2.0 Minus 700


NBC Universal rolled out its plans for deep, painful cuts with all the fanfare of a promo campaign for the fall season. On the front page of last Thursday's Wall Street Journal, NBC U Chairman Bob Wright and NBC U TV Group CEO Jeff Zucker outlined the cuts to the news division along with plans to slash the many millions spent on primetime programming on its broadcast network. They even gave this public bloodletting of some 700 employees a snappy new slogan: NBCU 2.0.

What a change from the way the NBC of old operated. Twenty years ago, no place was better at losing bodies and bringing down costs under the radar. Beginning in the late 1980s, the network cut approximately 4,000 jobs over five years, but very little was written about it.

Why go so public? It's certainly in keeping with NBC's penchant for fielding self-deprecating entertainment (see 30 Rock and Studio 60 on the Sunset Strip). My guess is, Zucker is out to prove to Jeffrey Immelt, the chairman of NBC U parent General Electric, that he's got the warrior-CEO mettle to be a worthy successor to the 63-year-old Wright.

Cuts are always painful and often necessary, but it's a mistake for any business to think it can cut its way to prosperity. And it's hard to imagine a worse time for such belt-tightening.

Wright and Zucker's plans to virtually do away with scripted programming in the 8-9 p.m. hour to clear the way for cheaper reality fare come just as NBC's fall lineup is showing new life, both in ratings and creativity. Entertainment President Kevin Reilly was finally beginning to show promise as a turnaround artist.

Other networks, no doubt, will be looking to follow NBC U's lead in making cuts to its news division, but you have to wonder if NBC News' longstanding dominance isn't in jeopardy.

News President Steve Capus says most of the cuts—there's talk of 300 or more out of the news division's 4,000 employees—will be in areas where the audience won't notice any change in quality or content. It's not about “retrenchment” or “reduction,” Capus told my colleague Anne Becker. It's about “reorganization” and “reprioritizing”—“backroom stuff” that viewers neither know nor care about.

I certainly hope so. The folks up the food chain from Capus would be foolish to do a slash-and-burn job on news. On the broadcast side, news is one of the precious few arenas where the network dominates. NBC Nightly News, Today and Meet the Press all lead their respective niches and throw off hundreds of millions of dollars of revenue. Estimates I've heard put margins for NBC News in the 30%-40% range.

MSNBC may be an also-ran in cable news, but it still makes money. And CNBC is a half-a-billion-dollar-a-year revenue cow, still strong enough to make Fox News Channel wary of launching a competing financial-news network. Why mess too much with all of that?

A mere three days before the announced cuts, Capus and Nightly News anchor Brian Williams were proudly receiving an Edward R. Murrow Award from the Radio-Television News Directors Association for NBC News' on­going coverage of Hurricane Katrina and its aftermath. Both men picked up an “Overall Excellence Award” in the broadcast news category, too.

In accepting the awards, Williams paid tribute to “the countless” NBC News staffers who worked tirelessly to cover Katrina. Noting that a competitive news environment not only “demanded” but also “deserved” quality, Capus praised the skilled journalists and the far-flung resources of the division he commands.

Sad to say that the odds of Williams' and Capus' making similar pronouncements at next year's RTNDA event don't look as good.