NBC's Recent Financial Moves -- Including New Cuts and New Spending -- Show a Network Reshaping Its Priorities AP
NBC’s recent fiscal moves -- including slashing Jay Leno’s salary for “Tonight” in half while shelling out more than $8 billion to re-up with “Sunday Night Football” -- reveal a network shifting its priorities, the AP reports. But the moves may be just what the network needs.
“Rumors swirl about a salary cut for Matt Lauer and Alec Baldwin tweets an offer to cut his salary, even as the network gambles on a $4.4 billion bid for the Olympics,” the story reports. “Is this any way to run a network that's been stuck at No. 4 in the prime-time ratings for eight seasons?
“Yes, according to observers, who say NBC is making the right moves by saving where it can and spending where it should under new owner Comcast Corp.”
Said media veteran Garth Ancier, a former entertainment chief at NBC: "I'm impressed they're both taking all these creative shots and exercising financial discipline.”
Ancier added that Stephen Burke, Comcast vice president and NBCUniversal CEO, "knows where to spend money and where not to," the piece reports.
The report adds: “But steps including Leno's pay cut (to a still-enviable $15 million) and ‘Tonight’ staff reductions raised eyebrows and this question: Is NBC returning to the chokehold on costs that was in place under previous CEO Jeff Zucker, when viewership spiraled downward?
The report cites the disastrous move of “Tonight” to 10 p.m. -- as a cheaper alternative to drama series -- as an example of the Zucker approach.
The piece notes: “Barclays Capital analyst Anthony DiClemente cautions against a ‘cynical’ reading of NBC's position. Particularly in a TV universe fragmented by cable and satellite, ‘management is looking to be as efficient as possible when they look at program expenses,’ DiClemente said.”
DiClemente adds: "NBC has made a really impressive recovery from the last-place broadcast network to having a fall schedule that put them in first place" during week one of the fall season. NBC continued to lead during week two in the key 18-49 demo, while falling to No. 2 in total viewers.
The piece adds: “Burke, in charge of NBCUniversal since cable TV giant Comcast's 2011 takeover, told a conference call with analysts last month that NBC, which he said is averaging $1 billion less in operating profits annually than the other major broadcasters, ABC, CBS and Fox, is his top priority for the coming year among properties that include cable channels, the Universal Pictures movie studio and theme parks.”
Said Burke: "There's really no reason for that (competitive difference), other than we need to make better shows, we need to schedule them better, we need to rebuild NBC brick-by-brick, which is the process we're going through right now."