June 23 (Bloomberg) -- Cable News Network's Jonathan Klein, who took charge of the television network's U.S. operations in November, said it may take 18 months before his changes pay off with a ratings improvement for the unit of Time Warner Inc.

``Ratings never happen overnight,'' Klein, 47, said in an interview in his office overlooking Central Park in New York. ``It would be foolhardy to obsess over them. If you're a television executive and want to improve the numbers, you have to address the quality.''

CNN contributed about $797 million of the $42 billion in sales last year at Time Warner, the world's largest media company, according to Kagan Research, a Monterey, California- based company that estimates sales at networks. Klein has failed so far in boosting ratings. CNN averaged 610,000 U.S. primetime viewers in May, down from 727,000 a year earlier and less than half the 1.4 million that watched News Corp.'s Fox News channel.

Changes Klein has already made include canceling the political debate show ``Crossfire.'' He added an international news program at midday and hired producers from CBS and ABC to work with hosts Anderson Cooper and Paula Zahn.

``It could be a very positive development to move back toward the hardcore news base,'' said Peter Jankovskis, director of research at Lisle, Illinois-based Oakbrook Investments LLC, which manages $1.3 billion including Time Warner shares.

Rise and Fall

CNN pioneered 24-hour cable news when the network first aired in 1980. Eleven years later, it broadcast the Gulf War live from Baghdad, attracting a peak of 5.4 million viewers on Jan. 17, 1991, the first day of the war.

Audiences climbed, rising to 16.4 million in November 1993 for Larry King's interview of Al Gore and Ross Perot about the North American Free Trade Agreement, the most watched scheduled program on U.S. advertising-supported cable TV, according to New York-based Nielsen Media Research.

Fox News, which began a decade ago, overtook CNN in 2002 as the most-watched channel and has been adding viewers since with a talk-show format that includes hosts Bill O'Reilly, Sean Hannity and Alan Colmes.

CNN ``got a little bit complacent,'' said Brad Adgate, a sales researcher at New York-based media buyer Horizon Media, who worked at CNN in 1990 and 1991.

News Corp. and Time Warner don't provide revenue or profit figures for their cable news networks. Analysts estimate CNN's advertising revenue is as much as a third higher than Fox News.

Revenue Comparison

CNN's ad revenue totaled about $404 million last year, while Fox had $288 million, Kagan said. Fox ad revenue growth was faster at 38 percent, compared with 1 percent at CNN, Kagan estimates.

CNN probably had earnings before interest, taxes, depreciation and amortization of $245 million, Kagan estimates. Fox News had 2004 profit on that basis of $190 million on revenue of $507 million. The CNN figures include revenue from the CNN Headline News network.

Shares of Time Warner, which also own cable-TV network HBO, Time Magazine and America Online, rose 2 cents to $17.52 yesterday in New York Stock Exchange composite trading. The stock has dropped 10 percent this year, compared with a 7.8 percent decline at News Corp.

Klein, a former executive at Viacom Inc.'s CBS who oversaw shows including ``60 Minutes,'' and ``48 Hours,'' said he at first ignored calls from CNN about the job.

``He has 18 months or 18 years, I'm more concerned about the quality,'' CNN New Group President Jim Walton, 47, said in a phone interview.

Klein said in the June 10 interview that he wants to refocus CNN, which had its 25th anniversary this month, on breaking news and analysis rather than talk shows.

``Inside Politics,'' ``Crossfire'' and ``Wolf Blitzer Reports'' will be replaced by a three-hour news program combining TV and online reporting on world affairs and politics and presented by Blitzer.

``Advertisers will pay a premium,'' for audiences that CNN draws, Adgate said.

To contact the reporter on this story: Cecile Daurat in New York at cdaurat@bloomberg.net.

Last Updated: June 23, 2005 00:02 EDT