NBC Universal TV: Syndication Merger a Clash of Cultures

May 30, 2005  •  Post A Comment

Combining NBC’s relatively nascent syndication operation with Universal’s prolific syndication arm was among the most challenging integrations NBC encountered after acquiring Vivendi-Universal’s U.S. entertainment assets last year.

The move meant putting together two companies whose corporate cultures, creative strengths and station group clients were known to be vastly different.

NBC Enterprises, which was formed in 2001, produced shows tailored to the needs and sensibilities of the company’s owned-and-operated stations with product fronted by NBC news talent Jane Pauley and Chris Matthews. On the other hand, Universal Domestic Television-which was sold by parent company Universal in late 1997 to Barry Diller and renamed USA Studios, then was sold back to Vivendi-Universal in 2001-made a name as a supplier for the independent stations and for shows such as “Maury,” the often outrageous “Jerry Springer” and “Blind Date,” hosted by Roger Lodge.

“You used to be able to say, ‘OK, we’re Jane Pauley or we’re Martha Stewart, and we’re not Jerry Springer,” Bill Carroll, VP and director of programming, Katz Media TV, said. “But now they have to say they are all things. Those are very different constituencies.”

But in the year since NBC Enterprises and Universal Domestic Television became one, the strategy, style and programming to emerge out of the new company are distinctly NBC’s.

Frederick Huntsberry, executive VP of NBC Universal Television Distribution, said he values the relationship created by Universal with the Tribune station group, which airs “Maury” and “Springer.” But he said, “We do not see ourselves as just a complete independent producer in the company,” because the division “cannot have a situation where a show makes money for us but potentially breaks even or loses money for the O&Os.”

As part of the merger, both NBC Enterprises President Ed Wilson and Universal Domestic Television President Steve Rosenberg left the company, while former NBC sales executive Barry Wallach got the top job. Mr. Wallach reports to Mr. Huntsberry, a former Vivendi Universal executive VP and chief financial officer who previously worked for NBC parent GE.

NBC Enterprises’ 50 employees merged with the more than 200 Universal staffers to create a company with a staff that now numbers about 180 people. Mr. Huntsberry called the integration process “quick,” and said, “By June of last year we were done.” He said one of his steps was to open a dialogue with the NBC stations.

“We should develop together, understand what their needs are and use that as a springboard to the rest of the country,” he said.

An overall strategy that encompasses myriad NBC Universal companies is something new for both NBC and Universal. NBC’s past agreements with the Gannett and Hearst-Argyle station groups led to programming developed in partnership with major NBC affiliates. While the syndication division continues to be open to producing for stations not aligned with NBC, the priority now is serving the interests of the NBC O&Os and NBC Universal’s overall bottom line.

Going forward, NBC Universal Television Distribution shows that air on the NBC-owned stations will be analyzed from an overall company standpoint. If, for example, a show works for the syndicator but would represent a bad deal for the stations, the syndicator likely won’t do it.

The goal is for syndicated shows to be win-win for the studio and the stations. The company has been using its newsmagazine “Access Hollywood,” which NBCU syndicates and the O&Os air, as a model for future shows. While “Access” makes more money for the NBC-owned stations than it does for the studio, it is a true win-win for both divisions and is solidly in the black for the company overall.

Though Martha Stewart and Jerry Springer may seem incompatible brands, Mr. Carroll pointed out there is an ad sales opportunity to supplying both. The company can now offer advertisers access to a wider range of shows than would have been available at the former NBC or Universal syndicated divisions.

“From a sales perspective, you have a much broader demo you’ll be able to reach,” he said. “You’ve got Chris Matthews and Maury Povich.”

Mr. Huntsberry said the company is open to developing new product for the larger marketplace, but added, “It’s going to be on an opportunistic basis, as opposed to planning for that each year.”

For Mr. Carroll, that strategy makes sense for NBC Universal, but a move away from supplying what many consider lower-brow but still profitable syndicated fare will have an industry impact. “There are things that don’t meet the immediate needs of the NBC O&Os that could still service the marketplace,” he said. “It is always concerning when the focus becomes even more narrow.”