CNN-ABC News merger ruled out

  • Business
  • Saturday, 15 Feb 2003

LOS ANGELES: AOL Time Warner Inc has ruled out any further consideration of merging its CNN cable news network with ABC News, saying such a combination is proving too problematic to pursue. 

The decision, announced on the air by CNN’s Moneyline host Lou Dobbs and followed by a brief corporate statement on Thursday, came months after word first surfaced of merger talks between CNN and ABC, a unit of Walt Disney Co. 

A potential merger had been seen by analysts as a way for the two companies to cut costs in the face of increasingly heated competition in the TV news industry, but it was never clear how a union between ABC News and CNN would have worked in practice, especially as both news organisations gear up to cover a potential war in Iraq. 

In the end, AOL Time Warner said the task of combining the two entities had turned out to be too complicated. 

AOL is still reeling from its acquisition of Time Warner, which was completed in January 2001. The value of the company’s stock has fallen 70% since then amid a wave of executive departures. 

AOL Time Warner has said its No. 1 priority is cutting its US$26bil debt load, and the company last month posted a US$98.7bil net loss – the largest annual loss in US corporate history – for fiscal year 2002. 

Merger discussions have been on and off for some time as CNN faced stiff competition from News Corp Ltd’s Fox News Channel, which has surpassed CNN as the top-rated cable news network. 

For its part, ABC is contending with weak prime-time ratings and advertising revenues, and both networks have grappled with rising news gathering costs.  

Disney declined recently to forecast when ABC would return to breakeven. – Reuters  

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