to strong political advertising, which was up 70% over what we had generated in the last presidential election in 2016.” The same thing goes for the conservative folks across the street. The Wall Street Journal reported Tuesday that “Fox Corp boosted earnings and revenue on a strong performance from Fox News in its latest quarter, showing how crucial the cable news network is for the media company, as other areas of its business declined.” While a final election result has not been called, Joe Biden is currently an overwhelming favorite in the betting markets. Even if President Trump threads the needle, ultimately he only has one more term. Therefore, if the President is no longer in the picture, whether that’s in four days from now or four years from now, what does that mean for networks like MSNBC, CNN, and Fox News? Here are some initial thoughts:
What’s Next for the Left: Referring to Fox News, MSNBC and CNN, Jeremy Barr of the Washington Post says, “The Trump presidency has been an unmitigated success for the three major cable news networks, which have all experienced a huge uptick in audience ratings over the past 3½ years.” Barr asks: “So what happens at MSNBC and CNN if President Trump loses? It might seem to be the most fervent hope of some of their pundits. But would a President Joe Biden be good for business?” The answer is most likely, no. “I think they’re going to feel very lost because they are largely addicted to [Trump] at this point and that sense of chaos,” said Ariana Pekary, who left MSNBC in July after a nearly seven-year career that included serving as a producer for Lawrence O’Donnell’s evening show. Barr says, “a former CNN anchor argued that after years of the network challenging Trump, ‘a Biden win could have a devastating impact on their bottom line.” Andrew Tyndall, a television industry analyst, also sees a Trump loss as having serious programming consequences for CNN and MSNBC. “If Donald Trump is defeated, they’ve really got to rethink their formulas,” he said. “And I cannot see how they continue to have eye-catching TV in the same way….There’s a TV phenomenon. There’s a draw. They are both dependent on him.” George Washington University’s Frank Sesno, a former CNN bureau chief, agrees: “Biden is just a much more boring character than Donald Trump is. If the Trump show isn’t the Trump show anymore, and it’s the Biden show, where are the applause lines and laugh lines?”
What’s Next for the Right: During Fox Corp.’s quarterly earnings call, Lachlan Murdoch, CEO of Fox Corp., said Fox News was the top network in broadcast or cable in terms of total audience from Labor Day to Election Day. The leading network is, of course, directly challenging the networks above for viewership, but what about a new entrant into the market? That’s what Wall Street analyst, Michael Morris of Guggenheim, asked Murdoch. On the call, Morris said: President Trump “has in the past referenced perhaps starting a news network, how would you think about that competitively?” Murdoch said, “We love competition… We have always thrived with competition. … The only difference today versus some years ago is as our audience has grown and our reach has grown, we see our competition as no longer only cable news providers but also as the traditional broadcast networks.” Dade Hayes of Variety expands on this idea, saying Trump “has talked about his ambition to start an alternative to Fox News. While his rise to power can, of course, be traced to the influence of Murdoch’s father, Rupert, and Fox opinion hosts like Sean Hannity, Trump has also had his differences at times with the network.” Hayes points to a “lengthy appearance last month on Rush Limbaugh’s radio show, [when] Trump bashed Fox News, calling it ‘a much different thing than it was four years ago. Somebody said, ‘What is the biggest difference?’ I said the biggest difference is Fox.'” Hayes noted, “Few concrete details have emerged about a potential Trump news initiative, but it wouldn’t be a big leap to imagine him drawing on longstanding ties to the television business and as a public figure for decades… A Vanity Fair report in the spring said the Trump family had held discussions with OAN about taking a stake, though a spokesperson denied it.” In conclusion, Hayes says Trump “has floated the idea of launching a network in several public appearances, framing it as a response to CNN’s ‘fake news’ coverage.” What this means for the future Fox is hard to say.
Flag This: If our constitutional republic functions the way it is supposed to, one man—either Donald Trump or Joe Biden—will be forced to think about retirement. The same holds true for the media industry. Ben Smith, The New York Times’ media columnist says, “The executive editor of The Los Angeles Times, Norm Pearlstine, is looking to recruit a successor by the end of the year. Martin Baron, the executive editor of The Washington Post, just bought a house out of town and two Posties said they expected him to depart next year. And the executive editor of The New York Times, Dean Baquet, is on track to retire by the time he turns 66 in 2022.” One of the biggest names to watch, however, will be CNN President Jeff Zucker, who is “frustrated” according to the Wall Street Journal and has hinted that “his future at the cable news network in doubt.” The Trump years have been kind to Mr. Zucker’s bottom line. In 2018 the Information said, “The cable news network brought in on average 700,000 viewers a day, more than any other time in the past 25 years.” At that time, CNN [was] projected to generate $2.5 billion in total sales, making it the most successful year ever. So while we wait for the final vote count to be tallied, and both Fox News and CNN frame the holding pattern as a potential constitutional crisis, just remember that’s all part of the plan, because chaos equals cash.