On the final season of HBO’s The Newsroom, the fictional drama examined some of the real issues facing Time Warner, parent company of CNN; Comcast, which owns MSNBC; and to a lesser extent, Twenty-First Century Fox.
All three of those media giants must balance the ongoing demands of delivering the news on their respective networks while growing viewership and ratings. In this episode of Industry Focus: Consumer Goods, Vincent Shen and Daniel Kline discuss some of the real world lessons dramatized on The Newsroom from the economic realities of producing any sort of TV programming to the importance of news networks to their parent companies' bottom lines.
A full transcript follows the video.
This podcast was recorded on Aug. 2, 2016.
Vincent Shen: From 2012 to 2014, HBO aired three seasons of The Newsroom. Please chime in here, Dan, by the way if you don't feel like I'm doing the show justice.
Dan Kline: The big conceit of The Newsroom is that Jeff Daniels' character wanted to return cable news from "The Talking Heads" and "The Opinion" to make it the "correct news," which might mean not the most viewers, not the most money. Basically, as the three seasons play out, you see a sort of money versus integrity battle that's raging at the news networks. You look at a CNN or an MSNBC, and just doing news, unless something huge is happening -- sure, if there's a terrorist attack, people, turn in, but on a regular night, just reporting the news with no varnish of opinion, doesn't do as well as Fox News. You can see in the ratings. What is it, four, five million for Fox News many nights, and 800,000 for MSNBC?
Shen: Yeah, it's a huge discrepancy. Fox News is definitely the clear leader when it comes to the three major cable news networks.
Kline: So, on The Newsroom, you basically had that playing out. Jeff Daniels was working with a producer, and they were trying to "do the news the right way." They had a news director, played by Sam Waterston, who was leading that charge. The idea was, what's the balance? Is it OK to put Anthony Bourdain on Sunday nights at 11 when nothing is happening, because it's going to draw ratings and it's going to draw an audience? As a journalist, there's a whole appeal to me of, "We're going to do the news correctly!" And I think at the Fool, we do the news correctly. We mark our opinion appropriately, when we say it's news, it's generally news, we don't put a varnish on it. But of course, everybody has economic concerns, and that's what played out in the background of The Newsroom.
Shen: Absolutely. At its core, the story here behind The Newsroom revolves around this nightly news show, it's a fictional cable network called ACN.
Kline: It's basically Countdown with Keith Olbermann, but they're not saying that.
Shen: Exactly. I was actually personally a huge fan of the show during its original run. I really liked the behind-the-scenes look, granted with plenty of Hollywood poetic license of course, of how a news programming comes to be on the networks you mentioned: CNN, Fox News, in the real world. We're going to play a short clip here from the show that captures this back and forth that Dan was talking about in terms of doing the news the right way versus maximizing profits for these parent companies.
Kline: Right. What's happening here is Sam Waterson's character, Charlie Skinner, who was sort of the crusading news director, has died. The network, which was owned by the Lansing family, with Jane Fonda playing the matriarch of the family, Leona, they've sold it for pressing financial reasons to Lucas Pruitt, a tech billionaire played by B.J. Novak. Of course, what he wants to do is turn the network into the most profitable thing possible, which is a horrifying combination of Gawker and TMZ. In this clip you're about to hear, you have Leona basically convincing him that he doesn't want to do that, that there's some value in letting the journalists have a piece of the pie.
[Audio from The Newsroom]
As you can see with that, obviously, it's a bit played up, it's a bit dramatic. But it's really the balance. CNN and MSNBC are both constantly in transition. It's all put on hold a little bit by the election, which brings new viewers. But after the election ends, what goes on at 10 o'clock on CNN? Do you put a talk show host on? Do you put Dr. Drew or whatever is going to be the most salacious? Do you pick up Nancy Grace and let her do the kidnapped person? Or do you follow the news, even when it's not sexy. One of the dramas on The Newsroom was always, do we lead with the important story which might be politics or military, or do we go to Kim Kardashian's latest low-cut outfit or whatever people might be most interested in?
Daniel Kline has no position in any stocks mentioned. Vincent Shen has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Time Warner. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.