NBC Universal CEO Jeff Zucker gets a Cancellation Notice from Comcast

USA Today

 

NBC Universal CEO Jeff Zucker said today that he'll end his 24-year career at the television, movie, Internet, and theme park giant when Comcast takes control. That could happen by year end if the deal is cleared by federal officials.

Zucker, 45, told staffers in a memo that "it is clear to me that this is the right decision for me and for the company" because Comcast deserves "the chance to implement their own vision."

But he told The New York Times that his departure was involuntary. In a meeting two weeks ago, he said, Comcast COO Steve Burke "made it clear that they wanted to move on."

Earlier Zucker pooh-poohed persistant speculation that Comcast might put its own team in charge when the deal closes.

Although once considered a wunderkind in his years as a news producer , Zucker's reputation as a corporate executive suffered as NBC's prime time audience fell. The nadir for the highly image-conscious CEO came early this year when he took responsibility for the management debacle from his decision to turn one of NBC's most important franchises, The Tonight Show, over to comedian Conan O'Brien. Audiences didn't warm to the new host, or to a weeknight show featuring the former host Jay Leno. O'Brien left the network when NBC asked Leno to return to The Tonight Show.

But Zucker said that the real focus of the company had shifted to cable where networks including USA, SyFy, CNBC, and MSNBC are thriving. He also hoped to establish a strong foothold in digital media by championing Hulu, which NBC Universal launched in a partnership with News Corp.

NBC's New Schedule May Be Conan's Decision

NY Times

The future of NBC’s plan to shake up its late-night television lineup may depend on just how much Conan O’Brien doesn’t like what the network has done to him.

A day after NBC executives said they were contemplating a plan to move Jay Leno back to 11:35 p.m., elbowing Mr. O’Brien back a half-hour to 12:05 a.m., representatives of Mr. O’Brien’s are privately saying that he has not accepted NBC’s plan and that he is likely not to agree to it any time in the near future. But none were willing to say so publicly.

The uncertainty has created an extraordinary spectacle: Two of NBC’s biggest stars, with an aggregate salary of more than $50 million a year, and their staffs are waiting to see what might happen, with no official word being issued from the network or any of its executives.

A senior executive at a rival network said that if Mr. O’Brien and his representatives were willing to walk away from money he may still be owed by NBC, “they’ll have options.” The executive spoke on the condition of anonymity because he wanted to avoid becoming involved in NBC’s dealings with Mr. O’Brien.

One option seems to be emerging for Mr. O’Brien. On Friday the Fox network began sending signals that it may have a home for Mr. O’Brien, should he decide that he would rather opt out of his lucrative contract at NBC — which pays him in the range of $20 million yearly — for a shot at a show that does not relegate him indefinitely behind Mr. Leno.

“We’ve always been interested in late night and we’re always looking to bring great new talent to Fox,” said a Fox employee who demanded anonymity because network employees were not authorized to speak on the record about the issue. “While Conan would be a great fit for Fox, he’s still under contract with NBC, so we’ll just see how all of this plays out.”

Several news organizations published similar anonymous comments from Fox on Friday afternoon.

A senior Fox executive amplified the network’s interest by saying that a late-night show has always been at least loosely on the network’s agenda.

“We love Conan,” the executive said.

The move to redirect Mr. Leno from prime time, where his new show has struggled since September, back to late night was fueled by complaints from NBC’s affiliated stations that they were seeing diminished ratings for their 11 o’clock local newscasts as a result of low lead-in audiences each night in the 10 o’clock hour.

NBC’s problems with “The Jay Leno Show” have also affected the ratings of “The Tonight Show With Conan O’Brien.” Mr. O’Brien averaged 2.8 million viewers at 11:35 p.m. from June through December, according to Nielsen, 1.5 million of whom were ages 18 to 49. In the television season that ended the month before Mr. O’Brien’s start, Mr. Leno averaged 5 million viewers at 11:35 p.m., 1.8 million of whom were 18 to 49.

Executives from most of NBC’s bigger station partners (and the chairman of its affiliate board) did not return phone calls or e-mail messages on Friday. The effect of Mr. Leno’s ratings also trickled down to local stations in smaller cities like Charleston, W. Va., where the NBC affiliate has seen the audience for its 11 p.m. newscast cut fully in half in the past year.

Viewers “just didn’t accept Leno at 10 o’clock,” said Don Ray, the vice president and general manager of WSAZ in Charleston. With Mr. Leno as a weaker lead-in, WSAZ’s 11 p.m. news received a 3 rating among 18- to 49-year-olds last November, down from a 6 rating for the same month last year.

As a result, “we make, in that 11 p.m. time slot, 60 percent of the money we used to make,” Mr. Ray said.

He added that he was excited about the potential move. “It’ll be good to have Leno back following our news instead of leading into our news,” he said.

Misgivings about Mr. Leno’s show deepened in December when local affiliates received ratings books for November — a so-called sweeps month, when ad rates for the next quarter of the year are set.

“I know that several affiliates talked to” NBC after that information arrived, said one station manager who would speak only on the condition of anonymity.

NBC had heralded Mr. Leno’s 10 p.m. show as transformational because it could be produced for far less money than expensive dramas that had been in that. hour. In September Jeff Zucker, the NBC Universal chief executive, said at an investors’ conference that the network would give Mr. Leno plenty of time to find his footing.

“We’re going to judge this on 52 weeks,” Mr. Zucker said.

Mr. Leno has been on at 10 p.m. for 17 weeks.

On Friday Mr. Ray noted that NBC was moving swiftly to correct what he said he believed was a misstep. “You’ve got to credit NBC for acting in a timely fashion,” he said.

NBC’s prime-time plan for Mr. Leno never won over some top advertising executives. Shari Anne Brill, a senior vice president at the Carat media agency, said she “questioned the decision” when it was made because it reminded her of “the early days of TV” when low-cost variety-comedy shows filled the schedules of the fledgling networks.

“It always smacked of cost saving and managing for margins,” Ms. Brill said.

John Rash, senior vice president and director of media analysis at the Campbell Mithun agency in Minneapolis, said in an e-mail message, “With a new-program failure rate approaching 90 percent plus in some seasons, it’s not a shock that ‘The Jay Leno Show’ — which was an unprecedented upending of the way prime time is programmed in the first place — didn’t work.”

Looking ahead, Ms. Brill said, “for me the big mystery is what is the plan for 10.”

NBC has almost no programming on its shelves ready to fill the 10 p.m. hour, leading many to suggest that the network would turn to multiple episodes of its news magazine “Dateline” and would be likely to reschedule the drama “Law & Order: Special Victims Unit,” which had been a hit at 10 before being moved to 9 to make room for Mr. Leno.

Mr. Rash said “the blank canvas at 10” offered NBC “a challenge and opportunity to redefine its lineup.” If NBC can find the next generation of dramas, he said, “it stands a chance of bringing back viewers, and if it does, advertising investment will follow.”

Ms. Brill was less sanguine. “None of this is making sense to me,” she said, other than that Mr. Leno “does belong at 11:30.”

Referring to a character created by Johnny Carson, Mr. Leno’s predecessor on “The Tonight Show,” Ms. Brill said, “Only Carnac the Magnificent could make sense of this.”

Zucker Needs To Prove Himself To New Bosses From Comcast

Bloomberg

Jeffrey Zucker, NBC Universal’s chief executive officer, may have as few as nine months to prove himself to his new bosses at Comcast Corp. while the biggest U.S. cable operator seeks regulatory approvals.

Zucker, 44, will continue to run NBC Universal during a regulatory review period, executives of the Philadelphia-based company said yesterday on a conference call. The process to acquire control of the General Electric Co. unit may take nine to 12 months.

Profit at NBC Universal has slid 27 percent this year. Under Zucker’s watch, the company’s cable channels lifted results while the last-place NBC broadcast network sank lower in ratings. He moved talk-show host Jay Leno to prime-time, drawing scrutiny from analysts and industry executives who question whether he’s the best choice to lead NBC under Comcast.

“Wall Street will go insane if Zucker keeps his job,” Laura Martin, an analyst at Needham & Co. in Pasadena, California, said in an interview. “Wall Street views Jeff Zucker as value destructive. He has many excuses but few value- creating results.”

Zucker wasn’t available for an interview, according to a spokeswoman for New York-based NBC Universal.

Since Zucker became CEO in February 2007, NBC has fallen further behind rivals CBS, Fox and ABC in prime-time ratings. Zucker renewed Kevin Reilly’s contract in 2007 and replaced him shortly afterward with TV producer Ben Silverman as chief of NBC Entertainment. Silverman left in September of this year, after helping Zucker to engineer the Leno move from late-night.

Weather Channel

Zucker pared 500 jobs one year ago and consolidated operations to cut costs as advertising sales fell. He expanded NBC’s holdings by buying the Weather Channel for $3.5 billion with private-equity partners Bain Capital LLC and Blackstone Group LP. Fairfield, Connecticut-based GE reduced the value of NBC Universal’s stake in the Weather Channel in the third quarter, the parent company said in October.

Should the deal be approved, Zucker will report to Stephen Burke, Comcast’s chief operating officer, the cable company said yesterday in a statement.

Comcast, the largest U.S. cable-TV provider, yesterday agreed to form a $37 billion joint venture combining GE’s NBC Universal with its own media assets. Comcast will own 51 percent of the new entity.

Zucker “has helped lead other large acquisitions for NBC, successfully transforming their company,” Comcast CEO Brian Roberts said yesterday on a conference call. “We are looking forward to Jeff and his team doing the same here again.”

Regulatory approval may take 9 months to 12 months, Zucker told NBC employees in a memo.

‘Business as Usual’

“For now, it remains business as usual,” said Zucker, who has been named CEO of the new venture. “I expect this will be the case for the vast majority of you even after the deal closes.”

Comcast, which raised its dividend yesterday, rose 22 cents, or 1.4 percent, to $16.13 at 4:06 p.m. New York time today on the Nasdaq Stock Market. GE gained 20 cents to $16.20 and is unchanged this year on the New York Stock Exchange.

NBC, where ratings have dropped for seven straight seasons, hasn’t recovered from losing “Seinfeld” and other hit shows at the start of the decade. The network will be “fiscally prudent” when weighing a bid for broadcast rights to the 2014 Winter Olympics in Sochi, Russia, and the 2016 Summer Games in Rio de Janeiro, Zucker said today on CNBC. The Olympics are something the company would “like to stay in,” he said.

Zucker has “at least a couple of years” to right the broadcast network and bring it up to second or third place in the ratings, according to Don Seaman, head of TV research at MPG North America, a New York-based media buyer.

“NBC, their biggest issue right now is they have no identity,” Seaman said. “They just seem so adrift.”

‘Also-Ran’

When Zucker became NBC’s entertainment chief in 2000, the network was in second place in prime-time. In 2004, he was promoted to lead NBC Universal’s TV group, which also included cable properties.

“Part of me is surprised he keeps going and going and going,” said Seaman, whose company’s clients include McDonald’s Corp., Sears Holding Corp. and Carnival Corp. cruise lines. “NBC unfortunately has become that also-ran.”

The network hasn’t “done a very good job” of programming prime-time in the last several years and needs to do better, Zucker said last month at a conference at the Paley Center for Media in New York.

At the Universal Pictures film unit, U.S. and Canadian box- office sales have declined 16 percent year-to-date, according to researcher Box Office Mojo. At the same time, the industry is poised to set a record, surpassing $10 billion in sales, according to estimates from Hollywood.com Box-Office. The industry is grappling with a decline in DVD sales.

NBC Rise

In October, Zucker shuffled management at the film studio, naming Adam Fogelson chairman and Donna Langley co-chairman, replacing Marc Shmuger and David Linde.

Zucker, a Harvard graduate, started as a researcher for NBC Sports coverage of the 1988 Seoul Olympics. Later he landed at the “Today” show, which he would eventually run by the age of 26, and ascended to run NBC’s Los Angeles entertainment division in 2000. He became the network’s president two years later.

Bob Wright, Zucker’s predecessor who helped merge NBC and Vivendi SA’s Universal Studios, is credited with creating cable channels such as MSNBC and CNBC, and acquiring Telemundo and Bravo. NBC Universal’s third-quarter cable operating profit climbed 11 percent to $552 million as sales gained 8 percent to $1.2 billion, GE said Oct. 16.

It’s advantageous for Comcast to keep NBC Universal stable during the acquisition process, Wright said. He declined to comment on Zucker’s performance.

‘Getting the Deal Done’

“Right now the focus is on getting the deal done, and keeping management intact,” Wright said in an interview.

Firing Zucker could be costly. His employment contract runs through 2013, according to two people with knowledge of the agreement. They asked not to be named because terms aren’t public.

“Replacing Jeff Zucker would underscore to Wall Street that value creation is Comcast’s top priority,” Martin said. “NBC has gone to fourth from first and he should take the blame. He should get out of the way.”