With a proposed National Basketball Association channel ready to take its place, AOL Time Warner's CNN/Sports Illustrated sports news service will shut down operations later this year.
Even if plans for a co-owned AOL/NBA channel aren't realized, sources said AOL Time Warner still plans to jettison the five-year-old service, which was unable to compete successfully against competitor ESPN News as cable's dominant sports news service.
Sources said nearly 200 CNN/SI staffers were informed last week of the network's impending demise. The decision was made prior to an agreement the NBA has evidently reached with AOL to convert CNN/SI into a jointly owned network in which the two entities would share any revenue generated from ad sales or subscription fees, sources said. That deal could be announced as early as this week.
CNN/SI executives would not comment on the matter, but sources said AOL had made the decision early in order to meet a Jan. 10 accounting-rules deadline. By meeting that deadline, sources said CNN/SI employees would be eligible for severance packages that AOL will offer. Sources also indicated that some staffers will migrate to CNN to cover sports, find other positions within the company, or interview for the new network.
Launched in 1996, CNN/SI was expected to combine CNN's sports coverage with Time Warner-owned Sports Illustrated magazine brand to create a true competitor to ESPN News. But the service struggled to distinguish itself in the crowded sports-news arena. CNN/SI's 19 million subscribers fall below the 26.6 million subscribers of ESPNews, while ESPN's SportsCenter
and Fox Sports News' regional and national sports reports garner solid ratings.
CNN/SI suffered several internal and on-air losses in 2000, laying off several staffers during the summer in an overall restructuring and cost-reduction effort. Last September, the network lost its 11 p.m. slot on sister service CNN, further reducing the brand's exposure to viewers.
The network had attempted to reposition itself by adding more live-event programming. It teamed with Turner Network Television to share rights to the Wimbledon tennis tournament, the Women's United Soccer Association and the National Association for Stock Car Racing. CNN/SI had telecast practice runs and poll-qualifying races.
But the network recently lost its WUSA rights to Pax TV, which signed a two-year deal with the cable-centric league.
While Kagan Associates sports analyst John Mansell acknowledges there's room for two sports news networks, he believes that Disney — because of retransmission consent rights afforded it through broadcast network ABC — had greater leverage to launch and distribute ESPNews than Turner did CNN/SI.
"While 19 million subscribers is great, CNN/SI never truly was able to compete with ESPNews," Mansell said.
Meanwhile, AOL and Disney continue to hammer out agreements with the NBA for separate multi-year distribution agreements. According to sources and published reports, Turner would pay in the neighborhood of $200 million annually for the new NBA/AOL service that would offer four regular-season games per week, as well as a Thursday night doubleheader on TNT.
Sources said the parties would seek monthly subscriber fees of 50 cents for the new network, while Turner has already said publicly that it would seek an increase for TNT with or without a new NBA deal.
The NBA is also expected to reach an agreement with ESPN and ABC, under which the cable network would carry 55 regular-season games on two nights — likely Fridays and Sundays — as well as playoffs.