Turner Broadcasting CEO Josh Martin is preparing to fire 550 people in advance of the new NBA rights deal, which is expected to cost the company much more money this time around, according to the New York Post's Claire Atkinson:
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.”
As well as the new NBA contract, Turner also wants to add more original programming to TNT and TBS. It appears that CNN and HLN will "bear the brunt of the layoffs," according to the Post.
The current NBA broadcasting agreement, in which Turner and ABC/ESPN share the rights, is set to expire in 2016. The fees will go up, and the Wall Street Journal reported that the NBA is looking for double the $930 million annually it is getting now. This is why LeBron James signed only a two-year contract with the Cleveland Cavaliers this summer -- he has no plans to leave home again, but maximum contracts should be larger after the TV deal has been signed.