At its height, NBC was the very model of what a television network should be. With iconic programming, enviable ratings and spectacular business success, the peacock network delivered plenty of laughs along the way with “The Cosby Show,” “Seinfeld” and “Friends.”
Nobody is laughing anymore.
Today the network is in shambles, brought down not just by the challenges facing broadcast television — fragmenting audiences, an advertising downturn — but also by a series of executive missteps that have made its prime-time lineup a perennial loser and, most recently, turned its late night programming schedule into a media circus that threatens the lucrative “Tonight Show” franchise.
“We live in a society today that loves a soap opera,” Jeff Zucker, the chief executive of NBC Universal, said in an interview in his office at 30 Rockefeller Plaza in New York on Friday. “Three months ago it was David Letterman. Six weeks ago it was Tiger Woods’s problems. Today it’s NBC’s problems.”
And this is all happening as the company itself is in transition, waiting for regulators in Washington to approve a sale of NBC Universal from General Electric to Comcast, the nation’s largest cable operator. By the time G.E. finally decided to wash its hands of NBC late last year, the network ranked low on the list of those parts of the company most valuable to Comcast, which will swallow the network mainly so it can acquire the company’s money-making cable channels, like USA, Bravo, Syfy.
Indeed, even though NBC’s news division remains highly profitable, the network’s overall finances are crumbling — less than a decade ago, according to Bob Wright, the former chief executive of NBC Universal, the network generated over $1 billion in profit for its parent, G.E.
This year, mainly because of high costs associated with broadcasting next month’s Winter Olympics, the network is expected to lose more than $100 million, according to a person briefed on the network’s finances who insisted on anonymity. The company does not break out financial figures for the network. (In 2009, the network made a few hundred million dollars, and represented about 10 percent of NBC Universal’s operating profit.)
All of the networks are dealing with economic pressures, but NBC’s competitors have proved more deft at managing the challenges and creating hits, even as their profits have declined.
How did things go so wrong at NBC?
The network’s long fall from grace, particularly in prime time, culminated over the last decade. But most recently it has been visible in the public squabble over moving Jay Leno’s talk show out of the 10 p.m. weeknight slot, where he has foundered in the ratings, and back to 11:35 p.m. The move will effectively end Conan O’Brien’s seven-month stint as host of “The Tonight Show,” as he is refusing to go along with a move to 12:05 a.m.
The controversy kicked off days of public recriminations, with just about every comic with a talk show taking swipes at NBC, Mr. Leno, Mr. Zucker and everything else on the menu.
“Now they have a situation that — I’ve never seen anything like it,” said Fred Silverman, the only person who has overseen programming at three networks — NBC, CBS and ABC. “The hosts are sniping at NBC, and at Zucker, and they both are mad at each other. It’s a corporate embarrassment.” He called the idea of moving Mr. Leno back to 11:35 p.m. a “Mickey Mouse scheme.” (Mr. Silverman agreed with the original idea of moving Mr. Leno to 10 p.m.)
A Bet Backfires
At NBC, it has been an unseemly spectacle for a company that prides itself on a smooth corporate culture, and the disastrous culmination of a high-stakes gamble last year by Mr. Zucker to move Mr. Leno to the 10 p.m. slot, passing “The Tonight Show” to the younger Mr. O’Brien and saving money that the network would have spent on scripted dramas at 10 p.m.
But the ratings sank, and affiliates that relied on 10 p.m. to lead in to the late local news rebelled. And Mr. O’Brien’s “Tonight Show” did poorly in his time slot, losing resoundingly to “Late Show With David Letterman” on CBS for the first time in 15 years.
“At the end of the day Jay at 10 o’clock didn’t work,” Mr. Zucker said, “and I take responsibility for that.”
Mr. Zucker said that it was during a phone call in the first week of January from Jeff Gaspin, NBC Universal’s head of entertainment, that he learned that the network’s affiliates were threatening to pre-empt the Leno show. “It was becoming tough to deal with,” Mr. Zucker said. “The pressure from the affiliate body was strong.”
Mr. Gaspin’s idea was to move Mr. O’Brien’s show to 12:05 a.m., and give Mr. Leno a half-hour show at 11:35 p.m. “That’s what he wanted to do, and I said, O.K., give it a shot,” Mr. Zucker said. The shot exploded in their faces.
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