NBCU’s TV Profit Driver
Jeff Gaspin’s Portfolio Bolsters Bottom Line
NBC Universal’s Jeff Gaspin, who in a former life created VH1’s landmark “Behind the Music” series, spends much of his time these days working behind the scenes.
As president and chief operating officer of the Universal Television Group, Mr. Gaspin has one of the broadest portfolios in television. He oversees some of the biggest brands in cable (USA, Bravo, Sci Fi), along with the Spanish-language Telemundo network, NBC’s syndication arm, the iVillage suite of Web properties and all of the parent company’s digital content.
And yet Mr. Gaspin generally seems content to let flashier, press-friendlier lieutenants such as USA chief Bonnie Hammer and Bravo boss Lauren Zalaznick soak up the spotlight whenever the media decide to focus on NBC U’s cable brands. They deserve the hype, Mr. Gaspin said, because for the most part, they’ve been making the day-to-day decisions that have resulted in so much success.
“If you’ve got talented, smart execs with track records, you have got to give them freedom. You’ve got to give them the ability to run their own businesses,” Mr. Gaspin said. “The role you have to play is very different. You have to be a supporter. You have to run interference. You have to let them do their day-to-day jobs, and you have to deal with the corporate responsibilities so they don’t have to.”
In other words, Ms. Hammer and Ms. Zalaznick get to have all the fun, while Mr. Gaspin takes care of the more “boring” stuff. Like counting the $2 billion in operating profits his division brought in last year, a sum that neatly summarizes why NBC Universal Chief Executive Officer Jeff Zucker is so fond of calling the Peacock a cable-driven company every chance he gets.
“We’re going to have our best first quarter ever—ratings, profits, everything,” Mr. Gaspin said, referring to the cable portion of his empire. “Season-to-date, cable as a group is up 6%; we’re up 12%. … If these channels weren’t as successful as they are, I’d have to get involved more. But I’d be stupid if I spent my time telling them what they’re doing wrong, because they’re not doing much wrong.
“I’ve always been a little camera-shy,” Mr. Gaspin added. “Bonnie and Lauren clearly have not, and we love them for that. It just seems to work.”
Mr. Zucker said his deputy doesn’t seek the spotlight and is pretty unassuming.
"I think that's one of the reasons he has succeeded," Mr. Zucker said. "He doesn’t want to take the spotlight from anyone else, and gladly allows others to shine. We've known each other a long time, and I have great confidence in Jeff."
Mr. Zucker added that he has sleeps better knowing Gaspin is overseeing such a huge part of the company.
"Jeff is a teriffic manager who gives his teams great autonomy but is always there when they need him," Mr. Zucker said. "He's been a tremendous thought partner for me and has a great strategic mind. As the industry changes so fast, Jeff has really spent a great deal of time thinking through the new paradigms. He has a rare combination of creative instincts and great strategic acumen."
Ms. Zalaznick said she appreciates the low-key role her boss plays.
“Jeff takes on internal and external constituents and sorts through a tremendous number of business issues, filtering relevant information as needed so that I can better focus on managing (my) portfolio to its maximum value,” she said, calling Mr. Gaspin “patient, supportive and happy to use his vast TV experiences to help me and my team strategize around any challenge of the moment.”
Mr. Gaspin’s general bullishness on his business hasn’t been shaken by the economic crisis battering so much of the country right now. Even as some companies put the brakes on expansion and look to trim costs wherever possible, Mr. Gaspin doesn’t believe now is the time to slow down—even when it comes expensive first-run scripted programming on USA and Sci Fi.
“Of course the economy is making us think about all of our decisions,” he said. “But when you see the momentum we have, we don’t want to do anything to slow it down. We are very protective of our programming and marketing spends. It’s the last place we want to take money away from.”
Mr. Gaspin said his units have made “some minor tweaks,” perhaps shifting a show from one quarter to another. “But we have not cut back spending on shows,” he said.
Where the economy has slowed momentum a bit has been in the area of acquisitions.
Mr. Gaspin was hands-on with NBC Universal’s successful purchase of Oxygen, a move that already is yielding dividends via double-digit ratings growth. Under normal circumstances, NBC Universal might be ready to gobble up another property, but the tough times make that unlikely right now, Mr. Gaspin said.
“We’ll continue to look at opportunities, but I’m less convinced that if we see an opportunity we like we’d be able to act on it,” he said. “The valuations are not proper right now. … Credit is very tight.”
That said, looking ahead three to five years, “I think our goal is to continue to strengthen the portfolio, whether through organic, internal growth or through acquisitions.”
Shorter-term, Mr. Gaspin thinks NBC Universal—and all of cable—will do OK in the next big test of the economy’s impact on the business: the upfront advertising market in May.
“My guess is it will be a somewhat challenged marketplace,” Mr. Gaspin conceded. “But I think top-tier cable will do well. And I think even within top-tier cable, I would argue we’re top of tier. So I think we will do better than cable’s average, and we will do better than broadcast, as we did last year.”
While NBC’s cable properties continue to vastly outperform the company’s broadcast holdings, you’d never know it based on most press coverage. While cable collectively now attracts the majority of all TV viewing, the broadcast business—and high-profile executives such as Mr. Gaspin’s NBC Universal colleague Ben Silverman—are still seen as sexier and more relevant.
Mr. Gaspin isn’t complaining, however.
Under the Radar
“When I went from NBC the first time to VH1, I loved being in cable because you could play under the wire,” Mr. Gaspin said. “You could make mistakes and people didn’t report on it. In broadcast, every mistake you make is shouted through a megaphone. That’s still somewhat true.”
That said, Mr. Gaspin said, “The perception that broadcast is more glamorous is clearly changing” as cable networks continue to expand their high-quality scripted offerings.
“There’s no reason broadcast should get any more attention than cable,” he said. “But the momentum in the media is to cover broadcasters … because it’s frankly easier. You have five broadcast networks as opposed to 100 cable nets.”
Mr. Gaspin does see some danger ahead for cable networks as they compete aggressively with broadcasters for buzz and ad dollars. Specifically, he warns against cable networks expanding their scripted slates too quickly.
Take Your Time
“Don’t try to throw it all on at once,” he advised. “What USA and other cable networks have done effectively is find their target audience, and then, slowly and steadily, build original programming content.”
Mr. Gaspin said he doesn’t understand the logic behind rival TNT’s recent rapid expansion.
“TNT is trying to become the hare,” he said. “They’re racing to compare themselves to broadcast. I don’t know why you would want to compare yourself to broadcast. What Turner will find and other networks will find is that if you try to do what broadcasters do, you’re going to have a limited hit-to-pilot ratio.”
Mr. Gaspin’s relatively hands-off role when it comes to programming is a big contrast to his day-to-day life just a few years ago.
When he came to NBC in 2001, following a monstrously successful five-year run at VH1, Mr. Gaspin was key in helping the network get into the unscripted game in the wake of reality’s post-”Survivor” explosion. He helped develop blockbusters such as “The Apprentice,” “Fear Factor” and “The Biggest Loser.”
By the end of 2002, Mr. Zucker was ready to entrust Mr. Gaspin with the company’s newest asset: Bravo. With hits such as “Queer Eye for the Straight Guy” and “Project Runway,” Mr. Gaspin helped transform the network from a sleepy arts channel into a pop culture powerhouse.
Mr. Gaspin still gets to use his creative muscles a bit when it comes to Telemundo, where he’s been actively involved in advising the network’s executive team on marketing and branding issues.
He’s also been boning up on finance matters via his role in NBC Universal’s divestiture of its stake in the Sundance Channel and its purchase of Oxygen.
“I’ve been going to school a little bit on the things I don’t know in order to balance out my areas of expertise,” he said.
Does he miss the days of diving into a script or a pitch for a reality show?
“Absolutely,” Mr. Gaspin said. “I enjoy the creative. But I’m also very satisfied knowing I contribute half the profits to this company. And having an acquisition that was worth close to $1 billion happen on your watch is exciting. Having hit shows on your watch is exciting. Watching brands thrive, watching people thrive is exciting.
“Some people like to be front and center, and some people like to do the work and have the satisfaction from performance,” he said. “And I guess I’m the latter.”