UPDATE 5-CNN taps media veteran Thompson as CEO to spearhead turnaround

(Adds details about Thompson's background in paragraph 4 and context about CNN in paragraph 6)

By Aditya Soni

Aug 30 (Reuters) - Warner Bros Discovery named Mark Thompson as CEO of CNN on Wednesday, tasking the former New York Times and BBC chief with reviving a news network beset by sagging ratings and falling profits.

Thompson succeeds Chris Licht, who stepped down in June after a rocky year at the helm that included a divisive town hall with former Republican U.S. President Donald Trump and the shutdown of the CNN+ streaming service just weeks after its launch.

With Thompson, Warner Bros Discovery is turning to an executive with ample experience at the top level - unlike Licht, a former TV producer who had worked on "The Late Show With Stephen Colbert" and MSNBC's "Morning Joe".

During his 8-year tenure as the CEO of the Times, Thompson helped transform the Gray Lady into a beacon for newspapers in the internet age by focusing on digital subscriptions.

Under Thompson, the Times expanded its offerings beyond news, launching a cooking guide and online games and acquiring the product recommendation site Wirecutter. It also moved into new formats, such as the popular "The Daily" podcast.

The Times' share price grew nearly five-fold in the period, widely outperforming the benchmark S&P 500 index.

At CNN, it's unclear whether Thompson will be tasked with a similar mission – broadening the brand – or focusing on the core news product.

"Mark is a true innovator who has transformed for the digital age two of the world's most respected news organizations," Warner Bros Discovery CEO David Zaslav said.

Shares of the company rose more than 1% on Wednesday, outstripping the broader market. They have risen nearly 40% this year.

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Thompson's appointment, effective Oct. 9, comes ahead of what is expected to be a hotly contested 2024 U.S. presidential election with candidates including Trump, Democratic incumbent Joe Biden and Florida Governor Ron DeSantis.

A big focus area for the new CEO is likely to be the recently announced round-the-clock news service called CNN Max, which will be available on Warner Bros Discovery's streaming platform.

CNN Max is looking to capitalize on the immediacy of breaking news and analysis, differentiating it from CNN+, which featured lifestyle programs.

PP Foresight analyst Paolo Pescatore said Warner Bros Discovery should not rule out a possible sale of CNN, given stiff competition in the industry and the trend of cord cutting.

Former CEO Licht had tried to lift CNN's ratings by attracting more Republican viewers and emphasizing straight news coverage.

He took the reins in 2022 from longtime chief Jeff Zucker, who resigned over his failure to disclose a consensual relationship with a colleague.

But Licht's efforts, including the Trump town hall, and a critical article in the Atlantic magazine sparked widespread employee backlash and contributed to his exit.

CNN's profit is expected to rise modestly this year to $938.6 million, according to data from S&P Global Market Intelligence. Those estimates are for the CNN networks that operate in the United States, including CNN en Español and CNN International.

During June, CNN's audience lagged behind Fox News and MSNBC in prime time and across the total day, according to data from Nielsen. (Reporting by Aditya Soni and Chavi Mehta in Bengaluru; Additional reporting by Helen Coster in New York; Editing by Shinjini Ganguli and Andy Sullivan)