BUSINESS WEEK ONLINE
September 11, 1998

WILL CBS AND CNN MERGE THEIR NEWS CREWS?

A merger could be brewing between the news operations owned by CNN and CBS. Wall Street insiders say the two companies are contemplating a sharing arrangement by which CBS and CNN would consolidate camera crews and reporters. Many CBS bureaus could be closed down. CNN has more than 30 bureaus worldwide.

The notion of combining the two news units isn't new. CNN founder Ted Turner contemplated a merger more than a decade ago, when he made an ill-fated and short-lived run at buying CBS. More recently, however, it has been CBS pushing the concept, insiders say. The network, a distant third in overall ratings, is said to be under pressure from its new president, Mel Karmazin, to cut costs by 10%, or roughly $180 million. Nearly half of it could come from merging the news operations, some experts say. CBS's news division had been expected to slash nearly $50 million from its budget, largely through staff reductions.

Merging the two news organizations would also give CBS a cable news operation, leaving only ABC without one. ABC contemplated launching a news operation several years back but backed off after losses were estimated at over $100 million annually. Fox News and NBC's MSNBC have both shown strong gains in recent months.

By Ron Grover in Los Angeles


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