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Who Gets Universal Satisfaction?

The winners, the losers when NBC finally takes control 3/07/2004 07:00:00 PM Eastern

Bob Wright is on the clock. He wants to leverage NBC's muscle at the upfront, giving USA Network and Sci FI Channel, two key Vivendi Universal Entertainment assets, a boost. But until government regulators give their blessing to the Peacock's takeover of VUE, CEO Wright can't power the NBC engine.

And time is running out. Wright can't play too much with his new VUE toys until the deal is sealed. And he privately complained that won't happen until May or June—too late to seize a bigger cut of the projected $14 billion upfront bonanza.

Yet, in the world of network real-politik, the delay is a short-term annoyance at best. It won't deter Wright's ambitious plan to transform NBC. With key associates, such as NBC Group President Randy Falco, network ops chief John Eck (head of the VUE integration), freshly minted NBC Entertainment, News and Cable President Jeff Zucker and NBC Cable President David Zaslav, Wright has been doing "a total rethink," according to one NBC executive, on virtually every phase of the business.

Nobody inside NBC is talking for the record. But plans are being prepped to boost advertising and licensing revenues from its expanded stable of cable nets, plus use the Universal library to woo cable operators with innovative video-on-demand cable.

NBC is driving future strategy, which will likely proceed sans several Universal execs. Endless hours of "integration meetings" involve brass from both camps, but "they are all one-way communications," says one VUE executive. "We tell them a lot but hear very little back."

A sneak preview of what's to come is emerging from quiet meetings between NBC execs and cable operators. Cable's discussions with other network/studio conglomerates, notably Disney and Fox, often escalate into open warfare. Think Disney's caustic fights over ESPN. But Zaslav and Wright are starting out with a holistic view of cable distributors, encompassing not just basic networks but the possibilities created by VOD, HDTV, and cable carriage of multicast digital broadcast signals.

Operators are laser-focused on securing better content for VOD, largely because it's something DBS services don't have the capacity to offer. "USA Network has rights to 20 out of the 24 hours of programming they put on in a day. Universal has 4,000 movies in their library, probably 2,000 of which we could use. I don't think that has any real cost to them, and it has a real value to us," says a cable company president.

NBC's more immediate task is recasting VUE to the model set by parent General Electric. The industrial giant does dozens of acquisitions a year and is enforcing its rigid financial and operating systems on VUE. GE thinks producers of sitcoms should meet the same fiscal discipline as manufacturers of light bulbs.

First casualty: One NBC goal is to "expunge all Barry Diller's influence from the company," says a former Universal exec, referring to a passel of executives the onetime chairman put in place when he was running the show. The major survivor is pre-Diller Universal movie-studio chief Ron Meyer, who is deeply involved in the integration and is a frequent flyer to GE's Fairfield, Conn., headquarters. But among those brushed with Diller's taint and whose loyalty to the new regime is questioned are Universal Chairman Michael Jackson, Universal Television Group President David Goldhill, and Universal Television Productions President David Kissinger.

Before deciding to go run Comedy Central, outgoing USA Network President Doug Herzog was offered Kissinger's job—and passed. Kissinger himself has been job-hunting and was a contender for NBC President of Programming Kevin Reilly's old job, controlling FX's programming. Industry executives speculate that Dick Wolf, lord of NBC's lucrative Law & Order empire, will have a say in who gets the studio job.

Bravo President and NBC Executive Vice President Jeff Gaspin, who oversees reality programming, seems headed for even bigger things. Conventional wisdom has Gaspin adding USA and Sci Fi Channel to his fiefdom. But steering three cable nets and
NBC reality—a bright spot for the network right now—may be too big a job for Gaspin. With reality hot, NBC might demand his total concentration.

"There are other people that can run a cable group," observes one exec who works with both companies.

On the syndication side, industry executives say it's a "horse race" between Steve Rosenberg, president of Universal Domestic Television, and Ed Wilson, president of NBC Enterprises. Some say NBC Universal will keep both, while others say "the smart money is on Ed Wilson."

Rosenberg is well regarded, insiders say, enough so that top execs inside and outside of NBC have put calls into Wright on his behalf. He is also said to have 31/2 years left on his Universal contract. And Rosenberg has a big job at Universal, covering not only first-run syndication but also international sales and pay-per-view, areas that NBC is only now getting into.

On the flip side, Wilson is already in-house at NBC and is getting ready with a big launch in The Jane Pauley Show, a project personally backed by Zucker. That could be enough to keep Wilson on the reservation. What will definitely happen is that the company's syndication sales force will be streamlined, eliminating all duplicated jobs across the country.

Who's a big winner in the corporate shakeup? Zaslav. As president of NBC Cable Networks, he's the point man with cable and DBS companies. Up to now, he has been responsible for distribution of marginally viewed MSNBC, CNBC, and Bravo. Adding USA and Sci Fi nets him two top-10 cable prizes. Another winner: Universal's top cable salesman Jeff Lucas, a former NBC exec. Sales insiders say he should keep his current charges, USA and Sci Fi, and add Bravo. CNBC and MSNBC sales would remain separate. Sci Fi chief Bonnie Hammer is likely to make the cut.

Finally, Zucker's scheduled shift from Burbank to 30 Rock to take on greater corporate duties leaves a West Coast power vacuum. "They need to have somebody with financial and operations background heading up NBC on the West Coast," says an ex-Universal exec. "GE doesn't really understand NBC's business. If you don't have someone on the West Coast who can say here's what we're doing and why, that could create problems."

Personnel is one key area; corporate culture, another. NBC is a top-down, management shop, heavy on training seminars and consultations. It makes Universal, which has changed hands several times in recent years, look like the Wild West.

"There is a lot of stuff," notes one executive involved in the reorganization, "where they'll both need translators."

 

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