CNN Loses Lou Dobbs In Another Blow to Net

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Taking its second blow during the past year, Cable News
Network has now lost Lou Dobbs, one of its marquee talents and the executive who pushed
for CNNfn's transformation into a 24-hour-per-day service, which is slated for this fall.

In a turn that surprised his staffers, Dobbs abruptly
tendered his resignation from CNN last Tuesday to launch a new Internet venture,
Space.com, a Web site for news, entertainment and educational content about space.

Dobbs, CNNfn's president and a CNN executive vice
president, was CNN's No. 2 talent behind Larry King. His flagship show, Moneyline News
Hour with Lou Dobbs
,is one of CNN's top five ad-revenue generators, commanding
top CPMs (cost per thousand homes).

The questions left unanswered last week were: Who will
replace Dobbs permanently, and what is the future of his pet undertaking, CNNfn?

Dobbs was slated to moderate Tuesday's (June 15)
"Cable's Turn at the Century" panel -- which includes Vulcan Northwest Inc.
chairman Paul Allen and Time Warner Inc. chairman Gerald Levin -- at the National Show in
Chicago.

CNN anchor Jeff Greenfield appeared to be the leading
candidate to replace him, at the network's request. A CNN spokeswoman said Dobbs was to
have appeared as president of CNNfn -- a post he no longer holds -- so it wasn't
appropriate for him to go on.

"It's basically our call, and we're going to
substitute," she said.

CNN will face a tough challenge finding a business anchor
and personality who commands the kind of respect -- on Wall Street and Madison Avenue --
and ratings that Dobbs does.

"This is going to be a pretty significant
challenge," said Bill Carroll, director of programming at rep firm Katz Television.
"This is a very sudden, immediate and jolting change."

Willow Bay and other CNN talent will fill in as interim
anchors on Moneyline. Speculation last week was that Bay might be a permanent
replacement, which would pit her against CNBC's "money honey," Maria Bartiromo,
co-host of that network's Business Center.

"That would be taking [Moneyline] in a
different direction," Carroll said.

David Bohrman, CNNfn's executive vice president, will
continue to oversee the CNN offshoot, while CNNfn executive vice president Jeff Gralnick
will be in charge of Moneyline. Bohrman and Gralnick will report to CNN News Group
chairman Tom Johnson.

It remains to be seen how committed parent Time Warner will
remain to Dobbs' project, CNNfn, which has slowly grown to 12 million homes. CNNfn has
been in a hiring mode, recruiting Tony Guida, Jack Cafferty and Howard Polskin, among
others, in order to gear up for expansion to 24 hours later this year.

Dobbs almost quit in 1997, but he won his battle to have
CNNfn's hours extended to its current 18 hours per day, five days per week.

"Lou was clearly the champion of [CNNfn] inside Time
Warner," CNBC senior vice president of business news Bruno Cohen said. "To
continue, someone else has to emerge as its champion."

In a meeting last Thursday with CNNfn staff in New York,
Johnson assured employees that Time Warner was behind the financial network, according to
Bohrman. Dobbs also attended that meeting.

Bohrman said he got those same assurances himself during a
phone call last Wednesday from Levin and Johnson.

Bohrman said Levin told him, "I'm CNNfn's biggest
fan." Johnson also told Bohrman that Time Warner vice chairman Ted Turner was a big
supporter of, and committed to, the financial-news network.

"Our plan is still to go 24 hours, five days a
week," Bohrman said. "It's up to me to decide when we'll go. My guess is that it
will be in the fall. In the next month, we'll try to pin down a real date. CNNfn is going
to grow and be profitable."

Dobbs' exit marks another black mark on the tenure of CNN
U.S. president Rick Kaplan, who recently publicly clashed with the anchor. Dobbs was with
CNN at its inception in 1992.

Kaplan's first setback at CNN happened last July with the
disastrous "Tailwind" story, which the network was forced to retract after
airing it during the debut episode of NewsStand: CNN & Time.

"If you lost Lou Dobbs, you don't want to have that on
your resume," said Al Primo, the former news executive who created ABC's popular Eyewitness
News
format. "You just lost the biggest star on the network."

Primo recently founded foreignTV.com Inc., a
video-streaming site that just hired ex-CNN correspondent Peter Arnett, who left the
network earlier this year in the aftermath of the Tailwind scandal.

Dobbs couldn't be reached for comment last week. But in
several published reports, he said he left CNN because the brass there objected to his
plans to take a stake in Space.com.

He also denied that he planned to join any of CNN's rivals,
such as CNBC or Fox News Channel. His exit deal with CNN reportedly had a noncompete
clause.

In a radio interview with Don Imus, Dobbs downplayed his
recent public tiff with Kaplan.

Although Dobbs characterized their go-around as a typical
newsroom squabble, there has been a history of bad blood and clashing egos between Kaplan
and Dobbs.

Most recently, Dobbs and Kaplan crossed swords when Kaplan
ordered Moneyline to cut to a live speech by President Clinton from Littleton,
Colo.

Dobbs has threatened to leave CNN on several occasions. In
1995, then-CNBC chief Roger Ailes almost succeeded in luring Dobbs away. According to
sources, in order to placate Dobbs and keep him put, Turner launched CNNfn and put Dobbs
in charge.

CNN is doing well in the midst of cable's booming upfront
ad market. It hasn't seen any negative economic impact from Dobbs' departure, nor does it
anticipate any, according to Larry Goodman, president of CNN sales and marketing.

CNN had ad deals with three financial-services companies
pending, and they all closed after the news of Dobbs' exit was announced, Goodman added.

"CNN financial programming is bigger than any one
person," he said. "The brand is bigger than the anchor -- not to diminish the
anchor."

Some media buyers were taking a wait-and-see attitude about
the impact of Dobbs' departure.

"In the short term, you'll see no impact, because it
will take Nielsen [Media Research] a little while to register its numbers," said Mark
Stewart, executive vice president and media director, North America for McCann-Erickson
Worldwide Advertising.

"Longer term, the audience will decide," Stewart
added. "People do have a relationship with Dobbs, and he's definitely a strong
subbrand for CNN."

Last year, CNNfn itself generated $30 million in revenue --
$16 million in ad sales and $14 million in license fees -- according to Paul Kagan
Associates Inc.

Carroll and others credited Dobbs with having a management
team in place at CNNfn and CNN's financial-news area that will carry forward without him.

"He's pretty much established an infrastructure at the
network," Carroll said. "It's not a one-man band."

Neil Cavuto, FNC's vice president of business news and
anchor of The Cavuto Report, said CNN remains a formidable competitor, even without
Dobbs.

"At first blush, it's obviously a negative," he
said. "But he created such a powerful brand and organization that to his credit, it
will more than survive his leaving."

Hank Kim contributed to this story.

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