NBC and Vivendi Execs Finding Common Ground

Sep 8, 2003  •  Post A Comment

Since the NBC/Vivendi deal was announced, there has been a lot of speculation about a clash of cultures between NBC parent General Electric’s way of doing business and the more freewheeling Hollywood style.

However, when NBC executives met last week in Los Angeles with Vivendi Universal Entertainment President Ron Meyer, Universal Studios Chairwoman Stacey Snider and others to discuss the proposed merger of NBC and VUE, both teams discovered they had a lot more in common than they thought.

“Their process for greenlighting movies is close to the processes of [NBC parent General Electric] and Six Sigma,” the statistics-based management protocol that GE uses for everything from running businesses to testing the accuracy of forecasts, said Randy Falco, president of NBC Television Network. “At every step of the way, the team gets together to decide whether to move forward. What they call “greenlighting” is very akin to Six Sigma. They already do it, and it is a wonderful way to spread and manage risk.”

The realization that Universal approaches its decisions to bankroll a film project much in the same way that GE chooses whether or not to build a certain kind of aircraft engine should quell some worry in the entertainment industry that GE’s process-oriented approach to running businesses will get in the way of creativity at the VUE operations.

Indeed, Mr. Falco said as much: “I have been here 28 years and was here in 1985 when GE acquired NBC,” he said. “That NBC has been No. 1 for 12 out of the last 17 years speaks to the GE philosophy that its process-oriented nature won’t get in the way of creativity. That’s silly nonsense.”

That could be good news to VUE’s work force as small clues begin to emerge about what the executive suite of the proposed NBC Universal could look like once the merger is completed in a few weeks.

Though NBC’s management declines to name names or reveal how the new company’s organizational chart will look, pointing out that it is way too early to discuss specifics, it is clear that NBC’s management will have key roles in areas where NBC and Vivendi Universal Entertainment have duplicative operations.

That is hardly surprising, given that NBC Chairman and CEO Robert Wright will run the new company. But Mr. Falco last week mentioned a handful of NBC executives whom he sees as having roles that could expand, not shrink, following the NBC-VUE merger.

“We like to manage in a cross-integrated way,” Mr. Falco said. “We really don’t want to have silos, in which people are living and operating and working in silos.” That means that the new company’s sales effort is likely to be run by Keith Turner, president of sales and marketing at NBC Television Network, while promotion will probably be handled by John Miller, president of The NBC Agency, and production and programming efforts would fall under NBC Entertainment President Jeff Zucker, he said.

Universal Television’s syndication is also likely to be run by an NBC executive, with NBC Enterprises President Ed Wilson seen as the one to run a newly combined syndication operation, sources said. It’s unclear how Steve Rosenberg, president of Universal Domestic Television and co-president of Universal Television Distribution, will fit into the equation, although he recently renewed his deal with the studio.

Such an organizational chart could mean several VUE executives are vulnerable, said people familiar with both organizations. That could include Michael Jackson, chairman of Universal Television Group; David Goldhill, president and chief operating officer of UTG; and Belinda Menendez, co-president of Universal Television Distribution.

Universal Television Productions President David Kissinger’s future is not clear. Mr. Kissinger runs the division that produces the “Law & Order” franchise with Dick Wolf. NBC and Universal’s renewal discussions about the drama series have been on hold since the bidding for Vivendi’s U.S. entertainment assets got under way.

Mr. Meyer and Ms. Snider are considered safe by most observers, given their success at the studio and NBC’s inexperience at managing a film studio. Furthermore, both have received public support from NBC brass.

Officials at VUE declined to comment, as did NBC executives.

Some sources have said NBC could face some significant risks if it relies solely on its in-house talent, particularly as it marries VUE’s and NBC’s cable and syndication operations.

“They’ve got Bravo and CNBC,” said one person close to VUE. “The USA Network is a bigger animal. Plus, VUE has nine international channels, whereas NBC has none. Just as Universal couldn’t come in and run a broadcast network, they can’t expect to easily run these cable properties.”

David Zaslov, president of NBC Cable, points out that NBC, as the No. 1-rated broadcast network for several years running, is well acquainted with adjusting to suit the times and remains undaunted by the opportunity to fold VUE’s cable properties-which include USA Network, Sci Fi and Trio-with NBC’s cable channels. He points to the ratings success of its Bravo cable channel and the cross-promotion that has taken place with edited versions of Bravo’s “Queer Eye for the Straight Guy” running on NBC as an example.

“We’ve been able to change with the times. Those skills are going to be put to use to enhance Sci Fi and USA,” he said. “These channels have strong brands and really meaningful niches. This presents an opportunity to build on that.”

A veteran syndication executive also noted that NBC Enterprises, the network’s 3-year-old syndication arm, has largely been seen as a boutique compared with Universal’s larger operation. NBC scripted series are distributed internationally by MGM and domestically by NBC Enterprises. “NBC Entertainment is Jane Pauley; Universal is Jerry Springer,” he said.

However, another syndication executive noted that Mr. Wilson will easily make the transition to running a much larger business, having run bigger operations such as CBS’s Eyemark.

“Ed hasn’t had a very strong library [at NBC],” the executive said. “This deal takes their syndication unit from being a small player to being a very big player overnight.”