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May 27, 2005
More Than Pain For NBC
A May 26, story in the Arts section of the New York Times by Bill Carter titled "Triumph For Fox, But Pain For NBC" noted that Fox had won the 18-49 ratings battle for the network TV season and that NBC had come in fourth, a big comedown from being first last year.
In same issue, in the Business Day section, a story by Jacques Steinberg was titled “NBC News May Get New Chief” and noted that NBC News president Neal Shapiro “Has told his superiors at the network in recent days that he would like to leave his post, two senior executives at NBC Universal said yesterday.” Mmmm. Interesting coincidence.
It’s not really a coincidence if you remember that NBC Universal is owned by GE, that GE’s CEO, Jeff Immelt, was Jack Welsh’s hand-picked successor, and that Immelt has kept in place many of Welsh’s hard-nosed management principles, as detailed in Welsh’s excellent management book, Winning. One of Welsh’s principles was to be number one or number two “in every market—fixing, selling, or closing every underperforming business that couldn’t get there.” Another one of Welsh’s principles was the 20/70/10 rule about people. Promote and pay well the top 20 percent, try to keep the 70 percent in the middle happy and motivated, and move out the bottom ten percent.
Several weeks ago Jeff Zucker, president of the NBC Universal television group, moved out the producer of the ratings-challenged “Today” show and installed a new producer. Zucker, who used to be the producer of “Today,” even went back to the producer’s chair (actually looked over the shoulder of the new producer) for a week to let everyone know that he was still involved and interested. Zucker was credited in accounts in the press for making the change in producers even though “Today” was the responsibility of NBC News’s Neal Shapiro. That probably gave Shapiro the not-too-subtle hint that he was considered one of the dreaded lower ten percent group.
So, in line with GE’s philosophy of being number one or number two in every market and fixing, selling, or closing businesses that under perform, we can expect GE to “fix” NBC (GE won’t sell it and certainly won't close it). In the GE system, someone has to be held accountable for the disastrous slide from number one to number four in the ratings, the worst drop in modern TV network ratings and one that will probably cost NBC close to half a billion dollars in the upfront market that is currently in full swing.
So why has GE allowed NBC to keep MSNBC alive when it isn't even close to being number one or number two? Also, expect more people than Neal Shapiro to be moved out, especially after NBC got blasted in the trade press for a terrible performance in the upfront presentations of next year's prime time programming. Could Jeff Zucker feel the pain, too?
Posted by Charles Warner at May 27, 2005 2:17 PM