Turner boss John Martin is lowering the boom.
The CEO of Time Warner’s cable-network division, which includes TNT, TBS and CNN, plans to shed 550 staffers as part of a drive to free up cash for rising sports rights and more original programming.
The cuts represent nearly 7 percent of the division’s domestic workers. Turner has nearly 16,000 employees worldwide, about half of them in the US. Workers will be offered buyout packages first. If there aren’t enough volunteers, there will be pink slips.
“The pain will be spread across the board,” said one source familiar with the plans. “[Former CEO Phil Kent] ran it for many years and the nature is that fatty tissue builds up.”
Turner has been bracing for cuts since June, when relatively new CEO Martin unveiled his Turner 2020 mission for “future-proofing” the company. Last week, he fired another warning shot.
“Division leaders now are reviewing the working groups’ reports on their respective areas of oversight,” he wrote in an internal memo dated Aug. 19.
“Our plan is to begin communicating in the next two months both general and specific changes we will make to structures, models and roles.”
Martin is looking at a big jump in costs to renew TNT’s contract to air basketball games on TNT and TBS, with the league said to be seeking to double its fees.
Turner is seeking to renew the last major US sports deal up for grabs until 2021. Live sporting events like the NBA are critical to boosting the fees cable providers pay to carry the networks.
Meanwhile, TBS and TNT — which adopted the new tagline “TNT Drama. Boom” in the spring — have been struggling for a fresh crop of hits.
Martin, along with Time Warner CEO Jeff Bewkes, have promised to add more original programs in a bid to lift cable sales, which are lagging rivals.
While TNT and TBS are the big entertainment channels, Turner’s slumping cable news networks, CNN and HLN, will also bear the brunt of the layoffs.
Atlanta-based CNN might scale back by culling TV personalities with big contracts but mediocre ratings, sources said.
The network could also cut back on contracts for a slew of on-air experts.
“We are going to do less and have to do it with less,” CNN chief Jeff Zucker said during a news meeting with staffers, according to the Atlanta Journal-Constitution.
The news is another morale blow to staff at CNN, which was just weeks ago was contemplating its future under a new owner. Twenty-First Century Fox was willing to spin off CNN to win approval to acquire Time Warner before abandoning its pursuit.
After spurning Fox’s $80 billion offer, Time Warner told investors that it would likely incur second-half restructuring costs on its last earnings call.
The layoffs will be the first big move by Martin, who was previously chief financial officer of parent company Time Warner and is in his first major operational role at the firm.
Turner, which has offices in New York, Los Angeles and in Atlanta, was sized up by consultants recently who bench-marked the firm against others in the media space. The Wrap reported Monday that workers had been notified of the layoffs.