Budget cuts loom for NBC Universal
Corporate parent Comcast will slash costs beyond 'The Tonight Show.'
When it comes to NBC Universal, Comcast (CMCSA) is not going to throw good money after bad.
The Philadelphia media giant has recently slashed the budget of "The Tonight Show," resulting in host Jay Leno's taking a "huge" pay cut to help save jobs on his staff. Leno, though, will still earn as much as $25 million, so there is no need to hold benefits in honor of the square-jawed comedian.
Though it is easy to denounce Comcast for its penny pinching, the Los Angeles Times makes a convincing case that it isn't the case. It is amazing that it took this long for Comcast to swing the budgetary axe.
"Unofficially, people close to the show say the cuts were enacted because Leno was still producing his late-night show with the budget he was given two years ago for his ill-fated move into prime time," according to the newspaper. "The network has also increased the amount of money it spends on entertainment programming" on expensive shows such as "Smash" and "Revolution."
Indeed, Comcast CEO Brian Roberts has shelled out $4.4 billion on a dubious bet in the Olympics through 2020 and billions more to secure the TV rights to the NFL since taking control of NBC Universal in 2011 from General Electric (GE).
NBC Universal had long been a drag on GE's earnings, and Comcast hasn't fared much better with it. During the last quarter, revenue was little changed at $5.5 billion, while NBC Universal's operating cash flow fell 15.4% to $982 million.
Figuring out where the budget ax may fall next is hard. But it's certain to drop. One vulnerable area may be Universal Studios, which, according to Box Office Mojo, ranks fourth in the box office this year, hurt by box office duds such as "Battleship" and "Tower Heist."
Two NBC franchises, "The Today Show" and "Meet the Press," are facing unprecedented pressure in the ratings. In July, viewership at rival "Good Morning America" had more viewers than "Today," both overall and in the key viewer demographic, for the first time in 17 years. Ratings at the venerable Sunday public affairs show recently hit a 20-year low.
The company's cable empire will be also be squeezed. Comcast owns an interest in the History Channel, home to huge hits such as "Pawn Stars" and "American Pickers." Other channels, however, such as USA are seeing declines. The scale of the viewership drop-offs has caught many by surprise.
Though the New York Daily News reported earlier this year that CNBC insiders were "freaking out" over the business channel's low ratings, the network isn't in a budget-cutting mode. Officials recently announced a slate of seven new shows in production. The network is expected to generate $751 million in revenue this year on cash flow of $443 million versus year-earlier estimates of $706 million and $417 million, according to SNL Kagan. CNBC has had six years of record "financial performance," according to a source.
Jonathan Berr does not own shares of the listed companies. Follow him on Twitter@jdberr.
I used to start my day every morning by watching Today....after they canned Ann Curry in such a crappy way, I vowed to never watch again....and yes, I now watch GMA. Also, it would be helpful to quit moving shows around....lose track of when your favorite is on and you end up just not watching it anymore. It's not brain surgery....simplify...
Well Comcast would sure do a lot better if they'd stop taking AWAY key channels from us peons with merely basic cable.
Used to watch that history channel they brag about ...NOW IT'S NOT THERE ANYMORE !
Because of the left leaning bias of NBC I did not watch any of the Olympics that they broadcast instead getting the results from the internet or rival networks. It is a shame that any major media has to sink so low to pander to a few politions that would take away the freedoms that we that served faithfully and with honor to perserve. Although my service encompassed the Viet Nam era, and I served 22 years, we are still treated as baby killers by some of the media moguls. My last tour in Viet Nam waters ended by our ship having to come into port after midnight to avoid the media enduced hysteria and yes NBC was at the forfront of spreading the hate for the servicemen............
I sure hope Jay Leno is going to be alright with just $25 mil to get by on.
What % of his income goes to charity? My guess it is less than goes to his car collection.
I sure don't see a great deal of criticicm about his income like I do with Mitt.
I agree with many of these comments; most Americans are sick of the media bias. Those investigating should be unbiased and report the TRUTH! Grow a pair and get your nose out of Obama's rear; it may earn NBC some respect and thus, more viewers. As for the Hollywood actors; I couldn't care less about their opinion on politics, make your movie and shut up!
And to the news outlets, I don't give a darn about Katie Holmes and Tom Cruise, the Kardashians, Lindsey Lohan or any other actor/performer; they are not newsworthy.
NBC and all the other networks, and all of Hollywood actually, have become platforms for the liberal agenda that, ironically enough, is being supported by us, the consumers of products from companies advertising on these networks and the movie goers who flock to the theaters. So, everybody, if you hate their guts and want them all to fail, you can help as well.
Edit.: It's just like certain cancers. One of the ways doctors try to treat them is to cut off nutrients to the cancerous cells so they die. Well, consider the liberal agenda as a cancer too and just $tarve it!
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