AT&T pays $18.8M for CNN Center ground and air rights ahead of possible sale of complex
Turner Broadcasting, which is a division of AT&T’s WarnerMedia, paid $18.8 million for the ground lease and air rights from the State of Georgia in mid-June 2021, even as it may be readying a sale of the complex.
CNN Center, which opened in 1976, sits on land that Georgia owned and leased to the building owners, which have changed over time. When CNN moved in, it also acquired the naming rights to the building.
By purchasing the ground lease, AT&T now effectively owns the land where the building sits in addition to the structure itself, while also adding air rights.
Air rights typically involve the space above an existing structure immediately above it or a predefined perimeter above a certain height from ground level.
These can be owned by different parties than the building itself — and are sometimes used in development projects to prevent a neighboring building from being constructed next to another and obscuring views or reducing privacy for occupants.
Snapping up both of these rights could make it easier for AT&T to sell the building because it would loosen restrictions on what could be built on the site should a new developer opt to tear down or add on to the existing structure.
It could also make it easier for a potential developer to obtain financing for a project since banks could see it as a “safer bet.”
CNN first announced the possible sale of CNN Center in June 2020 after AT&T completed its acquisition of Time Warner and reorganized CNN under the WarnerMedia banner.
CNN Center is a multiuse structure that also includes a hotel, food court, shopping and other businesses not related to the network.
Since then, AT&T has announced plans to sell WarnerMedia and merge it with Discovery Inc. to form the proposed company Warner Bros. Discovery. Like with the AT&T acquisition, questions are swirling about potential layoffs that could further reduce the need for office space.
WarnerMedia cut over 1,000 jobs in 2020. The media industry as a whole saw significant revenue drops in 2020 due to cutbacks and shuttering businesses not spending as much on advertising during the coronavirus pandemic. Although revenue has shown signs of improvement, it’s not clear when it will be back to pre-pandemic levels — if ever, putting big pressure on these companies, especially publicly traded ones.
The pending Discovery merger was announced with a potential $3 billion in “cost synergies,” a phrase that often equates to layoffs.
CNN Center, which the network moved into in 1987, is still technically cable channel’s world headquarters but now functions more in behind the scenes roles, with HLN’s “Morning Express” the only regular weekday show to still originate from the facility — and it doesn’t air on the primary CNN feed.
Meanwhile, WarnerMedia invested millions into a new facility in New York City’s Hudson Yards development while leaving CNN Center mostly the same.
At its heyday, CNN Center was home to most of the network’s dayside live programming, with a large newsroom set used for most of these broadcasts.
WarnerMedia did not comment on the potential sale or workforce reductions from multiple outlets.
One scenario would be to significantly cut back on its operations in Georgia and leave a smaller footprint in the city but likely at the Turner campus once the CNN Center leaseback ends. WarnerMedia already occupies space in the Techwood region of Atlanta, which could absorb at least some of CNN Center’s operations.
WarnerMedia already built an IP based master control center at Techwood. There is a similar one in London.
Moving out of CNN Center would mean the network would lose what is, at least officially, the primary CNN newsroom, but other facilities around the globe could pick up this functionality.
It is perhaps less likely that, even after the merger, Warner Bros. Discovery would pull out of Atlanta completely, given the infrastructure that already exists there for the former Turner properties and the advantage of having a geographically disparate location for critical operations. Discovery has significant backend technical operations in Virginia and Florida.
WarnerMedia originally owned the building CNN and other businesses operated out of in Manhattan, but opted to sell it in 2019 with a leaseback option through 2034.
It occupies 2.4 million square feet inside 30 Hudson Yards.