Is time right for CNN-CBS partnership?

Associated Press

NEW YORK

CNN and CBS News have romanced each other off and on for more than a decade, and they are checking again to see if the time is right for a serious business relationship.

Talks aimed at joining forces have foundered in the past because of questions of editorial control and complex labor issues. But the gloomy financial outlook for broadcast network news and CNN’s need to kick-start its domestic network’s ratings give executives at both organizations a greater incentive to overcome the problems.

Jeff Bewkes, chairman of CNN parent Time Warner Inc., said last week that “it’s no secret” that CNN talks with broadcast networks and suggested they need CNN more than CNN needs them.

“There is a lot of fiscal strength at CNN that essentially puts us in a pretty good position offering a solution to the cost problems and profit squeeze that go on in network news,” he said during a conference call with investors. He said it’s entirely possible that CNN and a broadcast partner can come to an agreement sometime during the next year.

Executives at both news organizations, speaking under conditions of anonymity because of the sensitive nature of the talks, said nothing is imminent. But there appears to be a seriousness of purpose that was missing in the past.

Both CBS and ABC News have been losing money as viewers increasingly get their news through cable networks or the Internet. Both news divisions have cut back sharply on staff; ABC cut its news staff by a quarter over the past couple of months, primarily through buyouts. Neither network has the advantage of NBC News, which not only is atop the ratings but can amortize costs through cable affiliates MSNBC and CNBC.

Some have questioned whether ABC or CBS’ news divisions can survive long-term by going it completely alone.

“The landscape is a little bit worse” than when the two companies talked about some way to combine forces in the past, said Marcy McGinnis, a former CBS News executive who was involved in negotiations with CNN more than a decade ago. “They both have more incentives to talk about economies of scale.”