Oprah Winfrey Network Cuts 30 Jobs in Restructuring
Stock Chart for Discovery Communications Inc (DISCA)
Oprah Winfrey Network, the venture owned by the television host and Discovery Communications Inc. (DISCA), cut 30 jobs in a restructuring and named Neal Kirsch as chief financial and operating officer.
Discovery, the Silver Spring, Maryland-based cable network, and Winfrey’s Harpo Studios said yesterday in a statement that they will absorb the eliminated positions. Kirsch, finance chief at Discovery’s U.S. networks, will move to OWN and report to Presidents Erik Logan and Sheri Salata.
The restructuring followed Winfrey’s review of the network, with Logan and Salata, since becoming chief executive officer and chief creative officer eight months ago. OWN has gone through several leadership changes and struggled to build an audience since its launch in January 2011.
“It is difficult to make tough business decisions that affect people’s lives,” Winfrey said in the statement. “The economics of a start-up cable network just don’t work with the cost structure that was in place.”
The transition to cable has been challenging for Winfrey, who dominated broadcast television talk shows for two decades. OWN canceled Rosie O’Donnell’s “The Rosie Show” last week after five months.
Winfrey’s series “Oprah’s Next Chapter” has attracted guests including Lady Gaga and Whitney Houston’s family and had the highest cable ranking among women in the target 25-54 age group in the Sunday night slot at 10 p.m.
Discovery provides OWN’s funding and had supplied $312 million as of Dec. 31, according to the company’s annual 10-K report filed in February. Results have been below initial expectations, and the company said it’s monitoring the network’s performance in case it needs to write down its investment.
Discovery rose less than 1 percent to $48.09 yesterday in New York. The shares have added 17 percent this year.
As of May 2011, OWN was projected to lose a cumulative $122 million through 2012, according to an estimate by Derek Baine, an SNL Kagan analyst.
“As CEO, I have a responsibility to chart the course for long-term success for the network,” Winfrey said. “To wholly achieve that long-term success, this was a necessary next step.”
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