Looks like Oprah Winfrey has had one of her trademark “aha!” moments.
Winfrey and Discovery Communications Inc., partners in the Oprah Winfrey Network, announced cutbacks and an executive restructuring at the struggling cable channel.
The moves follow OWN’s decision Friday to cancel its high-profile Rosie O’Donnell talk show and will result in 30 staffers being let go and executives from Discovery Communications being brought in to oversee key operations.
The changes come as OWN continues to struggle to find its voice. Launched in January 2011, OWN has already cost Discovery more than $300 million in programming and marketing costs. The channel’s performance has been so weak that there has even been speculation — denied by insiders — that if the situation doesn’t improve soon the plug could be pulled.
“We’re as committed now as we’ve ever been and are bullish about the long-term value we are building,” Discovery Senior Executive Vice President David Leavy said Monday.
Winfrey, who met with the staff of OWN at its Los Angeles headquarters to announce the cuts, said in a statement that the “economics of a start-up cable network just don’t work with the cost structure that was in place.”
At one point, OWN had a staff of more than 150 people. After this latest round of cuts, OWN will have about 90 on staff. These cuts do not include the dozens of people laid off in the wake of O’Donnell’s show getting the ax.
As part of the restructuring, Discovery Communications will have more say in the business operations. Initially, Discovery had something of an arms-length policy when it came to OWN.
However, as the losses have piled up and the executive suite of OWN started to resemble a revolving door, Discovery decided it needed to become more involved in the channel’s operations.
“The cost structure was not sustainable; we had to right-size that,” Leavy said.
In January, Discovery dispatched Rita Mullin, a longtime Discovery programmer, to help shore up programming at OWN. Now, as part of this restructuring, Neal Kirsch, Discovery’s chief financial officer, will shift to OWN and become its chief operating officer and chief financial officer.
Discovery is also bringing in executives to oversee production and marketing for OWN.
The changes come just two weeks before OWN is scheduled to begin making its upfront programming presentations to advertisers in Chicago, New York and, later, Los Angeles.