CNN, Lies and Video Tape

Roger Ailes took out a full-page ad in the business section of The New York Times today, attacking CNN for lying about how it acquired the so-called "terror tapes." CNN at first denied buying the tapes, then reversed itself and fessed up. A senior CNN producer said the whole flap was "much ado about nothing."

And on one level, he's probably right (what's important is the substance of the tapes, not the amount paid to acquire them). But on virtually every other level, he's wrong. One of the things that's killing AOL with investors is the perception that the company's executive suites are filled with liars and greedheads. That perception exists because it is in some measure true.

A high profile news story confirming that a division of AOL (CNN) is at least partially managed by liars does not help matters. It leaves the impression that the company doesn't understand the precarious status of the larger enterprise, which is this: it's a junk bond company. That means that confidence in what the company's senior managers say is crucial to the company's survival.

The more one looks at the problems confronting (AOL CEO) Dick Parsons, the more likely it seems that CNN will join AOL and the music business in the column of companies to be spun off. The much-ballyhooed synergies have never materialized. CNN's xenophobic Atlanta culture remains unbroken. Fox News Channel has stolen the most lucrative piece of the market (prime time talk). The cost of newsgathering keeps going up and interest in watching it continues to decline. It's now a mature business whose only value-added is political leverage in Washington and other world capitals.

This fall, Mr. Parsons will have to act. It's noteworthy, I think, that he has not said word one in defense of CNN throughout the whole "terror tape" fiasco. He could have, but he didn't. Just as he could have said good things about Robert Pittman, but he didn't. And Pittman, as everyone knows, was disappeared without even an expression of regret.