NBC slashes Jay Leno’s “Tonight Show” pay in half, but forks out more than $8 billion to renew its broadcast rights to Sunday Night Football.
Rumors swirl about a salary cut for Matt Lauer and Alec Baldwin tweets an offer to cut his salary, even as the network gambles on a $4.4 billion bid for the Olympics.
Is this any way to run a network that’s been stuck at No. 4 in the prime-time ratings for eight seasons?
Yes, according to observers, who say NBC is making the right moves by saving where it can and spending where it should under new owner Comcast Corp.
“I’m impressed they’re both taking all these creative shots and exercising financial discipline,” said Garth Ancier, a network veteran who helped launch Fox and was an entertainment chief at NBC.
Stephen Burke, Comcast vice president and NBCUniversal CEO, “knows where to spend money and where not to,” Mr. Ancier said.
But steps including Mr. Leno’s pay cut (to a still-enviable $15 million) and “Tonight Show” staff reductions raised eyebrows and this question: Is NBC returning to the choke-hold on costs that was in place under previous CEO Jeff Zucker, when viewership spiraled downward?
The ill-fated experiment of putting Mr. Leno at 10 p.m. instead of more costly drama series was one example of Mr. Zucker’s programming approach.
Barclays Capital analyst Anthony DiClemente cautions against a “cynical” reading of NBC’s position. Particularly in a TV universe fragmented by cable and satellite, “Management is looking to be as efficient as possible when they look at program expenses,” Mr. DiClemente said.
In fact, NBC under Bob Greenblatt, the entertainment chief who took over last year, the network has shown promising, if very early, signs of a ratings rebound. Using the Summer Olympics as a springboard for its fall lineup, NBC cracked the top 10 with the J.J. Abrams thriller “Revolution” and returning singing show “The Voice,” and scored with the Matthew Perry freshman comedy “Go On,” which landed in the top 20.
The network is shelling out big for dramas such as “Smash,” which reportedly cost $7.5 million to produce, and for premiere sports events and reality shows such as “The Voice” that invite live viewing to overcome ad skipping.
But the corporate wallet isn’t open wide for all.
Programs that are slipping in the ratings and those with ballooning budgets are at risk of the fiscal ax. A traditional place to start is with “talent,” the on-camera performers who may find their designer belts among the first to be tightened because they represent a hefty share of a show’s budget.
Mr. Leno falls in that camp and, according to one report, Mr. Lauer of “Today” might find himself there as well, although the show quickly denied that. Mr. Baldwin of “30 Rock” tried a pre-emptive move, offering to take a pay cut to keep the sitcom on the air.
Mr. Greenblatt, who declined to comment for this story, told The Wall Street Journal that the recent “Tonight Show” cuts were needed to restore the program’s budget to pre-2009, when Mr. Leno made a short-lived, costlier foray into prime-time competition.
Another key NBC franchise, “Today,” is finding itself on shaky ratings ground after 15 years at the top. Since the beginning of July, “Today” has lost each week in the ratings to “Good Morning America,” with the exception of the two weeks NBC was in London for the Olympics.
A continued downward slide could make NBC question the deal it gave Mr. Lauer earlier this year for a reported increase from $17 million to $25 million annually.
Mr. Baldwin’s offer to take a 20 percent reduction in his reported $15 million “30 Rock” salary, however, looks to be grounded more in the grand gesture than reality.
Never a ratings success, the Tina Fey comedy did bring NBC the prestige of Emmy Awards and enough viewers to warrant continued production to reach the threshold for lucrative syndication. NBC has declared this abbreviated seventh season to be the show’s last.
The ratings explain the decision. Last week’s debut was the lowest-ever for “30 Rock” with 3.5 million viewers, a number dwarfed by the more than 15 million watching the top-rated sitcom, “The Big Bang Theory” on CBS.
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