MidWeek Commentary

HI Market View Commentary 04-25-2022

HI Market View Commentary 04-25-2022

Here at Hurley Investments we do two webinars a week so you know what your money is doing

Why Are we doing this?  Because it makes us put in a 40 hour work week

Did you know your core holding are still not moving even after last year?!!!

Like some managers we don’t just run into risk – 3 months to build a portfolio

Around the time a stock has a 83-84% percent chance of losing 10% or more (16.6%) we add protection and for the earnings even we put the protect as close to the current price of the stock as possible

Long PUT is the right to sell a stock for a certain period of time at a certain price

We use the profits from puts to dollar cost average WITHOUT asking you to put more money into your account

List our big stocks from core holding that have been losers – BA, BAC, BIDU, DIS, F, FB, SQ, UAA, COST, JPM, MU,

Valuation go to the HI Market View Commentary 01-10-2022:

Valuations are the warnings signs that tell us about an upcoming drop in the stock price, market compression (pullback, correction, bear market), recessions

Something I might say tonight will become irrelevant by tomorrow morning = The market is a living, breathing, ever changing beast or friend depending on what positions we have in play

Protection is the key to a 2008, a falling knife, a stock that may get D-listed,

Markets –

China is shutting down and they are “caging” people in their homes

China uses roughly (CNBC) 14% of the worlds oil

S&P 500 down 13%, Nasdaq down 20%

The main reason our markets are down – Rate hikes, inflation and recession fears  

Earnings coming up:

AAPL        4/28  AMC

BA             4/27  BMO

BIDU         5/18  est

DIS            5/11  AMC

F                 4/27  AMC

FB              4/27  AMC

KO             4/28  BMO

MU            6/30  est

SQ              5/05  AMC

TGT          5/18  BMO

UAA          5/03  BMO

V                4/26  AMC

VZ             4/22  BMO


Market Recap
The S&P 500 index fell 2.8% last week as investors digested mixed quarterly earnings reports and signals that the Federal Reserve’s policy-setting committee may raise interest rates by a half-percentage point in May. The market benchmark ended Friday’s session at 4,271.78, down from last week’s closing level of 4,392.59. This marks the S&P 500’s third consecutive weekly decline. With just one week of April remaining, the index is now down 5.8% for the month to date. It is down 10% for the year to date. Last week’s drop came as US companies’ quarterly earnings reports continued to come in with mixed results and guidance as companies grapple with rising costs and supply-chain challenges. With hopes of taming inflation, the Federal Reserve’s Federal Open Market Committee may raise rates in May by a half-percentage point. Such a move, which was signaled Thursday by Fed Chairman Jerome Powell, would be larger than the quarter-point increase that was made at the last meeting. The potential for more aggressive monetary tightening has contributed to some trepidation from investors. All but two of the S&P 500’s 11 sectors fell last week. Communication services had the largest percentage drop, tumbling 7.7%, followed by a 4.6% slide in energy, a 3.7% decline in materials and a 3.6% drop in health care. The two sectors in the black were real estate, up 1.2%, and consumer staples, up 0.4%. In communication services, shares of Netflix (NFLX) tumbled 37% last week as the video-streaming company reported mixed Q1 results and a sharp decline in subscriptions. The energy sector’s drop came as crude-oil futures fell last week. Among the decliners, Baker Hughes (BKR) shares shed 14% as the oilfield services company reported Q1 adjusted earnings per share and revenue that were up from the year-earlier quarter but below analysts’ mean estimates. The gainers in real estate included Host Hotels & Resorts (HST), which said it sold the Sheraton New York Times Square Hotel for about $373 million to an unnamed buyer. Shares rose 5% on the week. Next week, companies planning to release quarterly results include Coca-Cola (KO), 3M (MMM), Visa (V), Microsoft (MSFT), General Motors (GM), Boeing (BA), Caterpillar (CAT), Apple (AAPL), Amazon.com (AMZN), Chevron (CVX) and Exxon Mobil (XOM). The economic calendar for next week will be heavy on housing and inflation data. Among the reports expected, March new home sales will be released Tuesday, followed by March pending home sales on Wednesday, and March personal consumption expenditures or PCE on Friday. Provided by MT Newswires

Where will our markets end this week?


DJIA – Bearish

SPX – Bearish

COMP – Bearish   

Where Will the SPX end April 2022?

04-25-2022           -2.0%

04-18-2022           +0.0%

04-11-2022           +2.0%

04-04-2022           +2.0%

03-28-2022           +2.0%


Mon:          ATVI, PEP, KO




Fri:             BMY, CVX, CL, XOM, HON, PSX

Econ Reports:


Tues:          Durable Goods, Durable ex-trans, FHFA Housing Market Index, Case-Shiller, Consumer Confidence, New Home Sales,

Wed:          MBA,

Thur:          Initial Claims, Continuing Claims, GDP, GDP Deflator,

Fri:             Employment Cost Index, PCE Prices, Chicago PMI, Personal Income, Personal Spending, Michigan Sentiment

How am I looking to trade?

Currently protection on all core holding and making decisions on earnings,  


www.myhurleyinvestment.com = Blogsite

customerservice@hurleyinvestments.com = Email



Florida Republicans vote to dissolve Disney’s special district, eliminating privileges and setting up a legal battle

Sarah Whitten@SARAHWHIT10


  • On Thursday, the Florida legislature passed a bill seeking to dissolve a special district that allows the Walt Disney Company to act as its own government within the outer limits of Orange and Osceola counties.
  • If Gov. Ron DeSantis signs the bill into law, the Reedy Creek special district would be dissolved effective June 1, 2023.
  • Dissolving the district would mean Reedy Creek employees and infrastructure would be absorbed by the counties, which would then become responsible for all municipal services.

Florida Gov. Ron DeSantis has his guns pointed at Disney World.

On Thursday, the Republican-held Florida legislature passed a bill seeking to dissolve a special district that allows the Walt Disney Company to act as its own government within the outer limits of Orange and Osceola counties. The bill passed the state Senate on Wednesday with a vote of 23-16 and sailed through the state’s House of Representatives by a vote of 70-38.

The proposal was first introduced Tuesday by Republican state Sen. Jennifer Bradley, but opponents say it’s really driven by DeSantis. Widely seen as a contender for the 2024 GOP presidential nomination, DeSantis is locked in a bitter and public feud with the entertainment giant over the company’s denouncement of Florida’s HB 1557 law last month. HB 1557, dubbed the “Don’t Say Gay” bill, limits early education teachings on sexual orientation or gender identity.

Until recently, there had been no major public discussion about dissolving Disney’s long-established special district, which it’s occupied for 55 years, leading opposing senators and other critics of the bill to question its timing and the speed at which it’s being pushed through.

State Rep. Randy Fine told CNBC’s “Squawk Box” on Thursday that the bill isn’t retaliatory but said “when Disney kicked the hornet’s nest, we looked at special districts.”

“People wanted to deal with the special district for decades,” he said. “Disney had the political power to prevent it for decades. What changed is bringing California values to Florida. Floridians said, ‘You are a guest. Maybe you don’t deserve the special privileges anymore.’”

Fine said the bill was introduced to even the playing field in Florida for theme park operators. He noted that Disney’s competition, UniversalSeaWorld and Legoland, do not have special districts to operate in.

Democrats in the state Senate, though outnumbered, came to the theme park’s defense on Wednesday during a special session of the body.

“The Disney corporation is being attacked for expressing support for its many LGBTQ employees and customers,” said state Sen. Tina Polsky, a Democrat who represents the 19th district of Florida, during the special session. “Are we really making this enormous decision based on spite?”

And it is an enormous decision.

The district in question is the Reedy Creek Improvement District, which was established in 1967. It was established by the Florida legislature so Disney could develop the infrastructure for Walt Disney World at no cost to Florida taxpayers.

None of this makes any sense. They just bit off way more than they can chew by trying to get the Reedy Creek district dissolved.”

Linda Stewart


The arrangement has allowed Disney to build theme parks, hotels and other tourist experiences within the Reedy Creek district with little to no oversight. The company also became the largest employer of Florida residents in the state and helped the Orlando area become one of the largest hubs for tourism in the U.S.

“I just don’t understand what we are doing here,” said Loranne Ausley, a Democrat who represents the state’s 3rd Senate district, during Wednesday’s session. “We are adding insult to injury by voting on something today that was proposed yesterday going after a private business that has literally made our state what it is, all because they have taken a position that the governor disagrees with.”

The decades-old legislation also ensured that only the landowners within the district, primarily Walt Disney World, would be responsible for paying the cost of municipal services such as power, water, roads and fire protection.

For decades, taxpaying residents of Orange and Osceola counties have been spared maintenance bills for Disney park services.

Currently, Disney pays taxes to both counties as well as the Reedy Creek district. If DeSantis signs the bill into law, Reedy Creek, along with five other special districts established before November 1968, would be dissolved effective June 1, 2023.

Reedy Creek, as a special district, has no representatives in the state legislature.

Absorbing debt

Dissolving the district would mean Reedy Creek employees and infrastructure would be absorbed by the local counties, which would then become responsible for all municipal services. The counties would collect the tax revenue Disney currently pays the Reedy Creek district, but would also be saddled with the district’s liabilities. Namely, its debt.

Reedy Creek historically operates at a loss of around $5 million to $10 million each year, according to its financial reports. But since Disney can subsidize its own operations with theme park revenue, that debt doesn’t have much impact on its bottom line.

According to lawmakers, there’s around $1 billion in debt on the balance sheet that taxpayers would become responsible for should the special district get absorbed, leading to higher taxes.

“No one wants to take that amount of debt up,” Linda Stewart, a Democrat who represents Florida’s 13th Senate district, told CNBC on Wednesday. “None of this makes any sense. They just bit off way more than they can chew by trying to get the Reedy Creek district dissolved … This is a major, major issue that I don’t think it will be, in the end, very successful.”

Taxpayers would also be on the hook for any municipal improvements that Disney currently pays for, including road work.

In 2019, for example, Disney’s Orlando neighbor Universal partnered with Orange County and the state to build a 1.7-mile extension to Kirkman Road between Carrier Drive and Universal Boulevard to accommodate the company’s new park Epic Universe.

That project cost an estimated $300 million, more than half of which Universal footed. The company paid $160 million, leaving Orange County to pay $125 million and the state to pay around $16 million.

The tab for similar projects at Disney could easily pile up.

‘Nothing is going to happen’

Disney declined to comment on the legislature’s efforts, but the dispute is likely to end up in court, according to David Ramba, executive director of the Florida Association of Special Districts.

Ramba said he has dissolved a number of special districts, but never any that didn’t want to be dissolved and noted that “a lot of lawyers are going to get paid” as the parties work to sort out the operational implications of this bill.

Florida law dictates that special districts created by the legislature can only be dissolved with a majority vote of the district’s landowners. For Reedy Creek, that’s the Walt Disney Company.

“Nothing is going to happen,” said Jason Pizzo, a Democrat who represents the state’s 38th Senate district, during the special session Wednesday. “Everyone in this room knows this is not going to happen. I’m just tired of missing my kid’s baseball games for stuff we know is not going to happen.”

Pizzo was among several state senators who spoke out against the bill ahead of the Senate vote Wednesday. Many expressed frustration during discussion on the legislature floor, calling the legislation a “revenge bill” and “political theater.”

″[The governor] wants to prove a point,” Stewart said. “He wants to prove he’s more powerful, but I don’t think he’s more powerful than Disney.”

Disclosure: NBCUniversal is the parent company of Universal and CNBC.


Kevin O’Leary’s No. 1 money mistake to avoid during periods of high inflation


This is an excerpt from the CNBC Make It newsletter. Subscribe here.

From gas prices to grocery stores, inflation is hitting Americans where it hurts: their wallets. 

In March, the price of consumer goods was up 1.2% since February and 8.5% year over year, according to the Labor Department’s most recent data. It seems like anywhere you look, your dollar isn’t going as far as it used to. 

For Kevin O’Leary, O’Shares ETFs chairman and judge on CNBC’s “Money Court,” the most important thing Americans can do with their money during period of high inflation is to avoid keeping the bulk of it in a low-interest savings account. 

“Right now in a bank account, you’re getting [very little] interest,” O’Leary says. “And inflation is over 6%. So you’re actually losing money every 12 months.” 

In other words, if your bank account is giving you 0.01% interest each month, but inflation is at 6%, the value of your money actually decreases by 5.99% over that time frame. 

O’Leary said that when he was young, he “learned the hard way” that banks were a bad place to keep his cash when he saw how little interest his savings account was earning. 

“I realized ‘Wow, I’m not making anything on this cash sitting around,’ and that I had to learn how to invest,” he says. “And that’s exactly what I did.”

O’Leary sides with the experts, including Warren Buffett, who recommend that people put their money into index funds, which are automatically diversified. Despite market volatility, O’Leary points out that the S&P 500 has traditionally outpaced inflation. 

O’Leary isn’t against savings accounts in general. He recommends that everyone “have three months of salary on hand in case of emergency,” but says going above that results in needlessly losing money to inflation. 

“Savings in cash in a bank account make basically no interest, certainly after inflation,” he says. “Investing is keeping pace with the equity and stock markets. And I think you’ve really got to understand the difference between the two.” 


Powell says taming inflation ‘absolutely essential,’ and a 50 basis point hike possible for May



  • Fed Chairman Jerome Powell on Thursday said the central bank is committed to raising rates “expeditiously” to bring down inflation.
  • That could mean an interest rate hike of 50 basis points in May as prices rise at their fastest pace in more than 40 years.
  • “It’s absolutely essential to restore price stability,” he added.

Federal Reserve Chairman Jerome Powell affirmed the central bank’s determination to bring down inflation and said Thursday that aggressive rate hikes are possible as soon as next month.

“It is appropriate in my view to be moving a little more quickly” to raise interest rates, Powell said while part of an International Monetary Fund panel moderated by CNBC’s Sara Eisen. “I also think there is something to be said for front-end loading any accommodation one thinks is appropriate. … I would say 50 basis points will be on the table for the May meeting.”

Powell’s statements essentially meet market expectations that the Fed will depart from its usual 25 basis point hikes and move more quickly to tame inflation that is running at its fastest pace in more than 40 years. A basis point equals 0.01 percentage point.

However, as Powell spoke, market pricing for rate increases got somewhat more aggressive.

Expectations for a 50 basis point move in May rose to 97.6%, according to the CME Group’s FedWatch Tool. Traders also priced in an additional hike equivalent through year’s end that would take the fed funds rate, which sets the overnight borrowing level for banks but also is tied to many consumer debt instruments, to 2.75%.

Stocks also fell, sending the Dow industrials down more than 400 points and the Nasdaq, with its rate-sensitive tech stocks, lower by more than 2%. Treasury yields pushed higher, with the benchmark 10-year note most recently at 2.9%.

At its March meeting, the Fed approved a 25 basis point move, but officials in recent days have said they see a need to move more quickly with consumer inflation running at an annual pace of 8.5%.

“Our goal is to use our tools to get demand and supply back in synch, so that inflation moves down and does so without a slowdown that amounts to a recession,” Powell said. “I don’t think you’ll hear anyone at the Fed say that that’s going to be straightforward or easy. It’s going to be very challenging. We’re going to do our best to accomplish that.”

“It’s absolutely essential to restore price stability,” he added. “Economies don’t work without price stability.”

The Fed had resisted raising rates through 2021 even though inflation was running well above the central bank’s 2% longer-run target. Under a policy framework adopted in late 2020, the Fed said it would be content with letting inflation running hotter than normal in the interest of achieving full employment that was inclusive across income, racial and gender demographics.

Until several months ago, Powell and Fed officials had insisted that inflation was “transitory” and would dissipate as Covid pandemic-related factors such as clogged supply chains and outsized demand for goods over services abated. However, Powell said those expectations “disappointed” and the Fed has had to change course.

“It may be that the actual [inflation] peak was in March, but we don’t know that, so we’re not going to count on it,” he said. “We’re really going to be raising rates and getting expeditiously to levels that are more neutral and then that are actually tight … if that turns out to be appropriate once we get there.”

These will be Powell’s last remarks before the May 3-4 meeting of the Federal Open Market Committee, which sets interest rates. He is the latest Fed official to say rapid action is needed to take down inflation.

Along with the rate hikes, the Fed is expected soon to start reducing the amount of bonds it is holding. The central bank’s balance sheet now stands at close to $9 trillion, primarily consisting of Treasurys and mortgage-backed securities.

Discussions at the March meeting indicated the Fed eventually will allow $95 billion of proceeds from maturing bonds to roll off each month.

Powell noted that the other than pernicious inflation, the U.S. economy is “very strong” otherwise. He characterized the labor market as “extremely tight, historically so.”

Earlier in the day, he referenced former Fed Chairman Paul Volcker, who battled inflation in the late 1970s and early ’80s with a series of rate hikes that ultimately led to a recession. Volcker “knew that in order to tame inflation and heal the economy, he had to stay the course,” Powell said.

The Volcker Fed ultimately took the benchmark rate to nearly 20%; it currently sits in a range between 0.25% and 0.50%.


What doomed CNN+? How rival strategies and executive intrigue fueled the streaming service’s rapid demise

Alex Sherman@SHERMAN4949

Chris Licht wasn’t supposed to start his new job as CNN’s chief until May.

But on Thursday he found himself addressing about 400 full-time CNN+ staffers, some in person and some through a remote video feed. Hundreds of other CNN employees had gotten hold of the remote link, which was passed around from person to person, to hear what their new boss had to say.

Licht’s introductory speech to many employees wasn’t what he’d initially expected when he agreed to take over for Jeff Zucker earlier this year. Licht told employees the project they’d been working on for the past six to nine months, the subscription streaming service CNN+, was ending April 30, about a month after its launch. He acknowledged that many would lose their jobs.

Licht, who officially starts May 2, quit his job as the executive producer of “The Late Show With Stephen Colbert” to run CNN. On Thursday, he came across as passionate and empathetic, according to people who listened to him speak.

The CNN+ debacle

CNN+ will only end up lasting a few weeks. Several factors led to its demise. Here are some key takeaways:

  • Before their merger, Discovery and WarnerMedia executives couldn’t discuss planning operations. Discovery’s leaders were already skeptical of CNN+.
  • WarnerMedia executives expected CNN+ reach 2 million subscribers after a year, but the new leadership saw the service’s early numbers as weak.
  • David Zaslav, CEO of the new Warner Bros. Discovery, has another streaming strategy in mind that focuses on bundling, not standalones.

For some CNN+ employees, it was the first time they’d heard from Licht. But, awkwardly, for scores of others, it wasn’t — they had met Licht just two days earlier, when he toured CNN’s New York headquarters. Licht made a point to stop by the 16th floor, which had recently been converted from a Turner Broadcasting floor to the home of CNN+.

He shook hands with employees — whoever happened to be in the office that day — with no hint that two days later, he’d tell them the standalone streaming service would be shuttered. CNN+ staffers will be allowed to reapply to other roles at CNN. Axios reported about half, or 350 employees, will likely be laid off.

“This is a uniquely shitty situation,” Licht said more than once on Thursday, according to people in attendance.

What led to CNN+’s launch on March 29 and its rapid demise is an unusual mix of corporate deal-making, leadership disagreement, unexpected resignations and legal restrictions.

“It will be a Harvard case study,” said one Warner Bros. Discovery executive.

CNBC spoke with a dozen people directly involved with CNN+ about why it folded so quickly — and why it ever launched in the first place.

CNN+ is born

Zucker and deputy Andrew Morse, CNN’s head of global digital business who eventually became CNN+’s chief, initially discussed launching a streaming service in early 2020, months before Jason Kilar joined WarnerMedia as chief executive, according to people familiar with the matter.

In Kilar, Zucker and Morse found a digital evangelist. He was brought on to transform WarnerMedia into a company that revolved around streaming video rather than one that centered around distributing content to cable networks and movie theaters.

The CNN leadership envisioned CNN+ as something akin to The New York Times – a subscription news product that would eventually house video, podcasts, and all of CNN’s interview and entertainment programming. CNN also felt it had a global branding advantage over the Times, which is known more in the U.S. than abroad. Kilar believed CNN needed a digital subscription strategy, having seen scores of advertising-based digital media properties suffer from low valuations and volatile ad markets.

Over time, as millions of households cancel their cable subscriptions each year, CNN+ would become the landing spot for CNN’s linear network. Similar to ESPN.com, executives planned on CNN.com populating with more and more paywalled content and pushing CNN+ subscriptions. Executives researched potentially making all of CNN.com part of a subscription, but decided the content wasn’t strong enough to merit a full paywall. CNN.com is already profitable and is the most viewed news website, frequently generating more than 200 million unique visitors globally each month.

CNN hired consulting firm McKinsey to help with the operations of CNN+, but Kilar, Zucker and Morse handled the strategy. Based on months of research, they believed CNN+ would get to 2 million subscribers at the end of year one. Kilar believed that figure was a “layup” and a conservative estimate. The goal was to compete with The New York Times, which crossed the 10 million subscriber mark this year after acquiring digital sports website The Athletic.

WarnerMedia executives had a plan to meet their goal: They would use HBO Max, CNN.com and CNN’s linear channel as a constant marketing presence – a “funnel” – to push subscribers. The strategy was to launch CNN+ in the beginning of this year and then bundle it with HBO Max in September. This “would you like fries with that” approach for the millions of subscribers that sign up for HBO Max (HBO and HBO Max had 3 million new net adds last quarter) would ultimately lead to a robust, globally scaled news service.

A series of unexpected events

Both Zucker and Kilar were caught off guard by AT&T’s decision to spin off WarnerMedia and merge it with Discovery Communications — a deal announced in May 2021. Neither were involved in the merger discussions, which were primarily held in secret between AT&T Chief Executive John Stankey and Discovery CEO David Zaslav.

The merger gave Zucker a second wind. He was longtime friends with Zaslav, who would be replacing Kilar as CEO of the new company. Instead of reporting to AT&T’s suits, Zucker seemed in line for a big role under Zaslav.

As CNBC reported, Zucker decided that summer he wouldn’t leave at the end of the year after all. With a refreshed career outlook, Zucker began digging into CNN+. Kilar entrusted him with setting its strategy and programming.

Zucker set a launch date in the first quarter of 2022 and began hiring hundreds of people as producers, software engineers and marketing support.

CNN Worldwide Chief Marketing Officer Allison Gollust was in charge of promoting the new service. Morse ran the day-to-day operations. Zucker had the greenlight from Kilar to spend hundreds of millions on the new service to give CNN a jumpstart into the digital era.

“We are going to take a pretty big swing here, and the company’s behind it,” Morse said in July 2021, when CNN formally announced it would build the new service.

The plan was to premiere with eight to 12 hours of live programming a day on the service. Zucker began signing up outside talent to anchor shows, including Kasie Hunt, who departed NBC News to take the job, and longtime Fox News anchor Chris Wallace.

When the merger was announced, AT&T said the deal would likely close in the middle of 2022.

Given that timeline, the CNN team set a launch date for CNN+ for the first quarter of 2022. That would give the service a few months of breathing space before Zaslav’s leadership team took over for Kilar, who already knew he wasn’t staying on at the company post merger. Zucker wanted to launch the service in January but ran into technical trouble. CNN was making a product from scratch with a brand new tech stack, rather than simply building on top of HBO Max. That took time, and CNN didn’t want to launch a buggy product. Zucker and Morse recalibrated to launch at the end of March.

As the months passed, regulators got through the approval process more quickly than initially expected. By February, AT&T and Discovery were targeting a close date of around April 11 – months earlier than anticipated.

That put the launch of CNN+ just weeks before the merger’s close date.

And then, on February 2, Zucker suddenly resigned.

Impact of Zucker’s resignation

Superficially, Zucker’s departure over an undisclosed relationship with Gollust didn’t change the trajectory of the product. Staffers say the day-to-day activity around the division wasn’t particularly interrupted by the sudden absences, because Morse remained and continued to steer the ship forward. If anything, CNN+ became a unifying mission for staffers. While CNN may have lacked a clear forward strategy with interim leadership and a merger about to happen, launching CNN+ on time was a clear goal for employees.

In that sense, the primary effect of Zucker and Gollust’s resignations wasn’t necessarily harm for the CNN+ product. Rather, their exits firmed the resolve of remaining employees to launch — even with the merger close weeks away. The CNN+ that launched on March 29 looked quite a bit like Zucker’s vision. There were fewer live programming hours than the eight to 12 stated in July, which may have hurt the product given demand for news and content regarding the war in Ukraine, but it launched more or less as designed.

But without Gollust, internal sources said marketing of the product wasn’t as strong in the key weeks before launch. Staffers said Morse was working overtime by that point, trying to wear multiple hats by running the service and getting support from corporate — previously the jobs of Zucker and Gollust.

As a result, the internal marketing of CNN+ — how CNN executives viewed the product compared with Discovery’s incoming leadership — helped lead to its demise.

Different strategies

By early this year, Zaslav had settled on a streaming strategy for Warner Bros. Discovery.

He wanted to push together HBO Max and Discovery+ and use news and live sports from WarnerMedia to make the streaming bundle even more attractive. The collection of assets, he thought, could take on Netflix as a global streaming behemoth. CNN will ultimately be a tab within the larger HBO Max-Discovery+ service.

That made the existence of CNN+ antithetical to his strategy.

If Warner Bros. Discovery was spending hundreds of millions of dollars making programming for CNN+, Zaslav felt the company was misallocating resources. Wall Street tends to judge media companies on their main streaming product. Disney largely trades on Disney+ subscriber numbers. The Warner Bros. Discovery share price will likely move on the bundled number of HBO Max-Discovery+ customers.

CNN+ would be a sideshow niche product. Even if it showed growth, taking subscribers away from the larger bundle with the promise of a cheaper option in CNN+ would hurt Warner Bros. Discovery and represent a waste of resources.

One particularly irritating trait of CNN+’s pricing plan to Discovery executives was its “Deal of a Lifetime” plan — offering a 50% discount (initially $2.99 per month instead of $5.99) for as long a consumer remains a subscriber to CNN+. While that may be a great perk for a CNN+ subscriber, it was a strategic misfit for Zaslav. For anyone who would have signed up to the larger bundle because of CNN content, they now had a “forever” reason not to do so.

Discovery had also already tried niche subscription streaming products, having rolled out GolfTVcycling streaming network GCN+ and Food Network Kitchen in 2020 and 2021. None of those products moved the needle for Discovery. Zaslav and other members of the Discovery leadership, including JB Perrette, who was taking over as Warner Bros. Discovery’s head of streaming, didn’t want to waste time plowing ahead with a strategy they’d already decided didn’t work.

Kilar, Zucker and Morse fundamentally disagreed with the strategy of using CNN as an HBO Max supporter. By giving CNN its own separate home, consumers enter a world of news and don’t leave when they see the variety of content CNN offers. If CNN is part of the larger HBO Max-Discovery+ world, they feared viewers will decide they’d rather watch a reality TV show or HBO drama. The effect would be to substantially diminish the value of CNN over time.

But Zaslav’s team thought the New York Times comparison was silly. The New York Times turned digital users into paying subscribers by putting their content offering behind a paywall. CNN wasn’t doing that. Instead, CNN would be trying to convince an existing user base already getting content for free from CNN.com and watching CNN on cable TV to pay $6 more per month for programming Discovery saw as unnecessary.

Instead, Zaslav’s team felt the correct comparison was Fox’s streaming service Fox Nation, which has reached 1.5 million subscribers since launching in 2018.

The launch

In the weeks before the launch, Morse began begging Kilar and other AT&T executives to see if there was a way he could speak with the Discovery leaders. Staffers described it as Morse “shouting from the rooftops” for a meeting.

CNBC reported the day after Zucker left in February that Discovery wasn’t enamored with CNN+ and disagreed with the strategy. The next day, Zaslav told CNBC he “hadn’t gotten a business review on what CNN+ is going to be and how it’s going to be offered,” which was an ominous statement for its future.

Morse wanted to find out directly from Discovery what Zaslav wanted. But AT&T told CNN’s team it couldn’t have any discussions with Discovery because of so-called gun-jumping laws which don’t allow the two sides to discuss future strategy until a merger closes. Kilar never spoke with Zaslav about CNN+, and he wasn’t going to make decisions about what he thought was best for CNN+ based on media reports.

Zaslav did meet with CNN executives in early March in a so-called “parlor” meeting with Michael Bass, Amy Entelis, and Ken Jautz, who were running CNN after Zucker left, as first reported by Puck’s Dylan Byers. In that meeting, Zaslav inquired about CNN+ and its go-forward strategy, but lawyers in attendance told him he wasn’t allowed ask about it.

So Morse pushed ahead. In the first two weeks after CNN+ launched, 150,000 subscribers paid for CNN+. Yet, as CNBC reported, fewer than 10,000 watched on a daily basis. That number was actually closer to 4,000, a source has since told CNBC.

WarnerMedia executives were actually excited about the start. They viewed the daily active user, or DAU, statistic as pointless. The key metric for all digital services has always been number of subscribers. But Discovery executives felt the 150,000 subscribers wasn’t nearly enough of a foundation to reach 2 million within a year. They knew there wasn’t a hit show coming to CNN+. They saw subscriber numbers declining day after day after an initial pop. And they viewed the daily active user number as significant.

But, they also weren’t going to make a decision about CNN+ when its new leader, Licht, hadn’t even started. So Discovery asked Licht to start work early, behind the scenes, so he could make a determination about what to do with the service.

At 8 a.m. ET on April 11 — the first day Warner Bros. Discovery began trading as a combined company — Licht and Perrette told Morse and his team that CNN+’s marketing budget was immediately going to zero. It was Licht’s first meeting at CNN.

CNN+ staffers left that meeting knowing the product wasn’t going to continue as is. They hoped it wouldn’t be shut down completely, although they feared a decision had already been made. Morse and his team argued the product was just 12 days old. They said DAUs were a silly statistic. They tried to make the point that Alex MacCallum, CNN+’s head of product, had come from The New York Times and The Washington Post. CNN was a news service, and it shouldn’t be judged against niche entertainment streaming services.

They argued 150,000 subscribers is far more than The New York Times, The Washington Post or The Wall Street Journal got in their first two weeks after they launched their digital subscription products.

But Discovery had never thought that comparison was relevant. The April 11 discussion never got heated, but there was clear resignation from the CNN+ side. It was an hour-long meeting to go over two years of work.

Ten days later, Licht announced he’d decided to kill the product. Morse said last week he’s leaving the company after a transition period.

CNN+’s legacy

CNN staffers roundly share frustration that Discovery didn’t backchannel information to delay the CNN+ launch if they were that unhappy with the strategy. But both Discovery and AT&T didn’t want to risk dooming an industry-altering deal over CNN, which makes up less than 10% of WarnerMedia’s annual revenue.

They wonder whether the reason Discovery chose not to relay information in the months leading up to CNN+’s launch was so Discovery can count the hundreds of layoffs and saved operation costs from the service’s shutdown as part of the $3 billion in synergies Zaslav has promised Wall Street as part of the merger rationale. CNN+ isn’t part of the $3 billion promised by Zaslav, according to two people familiar with the matter.

Kilar has been very public about his belief in CNN+. On its launch day on March 29, he wrote a series of tweets touting its importance.

“In my opinion, CNN+ is likely to be as important to the mission of CNN as the linear channel service has been these past 42 years. It would be hard to overstate how important this moment is for CNN,” he tweeted, adding: “CNN+ is also important b/c it is CNN unmistakably embracing a scalable, robust paid digital business model.”

https://platform.twitter.com/embed/Tweet.html?creatorScreenName=sherman4949&dnt=false&embedId=twitter-widget-0&features=eyJ0ZndfZXhwZXJpbWVudHNfY29va2llX2V4cGlyYXRpb24iOnsiYnVja2V0IjoxMjA5NjAwLCJ2ZXJzaW9uIjpudWxsfSwidGZ3X3NwYWNlX2NhcmQiOnsiYnVja2V0Ijoib2ZmIiwidmVyc2lvbiI6bnVsbH19&frame=false&hideCard=false&hideThread=false&id=1508890584878141444&lang=en&origin=https%3A%2F%2Fwww.cnbc.com%2F2022%2F04%2F24%2Fcnn-plus-what-went-wrong-why-it-was-canceled.html&sessionId=30c2cb980177a92bf530cfe8f836ee8e8c742b54&siteScreenName=CNBC&theme=light&widgetsVersion=c8fe9736dd6fb%3A1649830956492&width=550px Some at CNN wonder whether Zucker could have saved the product, given his relationship with Zaslav. But it’s also possible his surprise exit allowed the Warner Bros. Discovery CEO to dodge a bullet. He wouldn’t have to tell his friend that the pet project he’d spent the past year on didn’t have a home at Warner Bros. Discovery. Zucker and Zaslav haven’t spoken since Zucker’s resignation. Whoever is to blame for Zucker leaving, his departure made CNN a less stable asset and one that has given Zaslav his first major headache as CEO of the combined company.

Several past and present CNN staffers told CNBC they believe the CNN+ debacle may speak to a new era of CNN.

While many WarnerMedia employees have complained about working under the ownership of a phone company that didn’t understand entertainment, AT&T largely left CNN and Zucker alone. Zucker wielded a lot of power at WarnerMedia and had full backing for his vision at CNN. Axios reported WarnerMedia planned to spend $1 billion on CNN+ in the next four years.

Zaslav’s swift ax to CNN+, in combination with Warner Bros. Discovery board member John Malone’s comments to CNBC about returning CNN to hard news, signal a more active corporate hand over the organization’s future.

From now on, CNN’s strategy will have to align with its parent company. There’s fear among CNN staffers that if the news organization is only seen as a companion piece for a streaming bundle, it won’t be able to flourish as a brand as linear TV subscribers melt away.

The ramifications of that shift are still unknown. But it will be a culture change for a cable news network whose executives had gotten used to getting what they asked for.

With CNN+, they clearly didn’t.


Investors just pulled a massive $17.5 billion out of global equities. They’re just getting started, says Bank of America.

Last Updated: April 22, 2022 at 5:07 p.m. ETFirst Published: April 22, 2022 at 9:47 a.m. ET


Barbara Kollmeyer

  A person walking on a sidewalk

Description automatically generated with medium confidence People walk along Wall Street near the New York Stock Exchange (NYSE) on February 16, 2022 in New York City.  Are the bears just getting started? That’s a question posed by strategists at Bank of America, who noted Friday that investors pulled $17.5 billion out of global equities over the past week, making for the biggest weekly outflow so far this year. They cautioned that those outflows could well deepen. Since Nov. 2021, Nasdaq peak inflows to stocks have occurred in 16 of 20 weeks, for a total of $229 billion, while private clients bought stocks 17 out of 20 weeks, pointed out Bank of America’s Michael Hartnett, who provided the below chart: Chart, histogram

Description automatically generated UNCREDITED Investors also pulled $8.7 billion out of bonds and $55.4 billion from cash, pouring $900 million into gold. That was before Friday’s stock-market rout, which saw the S&P 500 SPX, -0.87% slump 2.8% and the Dow Jones Industrial Average DJIA, -0.62% plummet 981.36 points, or 2.8%. The S&P 500 is down 10.4% year to date, while the Dow is off 7%. The tech-heavy Nasdaq Composite COMP, 0.02% is down 17.9% so far in 2022, after a 2.5% Friday drop. Breaking down some of the equity outflows, Bank of America strategists noted data showing Europe saw the 10th straight weekly outflow — $2.9 billion, while $1.6 billion exited financials, as money flowed back into buying the technology sector dip. Materials, meanwhile, marked a record 8-weeks of inflows. Chart, line chart

Description automatically generated UNCREDITED A picture containing chart

Description automatically generated   https://www.cnbc.com/select/average-401k-balance-of-americans-in-50s-and-60s/?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail Here’s the average 401(k) balance of Americans in their 50s and 60s — how do you compare? A 401(k) account is a powerful tool that can help take the hassle out of saving for retirement. Jasmin Suknanan401(k) is a type of retirement account that’s provided through your employer and uses pre-tax money to help you save up for your non-working years. Because most employers automatically enroll employees in a certain 401(k) plan and contributions can be automatically deducted from their paychecks, those who participate can avoid much of the hassle of saving for retirement. The process raises two important questions: Firstly, how much money should someone have in their 401(k) for retirement and secondly, how much money do people who are preparing to retire actually have in their 401(k) accounts? While the answer to the first question has a lot to do with when you plan to retire and the type of lifestyle you want to have when that happens, there are a few guidelines you can follow no matter where you are in your retirement savings process to help get you there — Select recently covered how much money you should have saved at every age if you want to fully explore that topic. As for the second question, Select used information from Vanguard’s 2021 How America Saves Survey to dig deeper into what the average American retiree’s 401(k) balance looks like. According to the survey, participants reported the following amounts: Average 401(k) balance of ages 45–54: $161,079 (average); $56,722 (median) Average 401(k) balance of ages 55–64: $232,379 (average); $84,714 (median) Average 401(k) balance of ages 65 and older: $255,151 (average); $82,297 (median) While it can feel nice to have an idea of how much other people have stashed away, keep in mind that personal retirement savings goals can differ based on the type of lifestyle you want to enjoy during retirement. If you plan to travel regularly and make expensive purchases you may not have made when you were younger, for instance, you’re going to need to have a considerable amount of money saved up. If you hope to have a less expensive lifestyle, stay close to family and pick up a few new hobbies, you can probably get away with having a smaller balance. How to start saving for retirement One of the best ways to start saving for retirement is to make sure you’re enrolled in your employer’s 401(k) plan. You can decide what percentage of each paycheck you’d like to defer into this account and some companies will even match all or a portion of what you contribute so you grow your balance even faster. Pay extra close attention to the terms required for matching, though, as some employers have a minimum percentage amount that is required. For example, if your employer matches contributions of at least 3%, you’ll need to contribute at least 3% of each paycheck to your 401(k) in order to receive the match. 401(k) accounts also come with annual maximum contribution limits that change slightly each year — for 2022, you’re allowed to contribute up to $20,500. Keep in mind, however, that it can be very difficult to max out your account. If you’re not able to hit the $20,500 mark, make sure you’re at least contributing enough to receive your employer’s match. Another way to make sure you’re growing your retirement savings is to contribute to a Roth IRA, a powerful tool you can use when it comes to saving for retirement since you can contribute after-tax money that gets invested and grows over time. When you withdraw the money at retirement — anytime after age 59 1/2 — you won’t have to worry about paying any taxes on it either. The sooner you can open up a Roth IRA, the better, because your money will have more time to compound. If you were to open a Roth IRA today by investing $100 and contributing just $3,000 each year — assuming an 8% annual return — in 30 years, you’d have accumulated $340,856. However, if you were to follow the same steps and only give your money 20 years to grow, you’d end up with just $137,752. That 10-year difference can wind up costing you more than $200,000 so it’s better to do it sooner than later. Similar to a 401(k) account, a Roth IRA also has an annual contribution limit, except it’s much lower at $6,000 — this limit is also use-it-or-lose-it, so if you contribute less than $6,000 one year, the remaining limit won’t roll over to the following year. This is yet another reason why it’s important to start contributing to a Roth IRA as early as possible. There are lots of Roth IRA providers out there. If you want a hands-off approach, look into one such as  Betterment or Wealthfront, since their robo-advisors can pick the portfolio that’s right for you and automatically adjust your allocation based on your needs and risk tolerance.

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