Budget cuts loom for NBC Universal

Corporate parent Comcast will slash costs beyond 'The Tonight Show.'

By Jonathan Berr Aug 21, 2012 9:52AM

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.

Aug 21, 2012 1:59PM
NBC does not have a clue how the working person views the current government. They operate in their small NY cliques circles much like the politicians in Washington and completely out of touch with the rest of America. The arrogance of both groups is beyond comprehension
Aug 21, 2012 1:25PM
NBC needs to take another look at cutting saleries on the TODAY Show!  It's a joke!
Aug 21, 2012 2:14PM
Take a look at the overpaid Today's arrogant host -good place to start cost cutting
Aug 21, 2012 3:37PM

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.

Aug 21, 2012 1:45PM
I haven't watched the Tonight Show since Johnny Carson retired, and there is nothing decent to watch on NBC anyway.
Aug 21, 2012 1:47PM
Honestly, I hope anything related to Comcast goes up in flames, those folks are bastards.
Aug 21, 2012 1:27PM

MSNBC has been a losing operation for years, I wonder how much longer it’ll be before that entire channel is done away with.

Aug 21, 2012 1:52PM
NBC needs to look at The Today show with its lavish sets and liberal format. Its why news channels like Fox are growing and slowing eroding NBC ABC and CBS 
Aug 21, 2012 3:51PM

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............

NUff said...........





Aug 21, 2012 3:47PM
Get rid of the NBC news staff.  They provide nothing but useless, Socialists commentary.
Aug 21, 2012 1:25PM
NBC needs to take another look at cutting saleries on the TODAY Show!  It's a joke!
Aug 21, 2012 2:55PM
If MSNBC, NBC & CNBC went dark who would notice, hell who would care???
Aug 21, 2012 2:41PM
Bye Bye, leftist network television. You are a thing of the past.
Aug 21, 2012 2:08PM
If NBC wanted to be a real news source they should fire everyone, and do a real life documentary on the life of an unemployed company. I might return to NBC to watch that special show.Other than that, I don't need them and frankly don't even know what companies advertise on the network because I don't watch NBC. I won't support them at all. 
Aug 21, 2012 3:06PM
NBC has three of the most arrogant and egotistical morons in the business in Bob Costas, Brian Williams and Matt Lauer. Obama had to tell Williams to walk next to him rather than behind because he was getting a severe **** pain each time he stopped short. 
Aug 21, 2012 4:20PM
While many others have suggested the right way to save on $$$ at NBC, I have decided that Matt Lauer is the most expensive for the few brains given to the viewers.  His whims have dominated "Today" and its staff for too many years.  His wife should have carried through with her divorce threats years ago.  Matt Lauer is very narsisistic and too many people have worshipped at his designer shoes.  Al Roker's remark the other day was well done in that the Today show gets rid of people by throwing them under the bus.  The good shows are on CBS and if you want real news, go to FOX.
Aug 21, 2012 4:39PM
The American people have grown weary with the biased major networks. Their delivery over the years was not to inform or entertain but to bend minds in a manner not unlike the processed used by the Soviet press agencies. The viewership has declined dramatically and, like typical control-freaks,  they would rather go out of business than deliver objective material that would please the general public. 
Aug 21, 2012 5:41PM
Get rid of matt Lauer- that will save them a bundle!
Aug 21, 2012 3:28PM
I like NBC, but I do not like what they have done with the Weather Channel.  I have watched the Weather Channel since its inception and NBC has made it the Video Channel.  I use to watch the Weather Channel for WEATHER!!!
Aug 21, 2012 4:20PM

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...

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