Fox News vs CNN | Non-Stop News | 1

0:08October 1996, Yankee Stadium, New York. Ted Turner breaks into applause as the Atlanta Braves deliver another shutdown inning. Oh yeah, go Braves! Turner is the 57-year-old owner of the Atlanta Braves, and the team seems on track to win the World Series. But for him, baseball is the minor league. He's the founder of Turner Broadcasting, the cable TV giant behind CNN, the first 24-hour news channel. And a few weeks ago, he merged that company with Time Warner in a deal worth$7.5 billion. He should feel triumphant. But the moment the game resumes, Turner's smile falls and his thin white mustache droops.

0:57And that's because he can't stop thinking about his nemesis, Rupert Murdoch, who's been stalking CNN. Murdoch just launched the Fox News Channel, and it's out to break CNN's stranglehold on cable news. Time Warner's already raising its defenses. It's not just the new owner of Turner Broadcasting. It's also one of the nation's largest providers of cable TV, controlling the television diet of millions. But while its cable systems already carry channels from rivals like Disney and Viacom, It's refusing to put Fox News into its customers' homes. And that's left Fox News unavailable in key markets like New York and Los Angeles.

1:42So Murdoch's using his media empire to fight back. His newspaper, the New York Post, has dropped Turner's channel in its TV listings. And this morning, the Post ran a front-page story with the headline, Is Ted Turner Nuts? You Decide. Turner's fuming about it. He turns to his movie star wife, Jane Fonda, who's watching the game with him. That story's a new low, even for Rupert. Yes, but, Tad, you did call Rupert a slimy character in your deposition on Friday. That's because he is. Turner turns back to the game. Then a devious smile creeps onto his face. Well, at least now I can kill him and get off by reason of insanity by using his own paper in my defense.

2:29Well, that would do something. Fonda's reply is drowned out by the noise of a motor overhead. Turner cranes his neck to the sky. A small plane's flying right above the stadium, and there's a sign trailing behind it. It reads, Hey, Ted, be brave. Don't censor the Fox News channel. Turner shakes with rage. But then he notices that probably every Fox TV camera in the stadium is now pointing at him, capturing his reaction for live broadcast. He grits his teeth and forces a smile. But he won't let Murdoch get away with this. If he wants a war, Turner's plenty ready. And he's confident that CNN is going to pull the plug on Fox News.

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5:21In this season, we take an in-depth look at the clash of America's TV news titans, Fox News and CNN. CNN's the original 24-hour news network, the brainchild of Atlanta's bombastic cable TV mogul Ted Turner. Fox News is the upstart challenger, the creation of Turner's nemesis, the wily news tycoon from Down Under, Rupert Murdoch. At stake is the$6 billion TV news market and the chance to set the political weather. Over the years, these rivals have reinvented journalism, changed how we see the world, and traded insults as they competed for viewers and advertisers. This heated rivalry is as outrageous and wild as anything they've put on our screens.

6:13This is Episode 1, Nonstop News.

6:21It's 1978, and in Atlanta, Georgia, it's time for the news on Ted Turner's cable station, WTCG, brought to you by Bill Tush and someone in a chicken costume. Because while the competition delivers the news, Turner wants to appeal to those who can't stand the news. This is WTCG News Update with Bill Tush. We're here at the Northeast Atlanta Shopping Center, where the WTCG News Chicken has just spotted a foul. The News Chicken arrived here to investigate a report of two arrows painted on the street in front of the shopping center. As you can see, with the arrows painted in this manner, it would be quite easy for two cars driven by two dense people to be involved in a head-on collision.

7:06The News Chicken asked one of the center's businessmen what he thought of this highly dangerous situation. To be honest with you, News Chicken, I've never even noticed it before. But while the news chicken reports on his cable channel back at the headquarters of Turner Broadcasting, Ted Turner is rethinking his attitude to news. For years, he's seen news as viewer repellent, dull, serious, and gloomy. So to keep viewers watching, he goes off beat. A dog sporting a tie reads the weather. The star correspondent is a man with a paper bag over his head. And the news chicken questions the Atlanta public.

7:44But now, Turner's doing a 180.

7:53It's December 1978, and the cable industry's in Anaheim, California, for the Western Cable Show. In a packed room, Turner strides on stage. He's a trim 40-year-old with a thin mustache, dimpled chin, and brown hair flecked with gray. He's also the cable industry's most outspoken executive, a trailblazer for a multi-channel future that promises to end the TV tyranny of ABC, CBS, and NBC. Two years ago, he used satellites to turn WTCG into the first national cable TV channel in America. He branded it the Superstation. Now he's ready to shake up the industry again. The room falls quiet as Turner grips the lectern and looks out at the audience.

8:40Today, we announce a new service for cable subscribers. His new service will be called the Cable News Network, CNN. It'll program continually updated national news, business news, sports and features, 24 hours a day. The audience looks shocked. Turner's launching a news channel? Isn't he the guy who had a dog for a newsreader? We plan to launch the cable news network in 1980 with an operating budget of$20 million a year. A journalist near the front raises his hand. Ted, NBC spends$100 million a year producing just a few daily news bulletins. Are you seriously proposing you can take them on with more hours to fill and a fraction of their budgets?

9:29Yep, that is exactly what I'm proposing. Next question. Yeah, you over there. Ted, I run a cable system, and I know for a fact that my subscribers hate news. They switch it off, change a channel whenever it comes on. How are you going to deal with that? More reporters in chicken costumes? No chicken costumes. None of that. Look, you need to understand that 24-hour news won't be boring. It doesn't have time constraints. It can break news and follow the story as it develops. That'll be revolutionary. Another man raises his hand. Uh, Ted, is there even enough news to fill 24 hours? I mean, what are you going to put on air when nothing's happening?

10:14Tell the folks the news is there's no news? Turner laughs, but this is a problem he's yet to solve. He just hopes the experienced TV journalists he's hiring can find an answer.

10:33February 1980, Atlanta. Ted Kavanaugh slowly stirs. He's lying face down on his bed. The early morning sun is streaming through the windows, and it stings. Kavanaugh is CNN's senior producer. He joined the team after becoming convinced that CNN would be the future of news. But that dream's become a nightmare. Kavanaugh spent weeks trying to work out how to fill 24 hours of airtime with continually fresh news. And last night, the challenge broke him. There just isn't enough news. When he began to wonder whether CNN might actually have nothing to air, he left work and hit the bar. Hard. Kavanaugh eases himself out of bed and notices the packed suitcase by the door.

11:26Memories of last night flood back. In a drunken stupor, he decided to pack his bags, catch the first flight to Hawaii, and never return. He stares for a moment at the hastily packed suitcase. Then, an alternative plan emerges from the fog of his hangover.

11:50Later that morning, Kavanaugh swaggers into the old country club that's being transformed into CNN Studio. Construction workers are installing the latest in TV technology, and journalists are huddled together fine-tuning their reporting plans. Kavanaugh finds an empty crate, drags it into the middle of the newsroom, and steps on top of it. Hey, everybody, stop what you're doing right now. Get over here. We need to talk. The CNN crew stops and looks up at Kavanaugh in confusion. But then they notice the bulge of the concealed pistol he always carries under his pant leg and decide they better do what he says.

12:31Kavanaugh puffs out his chest. I hear some of you think CNN won't work, that will fail. But I did not bring you here to fail, and you will not fail because I won't permit you to fail. Everybody understand that? Now, if you've got a problem with that, you can leave right now. No one moves a muscle. Kavanaugh gives an approving nod. Good. And here's what we're going to do. There isn't enough news to fill 24 hours, so we're going to let stories repeat every hour. The old news stays on air until better news displaces it. Got it? The team breaks into smiles. CNN's news problem is solved. Over the next three months, CNN hurdles toward launch day with renewed confidence.

13:24It finishes building its studio, opens bureaus across the U.S., and hires an army of reporters and newsreaders. At 5 p.m. on June 1st, 1980, the first 24-hour news channel goes live. Stand by. Ready, three. Take three. Mike, you have three. Start a slow zoom in a little bit. Roll tape. Take three. Ready, 13. Full. Ready, camera three. One center up. Good evening. I'm David Walker. And I'm Lois Hart. Now here's the news.

13:58Ten months later, March 30th, 1981, Washington, D.C. CNN reporter Sissy Baker sits in her car listening to the police scanner, hoping for a break from a slow news day. There have been too many of those. It's a problem that's leaving CNN low on viewers, even as its expense tab grows. CNN's losing$2 million a month, And people still don't see the point of 24-hour news. But then, the scanner grabs Baker's attention. Shots fired, Hilton Hotel. Shots fired, that's the Hilton Hotel. Baker sits up. Shots at the Hilton? That's where President Ronald Reagan just gave a speech. Four minutes later, CNN's running with a story, and its newsroom is in overdrive.

14:46On air, its presenters play for time, telling viewers they don't know much but hope to know something soon. Details are very sketchy at this moment. We don't know precisely what happened. We don't know the sequence. Moments later, ABC, CBS, and NBC interrupt their schedules to run the story. CNN is now going head-to-head with the TV news establishment in a story that's certain to capture the nation's attention. The pressure's on for CNN to prove it offers something different. So, while the old-school broadcasters switch back and forth from their regular programming and urge viewers to wait for the nightly bulletins, CNN delivers the story play-by-play.

15:29It shares information as it arrives, corrects errors in real time, and updates the story as it unfurls. It broadcasts the chaotic raw video in full, rather than wait for an edited version of the footage. Instead of the polished news of its rivals, CNN's offering journalism in progress. It's rough and raw, but it crackles with excitement. Viewers are riveted. They haven't seen anything like it before. Turner was right. Breaking 24-hour news is different. But that isn't enough to make CNN a success. The moment the excitement about the assassination attempt subsides, CNN's viewers depart. And that is a real problem.

16:20Without viewers, CNN can't attract the advertisers it needs as it burns through staggering sums of money. Turner needs to find a path to profit and soon, or else his news network won't last long.

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19:20February 1982, Cuba. Ted Turner lights a fat cigar. He's on an island just off the Bay of Pigs, and he's chilling with Fidel Castro. Turner got the invite a few weeks ago. It turns out the Cuban dictator's a massive CNN fan. Turner almost said no, but his curiosity got the better of him. So now he's in a leather armchair smoking cohibas and sipping rum with a man the White House calls an enemy of America. Emboldened by alcohol, he leans toward Castro and asks a question he's wanted to ask all evening. Ah, so I gotta ask you this. Is it true you're interfering in Angola and Central America? Castro swirls the rum in his glass, then smiles at his American guest.

20:12Yes, it's true. But so are you. What makes you think it's okay for the U.S. to interfere there, but Cuba shouldn't? Because America stands for freedom and capitalism, and you don't. And what makes you think that you're right and we're wrong? Turner's mouth hangs open. He's got no comeback for once. He always regarded his ideals, America's ideals, as self-evidently good. Yet Castro is equally sure he's in the right. And that gives Turner an idea. He decides that CNN should be a bridge to understanding. It should use its excess of airtime to tell every side of the story so viewers can make informed decisions.

20:57But to do that, CNN must go global. So he invests even more in CNN. He starts opening news bureaus worldwide to build an extensive newsgathering operation. He also starts doing deals to bring CNN to other countries, turning it from a national news network into a global one. And as its reach grows, so does the audience. By summer 1985, CNN's available in 22 countries and more than 32 million homes. And with each cable provider paying CNN an average of 18 cents a month per subscriber, the network moves from loss into profit. With CNN averaging half a million viewers every 24 hours, ad revenue's creeping up, too.

21:46It's also selling the footage its network of news bureaus collects to rival broadcasters to use in their own news bulletins. But just as CNN turns the corner, Turner announces that he intends to sell up to 40 % of the network. Turner's just agreed to buy the movie studio MGM from its owner, Kurt Kerkorian. To pay for it, Turner's arranged nearly$2 billion worth of bonds. These bonds require Turner to make regular cash payments to bondholders, and if he fails to make the payments, he will have to hand over stock in Turner Broadcasting. That means if he wants to keep hold of his business, he needs cash.

22:29Fast. With CNN now turning a profit, Turner figures the quickest way to raise that cash is to sell a stake in his news network. And that catches Rupert Murdoch's attention.

22:49October 1985. Turner Broadcasting Head Office, Atlanta. Turner leans back in his executive chair while holding his phone receiver to his ear. On the line is Rupert Murdoch, the media magnate who's just bought 20th Century Fox. Turner lays out the terms. That's the deal, Rupert. 40 % of CNN for$300 million. Murdoch pauses to think. He's 54 and Australia's richest man. He started out with two local Australian newspapers he inherited from his father. Now, 31 years later, his News Corp empire is worth$1.5 billion and spans the globe. To Murdoch, CNN makes sense. He sees himself as a newsman at heart, and he's keen to break into American TV.

23:39But he doesn't want to share it. Ted, money's not an issue, but a minority stake is no good. I want it all. Turner frowns. He doesn't like Murdoch. His empire's fame for its British tabloid newspapers, which are packed with salacious scandals, celebrities, sports, and topless women. Murdoch sees it as giving readers what they want. Turner dreads to think what a Murdoch-run CNN would be like. Besides, Turner, like Murdoch, does not like the idea of giving up control. No, Rupert, I won't sell CNN. A minority stake is all I'm offering. Well, that doesn't work for me. It's all or nothing. I guess there's nothing to discuss then.

24:23Well, my office stands if you reconsider. I'm afraid I won't. NBC and others are interested in buying a stake. Ah, well then you should do a deal with M. Turner hangs up. Murdoch's out, but he doesn't care. He's still got other interested investors. But as the months go by, those buyers also drop out. And as 1986 continues, Turner starts to panic. He bet his entire company on buying MGM. Now he can't make the cash payments that are coming due. And if he fails to pay on time, MGM's former owner, Kirk Kerkorian, will seize control of Turner Broadcasting and CNN along with it.

25:15Late 1986, Denver, Colorado. In his bedroom, John Malone is awakened by his bedside phone. He's the boss of TCI, the nation's largest cable TV provider. His wife reaches clumsily for the phone. As she does, Malone notices the time on the alarm clock. It's 5.30 a.m. Yes? Malone's wife scowls and passes the receiver to him. It's that whole friend of yours, Ted Turner. Malone sits up and takes the receiver. Ted, don't you know what time it is? Yeah, it's 7.30. In Atlanta, not Denver. Well, whatever. We've only got two months left, John. then it's all over. You've got to do something. You absolutely got to.

26:04Do something? Ted, do something about what? You gotta do something before CNN becomes K &N. K &N? What? Come on. Ted, what the hell's K &N? The Kikorian News Network. If I don't get half a billion dollars in cash within two months, he's gonna own Turner Broadcasting. You're the only option I have left. Malone goes quiet as he plays out the scenarios in his head. Kerkorian is a money man. If he gets Turner Broadcasting, he'll probably break it up and sell its channels to the highest bidders. The most likely buyers are the terrestrial broadcasters, ABC, CBS, and NBC. And if they get those channels, well, they'll use them as leverage to demand TCI pays more for their content.

26:47That's a threat Malone needs to stop. John? John? Malone ignores Turner and keeps thinking. Turner's desperate, and that's an opportunity. TCI could demand a large stake in Turner Broadcasting in return for its help. That would be a good long-term investment. And it would also help him stop Turner demanding too much money for his channels. Malone smiles to himself. He can't lose. John! John, are you there? Ah, yes, Ted. I am. And I'm going to help you. In the weeks that follow, Malone engineers a rescue deal involving more than 30 cable providers. They agree to invest$565 million in Turner Broadcasting.