Can Ben Silverman Restore Luster To NBC?Fourth-place network bets on young Hollywood Turk to helm turnaround 6/01/2007 08:00:00 PM Eastern
On a sunny morning in a meeting room at NBC's New York offices, just before its upfront presentation, network brass assured reporters squeezed around a conference table that this was not a repeat performance.
Unlike one year ago, when NBC completely reworked its schedule just weeks after unveiling it at Radio City Music Hall, they did not expect to make any seismic changes this time around.
Twenty-two days later, they fired the architect of the new schedule, Entertainment President Kevin Reilly, and hired hot Hollywood producer, Ben Silverman, as co-chairman.
Now it falls to Silverman, a highly-regarded packager but an unproven corporate executive, to restore luster to the once-proud Peacock network. While the hire shocked many, even inside NBC, many laud the fourth-place network for taking a chance on an unconventional thinker who may be better able to navigate the roiling seas of network television.
Indeed, NBC's audacious late-hour move may signal a new era when big media companies are forced to staff up with a new breed of TV executives who can embrace the unconventional financial models that may be the future of the TV business.
Silverman comes to NBC Universal with huge pressure to perform, given that its television business is already a couple of years into a rebuilding phase. The patience of General Electric brass and their stockholders is being tested by a division that many consider to be a drag on its stock price despite its high profile and growth potential.
“The entertainment division is a huge perceptual issue and something we have to get fixed,” says NBCU President/CEO Jeff Zucker.
The decision to install Silverman stemmed from a meeting the two had in Zucker's New York office during upfront week to discuss matters pertaining to the current first-look deal between NBCU and Silverman's company, Reveille. During that meeting, Silverman told Zucker he was contemplating a career move. Zucker jumped at the chance to snatch him up.
Zucker says he was not planning on replacing Reilly at the time. Asked in a phone interview what would have happened to Reilly if he and Silverman hadn't had that meeting, Zucker responded, “Then you and I aren't talking right now.”
NOT A TOTAL SHOCK
While the timing of the move left many industry insiders scratching their heads—especially after Reilly had just signed a new three-year deal valued at several million dollars—the programming chief's departure was not a total shock.
After NBC's ratings hit record lows this spring, its May 25 upfront presentation in New York did little to signal a significant turnaround. A reliance on adding episodes of current shows, not introducing a single new comedy, and ads touting Jerry Seinfeld for his upcoming DreamWorks movie left many ad execs wondering what was being said about the network's development.
Still, many industry executives believe that Reilly was never given the autonomy or financial backing to do his best work. His supporters note that he was forced to operate amidst drastic budget cuts under the “NBC 2.0” umbrella, which targeted 700 jobs and $750 million in cuts.
Reilly was also limited in the number of pilots he bought, as well as from where he bought them. For example, he ordered far fewer pilots than the other major networks despite NBC's fourth-place status and bought comedies only from NBC's own studio.
Reilly declined to comment.
Many in Hollywood, including ABC Entertainment President Steve McPherson, a close friend, says Reilly was unfairly fired. “The treatment he has gotten has been disgusting,” McPherson says of Reilly's time at NBCU, a period that produced such hits as Heroes and The Office. “He brought back quality, class and success over there and put his balls on the line better than anyone in the business, myself included. I don't know what more you can ask for.”
McPherson says Reilly is taking the blame for problems that went beyond his control. “Is there a limit on scapegoats?” he asks. “To do these jobs effectively, you have to be given the support and control for good or bad. It certainly never appeared he got that.”
NBC executives declined to respond to McPherson's comments, but they expressed confidence that Silverman is the right leader to pull the network out of its quagmire.
“The only message we are trying to send here is, we're not satisfied with the position we are in and we need to do better,” Zucker says. “Ben is an incredibly accomplished producer and developer and executive who thinks globally and thinks about advertisers and digital and content in relation to all of it, and that's what we have to be about as a company.”
Many ad executives are excited about Silverman's understanding of their needs, such as the value of branded integration dating back to his The Restaurant, which was completely financed by advertisers.
Even in the short term, the change won't harm the network's upfront sales prospects, say some, because fourth-place NBC was never in a position to lead the upfront market anyway. “It's a continuation of NBC's issues over the past three years,” says one ad buyer.
And producers, especially those who are heavily involved in branded integration, are eager to work with Silverman. “Both Hollywood and Madison Avenue tend to cheer for Ben's successes,” says Madison Road Entertainment Managing Partner Jak Severson. “He genuinely wants to create new models and gets the business as well as the creative side of the new Hollywood.”
A major question surrounding the affable Silverman is whether he can parlay his prominence as a packager, producer and idea man into success in GE's legendary corporate environment. “I was very clear to them about what I am and who I am as a creative entrepreneur,” says Silverman, who oversaw 32 full-time employees at Reveille. “I may not be the traditional GE guy, but I don't know a lot of creative guys who would fit into any corporate structure.”
To ease that shortcoming, Zucker will place the high-energy Silverman side by side with newly promoted Co-Chairman Marc Graboff, the more business-oriented former president of NBC Universal Television, West Coast.
Silverman also says he will be aided by a familiarity with NBC's practices: “Luckily, I have worked alongside it in a number of ways since Reveille shares a lot of the same policies and structures around our productions.”
Among his first tasks will be putting together his executive team, which will include a new head of creative at the studio. Current studio chief Angela Bromstad is expected to remain with the organization, most likely focusing on the international production side of the business should she accept a role in London.
Reilly's former number two, Katherine Pope, is also expected to stay. She had become frustrated after learning that NBCU was not going to merge its network and studio, a strategy toward which it had been leaning. Pope was in line to assume a larger role in that shift. Zucker maintains she will remain with the company. With two years left on her deal, she is a candidate to head the studio.
Silverman may also bring some of his former charges from Reveille, with speculation already surfacing about a prominent role at NBC for respected development executive Teri Weinberg.
NBC executives are betting that Silverman will be much more than a programmer and hope he can infuse the network with new financial strategies. “Ben has always been about thinking about new models,” Zucker says. “And given the world of network primetime television, whether you're in first place or fourth place, these times call for new and different models.”
“THE RIGHT STEPS”
While Silverman won't have much immediate impact on the fall schedule this late in the cycle—he hadn't even seen all of NBC's pilots as of late last week—he does grant NBC a fresh helping of goodwill, on both Madison Avenue and Wall Street.
“They're making the right steps and tweaking the formula at NBC to get them back on track,” says Richard Steinberg, president of Steinberg Global Asset Management, which counts GE among the largest holdings in its $500 million portfolio. “NBC, in the short run, has fallen from its star status, but that doesn't mean the machine is broken. It needs repair and new leadership, and that's what management has done.”
Despite the positive response to Zucker's latest attempt to turn the slumping television business around, there are still GE stockholders who would like to see the company spin off or sell NBCU. Indeed, as that business looks to reverse its fortunes, speculation abounds that potential suitors are biding their time. The suspects include cash-rich cable operator Comcast, private equity firms, IAC's Barry Diller and one of IAC's largest investors and allies, Liberty Media boss John Malone, either alone or together.
By acquiring NBCU, Liberty would instantly become an entertainment giant on par with News Corp. in scope, with Liberty's DirecTV, Starz/Encore pay channels and majority stake in the Discovery networks joining NBCU's broadcast and cable properties.
BULL'S-EYE ON HIS BACK
But few expect a spinoff or sale soon. People familiar with the company say GE wants to stay in the media business and believes it can right the ship. Additionally, insiders say NBC is integral to the GE corporate culture, fromits equipment division's taking railroad people to NBC's box at Notre Dame games to providing Wimbledon tickets to key clients. They say a transaction would have to be so financially compelling that it would leave GE little choice.
“Even as much as we would like to see NBC a separate operating unit, we don't see it in the cards from GE right now,” says Steinberg. “We do not think that [GE Chairman/CEO] Jeff Immelt, in the near term at least, has any interest in spinning off, divesting or otherwise changing the corporate structure of NBCU from how it's currently structured. As much as people are rattling sabers over wanting this done, we think it's falling on deaf ears.”
While critics say the shakeup is another example of Zucker's deflecting blame for NBC's woes, many insiders give him credit for taking an aggressive stance to fix the schedule—and the business.
Now it's up to his star player, Silverman, to show the confidence that earned him a reputation as a great salesman.
“The bull's-eye is on my back, and I'm prepared to live with it,” says Silverman. “I had zits and braces and was six-two and 130 pounds in high school. I can handle it.”
Additional reporting by Jim Benson, Anne Becker and Marisa Guthrie