CNN faces a $5 million defamation verdict and revelations of significant revenue decline, raising questions about the network’s financial health and journalistic practices.
At a Glance
- CNN ordered to pay $5 million in damages to Navy veteran Zachary Young for defamation
- Network’s revenue dropped by $400 million over three years, from $2.2 billion in 2021 to $1.8 billion in 2023
- Despite revenue decline, CNN remains profitable with $400 million net income in 2023
- Trial enters second phase to determine additional punitive damages
- Expert witness suggests using CNN’s revenue to calculate punitive damages
CNN’s Legal Troubles and Financial Revelations
CNN, one of America’s leading (fake) news networks, finds itself embroiled in a legal battle that has not only resulted in a substantial defamation verdict but also exposed the company’s declining financial performance. A Florida jury recently found CNN guilty of defaming Navy veteran Zachary Young, awarding him $5 million in damages. The case stemmed from a November 2021 report by Alex Marquardt, which aired on shows hosted by Jake Tapper and Jim Acosta.
The trial has now entered a second phase to determine additional punitive damages owed by CNN to Young. During this phase, forensic economist Robert W. Johnson took the stand to testify about CNN’s financials, providing rare insight into the network’s economic health.
Johnson’s testimony revealed a stark picture of CNN’s financial trajectory over the past three years. The network’s revenue has experienced a significant decline, dropping from approximately $2.2 billion in 2021 to $2.0 billion in 2022, and further falling to $1.8 billion in 2023. This represents an 18% decrease in revenue over a three-year period, amounting to a $400 million reduction.
Despite the concerning revenue trend, CNN has managed to maintain profitability. The network reported net incomes of $600 million in 2021, $300 million in 2022, and $400 million in 2023. Additionally, CNN’s cash flow profit for 2023 stood at $424.9 million, indicating that the company remains financially stable despite its challenges.
Implications for Punitive Damages
The revelation of CNN’s financial data comes at a crucial time as the court prepares to decide on additional punitive damages in the defamation case. Robert W. Johnson, the expert witness, suggested that CNN’s revenue, rather than its net income or cash flow profit, should be used to calculate these damages. This recommendation could potentially lead to a more substantial penalty for the network.
As the trial progresses, the focus on CNN’s finances adds another layer of complexity to the case. The network’s ability to weather both legal challenges and financial setbacks will be closely watched by industry observers and competitors alike. CNN has not provided an immediate response to the situation, leaving many to speculate about the potential long-term impacts on the network’s operations and editorial decisions.
