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No lack of purpose

New NBC boss focuses on restructuring, growing cable—and keeping Katie 5/20/2001 08:00:00 PM Eastern

The newsies have taken over NBC, led by Andrew Lack, newly named president and chief operating officer. Lack has spent just about his entire career in news, the past eight years as head of NBC News. Longtime Today executive producer Jeff Zucker is running the Entertainment division, and Neal Shapiro, who turned Dateline into a multi-night prime time franchise, now runs News. Lack, 53, says the first order of business is to integrate the network so that its various divisions communicate better. One reason: to repurpose programming more extensively among the distribution outlets. Lack discussed that issue and much more with BROADCASTING & CABLE Editor in Chief Harry Jessell and Deputy Editor Steve McClellan. An edited transcript follows.

What's the next piece of news that's going to come out of this network?

We have to restructure NBC, which is a big challenge for all of my colleagues. By restructuring, I mean we're not going to change the business that we're in, but we're going to change the way we do business together. We create so much original programming here between sports and entertainment and news and stations and the cable channels and our partnerships outside of those core assets, and we don't exploit nearly well enough all of that material with each other.

Give us an example.

I was just looking at a wonderful piece on CNBC about this Saudi billionaire. Steve Frank reported for them. He did a phenomenal job. And that story will only appear on CNBC. The rest of the organization still doesn't know that it's out there. I said to [NBC News President] Neal [Shapiro], how could we let that be? Why wouldn't we have that on Dateline? You could have helped produce that piece and kicked up the production a notch.

What's the answer?

The answer is that we don't communicate well enough with each other about all the great things that we're doing, and my feeling is that, if I can get our team around a table and get some kind of common understanding of who's doing what every single day, all across the board, in cable, in stations, in news, entertainment and sports, we're going to produce much more intelligently and have more resources to produce, on a discretionary basis, better programming and stop duplicating, in some ways, efforts that, if you could take out of the system, you'd be free to do so much more. So that's what you'll see next: some real integration across the board at NBC that I don't think you've ever seen at a network before.

The mandate from GE is growth. Given the size of some of your competitors, just how daunting a challenge will it be to expand this company?

It's a challenge, no question about that. But I don't think it's as daunting as perhaps others who are looking at us outside. I think we're kind of the prettiest girl at the dance, as [NBC President] Bob [Wright] has said from time to time. There are opportunities, partnerships, a whole variety of ways of growing your business and growing your programs.

As Wright mentioned last week, GE, for the first time in a while, is interested in being presented a growth plan that includes acquisitions. What's on your wish list?

We'd love to buy some cable channels.

People have mentioned that an entertainment cable network would fit well in your stable. Is that fair?

Yes. That's been a strategic discussion inside NBC for several years. And, yes, I'd like to see us have one.

Do you have to buy one, or can you create one at this point?

Same part of the discussion. Can you create one, can you buy one? Do you partner with someone? Do you do an arrangement, as a 50-50 joint venture?

What about CNBC? Can that be it? It's business during the day, and it's prime time at night, why not?

That's not where we're looking to take CNBC. CNBC is an extraordinarily strong brand whose core asset is business news. The nighttime prime time schedule complements that. It's essentially talk, opinion and a general-news hour. If anything, I think one of the great questions about CNBC is, can you extend the business-news daypart through the evening?

Could Pax TV end up as your entertainment cable network?

It's tough to characterize it because we don't obviously control it at this point. We have an important interest in it. And they have an important interest in us. They don't have equity in us, but they have a relationship with NBC that's very important to them. Pax is going to be very much, I think, an opportunity for us to explore the kinds of programming we put on NBC.

So clearly that relationship is building and will continue to develop?

Yes.

And you'll share an increasing amount of programming?

Yes.

Before we leave prime time, what are you seeing in terms of innovative deal points for programming?

I've seen proposals that are a little bit more healthy and reasonable for all parties. Perpetual license fees that allow you to manage your costs. Equity partnerships, where you can share the risk much more extensively, so that you're either not going to kill yourself if the show's a hit and you're renegotiating a license fee that's just going to be really tough to swallow or you're sharing in the ownership of the property going forward and you can manage the economic health of a hit that way with your partner.

Will you try to pick up back-end syndication licenses on new shows like Emeril?

Our guys are in those discussions, yes. NBC Enterprises President Ed Wilson participates in those conversations. We'll try to retain those rights where we can. We'd be crazy not to.

If you want to remain independent, don't you have to have a studio? You don't have too many places to go.

We've never seen that as a prerequisite for growth or survival.

You don't have any leverage at the big Hollywood table if you don't have a studio of your own.

Well, we do have a studio called NBC Studios.

It's a little one.

Small, but growing nicely.

You think that's enough?

Maybe. I don't know, yet.

You don't feel you have to make a deal with Columbia?

No. Listen, if there was a deal that came to us that looked very attractive, we'd sure look at it. But, with the movie studio, that's a business we wouldn't want to be in. It's very tough. With regard to a television studio, I'd like to see us make smart partnerships with studios around town. I'd like to see NBC studios grow and prosper, as well. And then I'd like to really answer your question at that point and say: Well, you know what? We do need to have a studio bigger than the one we've got, or there are limitations to how we can grow our own studio. But it's not clear to me that that will be the case.

As you know, Bob Wright wrote a memo recently sort of wondering out loud about the impact of HBO's The Sopranos. Can we expect something different out of Undercover or any of NBC's new shows in terms of grittiness, edginess or pushing the envelope?

You're not going to see nudity and certain kinds of language and violence on network television, whether it's NBC, CBS or ABC. Advertiser-supported television isn't going to be comfortable with or tolerate that.

But the implication is that he wants to do more. He wants to do different things. He wants to make some changes.

We always want to do that. I don't know that The Sopranos is the model for that. But I believe strongly that we need to take more chances creatively, take more risks. We probably spent too many years chasing programs that looked like Friends or even Seinfeld, when we should have been chasing some programs that broke the mold in the way that those programs did.

How about Katie Couric? Her deal is up soon, and she's on the minds of a lot of people.

Yes. My mind, too. She is one of the best people I've ever worked with in my life, and I'm going to work like mad to keep her here. We're friends, and we've been very close colleagues for the last eight years. She has a wonderful array of opportunities that will be placed in front of her by all of our competitors. At the end of the day, I'm hopeful, if not a little confident, that she'll stay with NBC.

Why do the networks think it's so critical to get rid of the 35% audience cap?

It's an old model. First of all, it's based on reach, not really numbers of viewers. It's a model that was born in an era of regulation that really doesn't make much sense for our business or any business going forward. The station guys have big margins and want to protect their interests and don't want to recognize that we have interests, too. We've got to work those interests through together. I think we can.

But you want to own more stations in markets where you can?

We want to have the ability to do that, yes.

Can we assume that you will not be sending out any letters like Wright did to Chronicle, threatening them and scaring off other potential bidders for stations?

I understand why Bob sent that letter. While it wasn't well-received in some quarters, I think it was an important letter to send.

How can you defend that? That's really, I think, what triggered the panic among the affiliates. They have the feeling that they can't sell to anybody but their network.

I don't want to argue that piece of it. Bob makes his own case well enough. But the tension, to go back to the original premise of your question, is historic.

What about the future of news, specifically your network newscast in the evening?

We like the plan that we've got, which is we have two 24-hour cable news channels. And we have, on the broadcast platform, four warhorses that have continuing great value both to us and to our viewers: Nightly News, the Today show, Meet the Press and Dateline. I can't tell you the enormous financial value over the last seven, eight years that Nightly News has provided to this organization. The plan was to produce the program as stylishly, imaginatively and journalistically honestly as we could. And that plan has reaped tremendous benefits.

Why is 60 Minutes executive producer Don Hewitt running around like it's the end of time for the evening newscasts?

Because he doesn't know the positive financial impact that Nightly has on the NBC News organization and the ability to amortize costs over MSNBC and CNBC. God bless him. I love Don. I've known him forever. And perhaps the model that he does know at CBS is different from the one we've got. Maybe he sees something inside CBS News that I can't see. But NBC Nightly News remains symbolically and structurally at the heart of NBC News.

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