Business Movers: Episode 3 – Making the News - Ted Turner and CNN | Ted Versus Reese

Release Date: March 27, 2025

Introduction

In the third episode of Business Movers, Wondery delves deep into the tumultuous relationship between Ted Turner, the visionary behind the Cable News Network (CNN), and Reece Schoenfeld, the channel's ambitious Chief Executive Officer. Set against the backdrop of the early 1980s, this episode highlights the internal struggles, financial crises, and power dynamics that threatened to derail CNN’s rise as the world's first 24-hour news channel.

The Early Days of CNN and the Turner-Schoenfeld Partnership

By the winter of 1981, CNN had established itself as a pioneering force in 24-hour news broadcasting. Despite overcoming initial setbacks and successful live coverage of major events like the MGM Grand fire, John Lennon’s assassination, and President Reagan’s shooting, the network was grappling with significant financial losses—costing Ted Turner approximately $9 million annually (equivalent to $20 million today).

Ted Turner, renowned for his bold business moves, had recently decided to launch a second news channel in January 1982, aiming to solidify his dominance in TV news. However, this expansion doubled the financial strain on his resources. Turner relied heavily on Reece Schoenfeld, who had been instrumental in CNN’s operational success, to navigate these challenging times.

Unionization Crisis at CNN

December 1981 marked a critical juncture for CNN when Reece Schoenfeld encountered unexpected internal resistance. A new technician, Deborah, began advocating for unionization among CNN’s young and overworked staff. Reese recognized the potential disaster this posed, especially with Ted Turner's zero-tolerance stance on unions.

• Key Quote:
  • "If they unionize, they're only firing themselves. Talk to them. Make them understand," — Pat O'Gorman, Reese’s wife (Timestamp: 00:12:45)

Reece, feeling the pressure, enlisted the help of his wife, Pat O'Gorman, to persuade the staff against unionizing. Pat’s heartfelt appeal emphasized CNN’s financial instability and the necessity of maintaining low wages to retain fresh talent straight out of college. Her efforts were successful, resulting in a decisive 3-to-1 vote against unionization. However, this victory was short-lived as it strained the already fragile relationship between Turner and Schoenfeld.

Ted Turner’s Intervention and Ambitions

In the spring of 1982, Turner’s ambitions led him to seek an exclusive interview with Fidel Castro, the Cuban leader. Although Reece understood the significance of this opportunity, he was concerned about the journalistic integrity of having Turner conduct the interview himself.

• Key Quote:
  • "If Ted was left in charge, the interview would lack journalistic rigor and integrity," — Reece Schoenfeld (Timestamp: 00:28:37)

Despite Reece’s reservations, the logistical challenges and Turner's waning interest eventually shelved the interview. This incident underscored the growing tension and foreshadowed Schoenfeld’s diminishing influence within CNN.

Financial Struggles Intensify

By February 1982, CNN's financial woes became undeniable. Bill Bevins, CNN’s Chief Financial Officer, revealed that the network was hemorrhaging funds, exacerbated by the launch of the second news channel. Bevins proposed a public offering to secure necessary capital, but Turner’s impulsive nature and regulatory constraints thwarted this plan.

Turner’s failed attempt to secure an Initial Public Offering (IPO) led him to discover a new revenue stream by monetizing CNN's content for local stations, replacing the old reciprocal agreements with paid licensing. This strategic pivot provided CNN with a much-needed financial boost, but the sustainability of their rapid expansion remained uncertain.

Leadership Clash and Schoenfeld’s Dismissal

By May 1982, the friction between Turner and Schoenfeld reached its peak. Despite CNN’s improving ratings, Turner became increasingly dissatisfied with Schoenfeld’s management style and discretionary spending on international reporting and high-profile hires like Mike Douglas.

• Key Quote:
  • "I like Sandy. I just find her a little temperamental to work with and I think we can do better," — Ted Turner (Timestamp: 00:30:12)

Turner ultimately decided to terminate Schoenfeld’s role, citing mismanagement and excessive expenditure as the primary reasons. Schoenfeld was offered a consultancy role with diminished authority, which he declined, choosing to leave CNN entirely. Turner then appointed Burt Reinhart, an executive vice president and Schoenfeld’s longtime friend, as the new CEO. However, the departure of Schoenfeld was a critical blow to CNN, marking the end of its foundational leadership.

Emergence of Competition: Satellite News Channel (SNC)

Shortly after Reinhart took over, CNN faced its first direct competitor—Satellite News Channel (SNC). Launched on June 21, 1982, SNC mirrored CNN’s 24-hour news format but offered a more rigid, rotating newscast structure. With broader initial availability, SNC quickly began eroding CNN’s market share.

Turner’s response involved the continuation of CNN2, a similar short-form news format. However, SNC’s aggressive entry into the market posed a significant threat, forcing Turner to adapt swiftly to maintain CNN’s audience and financial stability.

Conclusion

By mid-1982, CNN stood at a crossroads. The departure of Reece Schoenfeld, coupled with the financial strain of launching a second channel and the emergence of SNC, tested the resilience of Turner’s vision. This episode of Business Movers encapsulates the high-stakes drama of transforming a groundbreaking idea into a sustainable business, highlighting the intricate balance between visionary leadership and financial pragmatism.

As the episode concludes, listeners are left contemplating the fragile dynamics that underpin successful business ventures and the pivotal decisions that can alter their trajectories.

Notable Quotes with Attribution and Timestamps

• Pat O'Gorman: "If they unionize, they're only firing themselves. Talk to them. Make them understand." (12:45)

• Reece Schoenfeld: "If Ted was left in charge, the interview would lack journalistic rigor and integrity." (28:37)

• Ted Turner: "I like Sandy. I just find her a little temperamental to work with and I think we can do better." (30:12)

Recommendations for Further Reading

For those interested in exploring the intricate details of CNN’s rise and the personalities behind its success, the following books come highly recommended:

• “Me and Ted Against the World” by Reece Schoenfeld
• “Mediaman” by Ken Auletta
• “CNN: The Inside Story” by Hank Whittemore

About the Podcast

Business Movers is a production of Wondery, brought to life by host Lindsey Graham. This episode was written and researched by Owen Paul Nichols and Senior Producer Scott Reeves, with executive production by William Simpson, Aaron O’Flaherty, Jenny Lauer Beckman, and Marshall Louie. The sound design team, including Mohammad Shazid and Molly Bond, ensured an engaging auditory experience, complemented by music from Thrum.

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