Greetings from Los Angeles, and welcome back to In the Room. Congrats to everyone on Wednesday’s historic stock surge, and especially David Zaslav, whose $WBD rose 20 percent from the prior day’s close (although it’s still down about 10 percent from last week). From Spotify to Netflix to Fox, most other media stocks finished the day up about 9 percent, generally tracking with the S&P. Disney and Comcast were both up by about 7 percent. In tonight’s issue, a closer look at CNBC, which is drawing relatively high ratings amid the latest market frenzy. Of course, the financial news network’s long-term success will require standing up a more formidable, nonlinear enterprise business that can better monetize the wealthier side of its highly engaged audience. So far, it has yet to realize its full potential. 🍸 On the latest edition of The Grill Room, Puck’s resident Wall Street whisperer, Bill Cohan, stopped by to diagnose the anxiety plaguing media executives as MAGA’s economic “detox” takes hold. We discuss the market whiplash, the global headwinds to corporate earnings, and whether consumers are due for another bout of inflation—a perfect storm that is activating the media industry’s 2008-era P.T.S.D. Follow The Grill Room on Apple, Spotify, or wherever you prefer to listen. Also mentioned in this issue: Mark Lazarus, Shari Redstone, Will Welch, Jim Cramer, Jeff Bezos, Andrew Ross Sorkin, Wendy McMahon, KC Sullivan, Norah O’Donnell, Deep Bagchee, and many, many more… Let’s get started…

Shari-kiri: President Trump and Paramount have selected a mediator to help them reach a settlement in the seemingly frivolous $20 billion lawsuit that the president brought against CBS News over Bill Whitaker’s 60 Minutes interview with Kamala Harris last October. Not that it’s at all surprising, but I am reliably told that Paramount owner Shari Redstone remains fully committed to a settlement if it will move the Skydance deal through. And since the deal is still awaiting F.C.C. approval, the deadline has been extended by 90 days to July 6, which just so happens to coincide with the start of the Allen & Co. conference in Sun Valley.

‘Evening News’ blues: Speaking of CBS News, Wendy McMahon and Bill Owens’ post-Norah O’Donnell Evening News experiment continues to be a ratings disaster. Last week, the show averaged less than 4 million total viewers and just 558,000 in the demo, a year-over-year decline of 18 percent and 27 percent, respectively. The broadcast, now co-hosted by John Dickerson and Maurice DuBois, has also drawn criticism from sources inside CBS News, who have been perplexed by both the format and the dual-host structure since the show’s inception.
Insanity Fair: Finally, in an absurd bit of hearsay, I was tipped off to a rumor that Jeff Bezos had quietly bought Vanity Fair from Condé Nast, ostensibly because Lauren Sánchez had big ambitions for the Oscar Party. I have been assured that there is zero truth to the rumor. (By the way, the company’s editorial brands are now so enmeshed on the backend that it’s frightfully difficult to sell any of them off.)Meanwhile, the search for Radhika Jones’s successor continues, though the title in the job listing is now for “global editorial director,” which emphasizes what Radhika herself never seemed to get: This job really isn’t about editing, it’s about running a business. And in case you missed it, my partner Lauren Sherman has all the updates on the search, including the latest Will Welch chatter…

Now, the main event…

CNBC’s Reign of Tariff

NBCU’s soon-to-be-spun-off business news channel loves a financial crisis, and this week its ratings rose as markets tanked. But that doesn’t lessen the challenges it faces as it gets spun off from its parentco.

Dylan Byers

On Monday, while the financial markets were cliff-diving in anticipation of a then-impending, pre-90-day-pause global trade war, CNBC was drawing its largest audience in more than three years. In the hours surrounding the opening bell, it was the fourth-most-watched network on cable. During market hours, it beat Fox Business Network by double-digit percentages, and more than doubled its audience in the 25-to-54-year-old demo. Meanwhile, CNBC.com saw its highest number of page views in more than four years, with traffic surging 114 percent over the quarterly average. The numbers might have ever so slightly been juiced by the fact that the network was momentarily responsible for promoting a then-erroneous report that Trump was considering a 90-day pause on the tariffs, which sent markets whipsawing. As we now know, it eventually proved true. Alas, the salient detail here is that CNBC achieved all this with an average of just 275,000 viewers, a stark reminder of cable’s ever-declining audience and the perils of being tethered to linear distribution—which explains why NBCUniversal is spinning it off along with the rest of its cable networks, excluding Bravo. And yet, CNBC’s enduring influence in the financial sector amid periods of heavy market volatility, particularly during Sorkin & Co’s Squawk Box, is a reminder of the unique value of the brand, which could make it an enticing acquisition target down the line. “I love their business and would buy it today,” one major media executive told me. After MSNBC, CNBC is seen as the most valuable asset in the SpinCo portfolio. I’m reliably told that while CNBC averages a small fraction of its sister network’s average audience, it still generates more than half a billion dollars in EBITDA for NBCUniversal. At SpinCo, where I’m told the combined EBITDA of the assets will be between $2 billion to $2.5 billion, it is likely to account for roughly a quarter of the business. In an increasingly nonlinear world, CNBC may prove to be the more durable brand, especially if it can build a digital enterprise business that services high-net-worth financial professionals and business leaders—you know, the non-terminal crowd, even if that includes geriatric day traders in Boca. To date, both MSNBC and CNBC have benefitted from being part of the NBCU bundle, which made them essential to any cable package and yielded nice carriage fees. But while MSNBC’s audience is largely composed of anxious AARP liberals who may never make the jump to streaming, CNBC has a higher value proposition. Its audience includes high-net-worth and aspiring HNW professionals who rely on it as a SportsCenter for market updates, from Squawk Box ’til market close, and thus like to keep it on at the office, on the treadmill, and in the clubhouse.

Beyond Linear

To be sure, there is also a very significant audience of retired septuagenarian Jim Cramer fanatics out there who are willing to pay for the latest insights from the perpetually hoarse and hyper-animated investment analyst. Notably, Cramer’s CNBC Investing Club, a subscription service which the network launched in 2021, is its fastest-growing business, and just coming off its best two quarters yet. But it’s not necessarily a business that CNBC wants to stake its future on—not scalable, of course, and Cramer has a very favorable rev. split, too. “The media watchers who see CNBC’s potential to monetize rich people who run businesses and work on the trading floor, they’re not thinking about the Cramer audience,” said one media executive with insight into CNBC’s business. For CNBC president KC Sullivan and most members of the front office, the network’s true potential lies in monetizing its wealthier, prosumer audience. The challenge is figuring out how to create a robust nonlinear business that can leverage the brand to service this audience through streaming, as well as subscription services that provide not just market news, but a suite of offerings, from investment and personal finance advice to various industry verticals, all priced far below a Bloomberg subscription. A couple years ago, CNBC dusted off its CNBC Pro business, which provides subscribers with in-depth trading analysis and investment advice. In recent months, it has added three verticals—Sport, Changemakers, and Inside Wealth—in the hopes of generating new revenue streams via sponsorship, advertising, and subscription products. Most notably, it has launched CNBC+, a subscription streaming service on Apple TV and Roku that features both a livestream of global programming and an on-demand library of CNBC content. “We are looking at additional over-the-top streaming and how we can monetise [this],” Deep Bagchee, the president of CNBC International, recently told the FT. “There will be lots of ways for you to consume CNBC.” These are nice green shoots, to be sure. Still, several of the media executives I talk to suggest that CNBC hasn’t come anywhere close to maximizing its full potential, and they’re not wrong. “One of the big mistakes NBCUniversal made,” one veteran media executive told me, is that “they failed to ever really build a proper digital business.” Others cited the internal roadblocks of a heavily matrixed organization, along with the evergreen talent-related complications. But, presumably, this should be far easier to achieve at a financial news network with an engaged audience of professionals than at a mass market, general-interest news service like CNN, or even NBC. Perhaps that’s a challenge SpinCo chief Mark Lazarus and KC can solve once the network is spun out—or perhaps it’s a challenge for a new owner, a few years down the line.

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