Survivor: Burbank - Broadcasting & Cable

Survivor: Burbank

Who, if anyone, will NBC vote out of a job if this fall season bombs like last year's?
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With the start of the fall season looming, the chief topic of speculation in the TV community is not Martha Stewart’s post-incarceration prospects or what’s inside that tunnel they found on the last episode of Lost. No, the big mystery that has networks, producers and agents buzzing is: Will NBC’s Jeff Zucker and Kevin Reilly keep their jobs?

The two executives are the ones that have primary responsibility for reviving the network, whose plunge from first place to fourth in the Nielsen ratings over the past year will cost parent company GE hundreds of millions of dollars. The pressure would be high anywhere, but it’s perhaps worst at a company where the mantra is to be first or second in whatever business it’s in.

“I hear it every day,” Reilly says of the speculation about his job security. Having spent plenty of time in the past trading rumors “about those guys who are in trouble or about to go down,” he says, “I don’t like being in that position.” Zucker was vacationing and unavailable last week.

Former NBC President Warren Littlefield has an idea of the kind of pressure on Zucker and O’Reilly. Running a network is so intense, Littlefield recalls, that he truly knew that pilot seasons were over only “when my dreams were no longer a conglomeration of all these characters from all these different shows acting together.”

Earlier this summer, senior NBC Universal executives acknowledged that Zucker and Reilly were on the line. Reilly, as president of NBC Entertainment, is most directly responsible for programming. But NBC Universal Television Networks President Zucker is very hands-on when it comes to the shows and, as a consequence, is tied tightly to their failures and successes.

With more distance from last fall’s disastrous season, some NBC Universal executives contend that the situation at the top is not quite as dire as they had suspected. “This is not a company that changes horses in midstream,” says one, who two months ago questioned the two network executives’ ability to survive if this season is weak.

But there’s still plenty of anxiety within the company. NBC is clamping down on discretionary spending, curtailing everything from travel to the issuance of new BlackBerrys. Insiders talk darkly about the possibility that a weak fall debut will prompt layoffs.

Their gloom increases as the extent of the financial damage from NBC’s plummet becomes clearer. As last season commenced, the network was expecting to generate around $3.7 billion in prime time ad sales. If things go really well this season, it will be lucky to generate $2.9 billion. If the new schedule sags, $2.7 billion will be more realistic.

It’s not helping matters that, on the movie side of NBC Universal, a different case of jitters has developed. GE had hoped that Universal’s movie revenues would offset the decline in broadcast TV; instead, box office has dropped, and DVD sales have suddenly flattened.

NBC’s fall prospects are not great. Despite its 20% ratings slide, the network is being conservative, adding just six shows. That surprised some buyers, given the scope of the network’s prime time problems.

Only one NBC pilot is generating much critical buzz, the brilliant redneck-finds-karma sitcom My Name Is Earl. At the upfront, Zucker was also excited about E-Ring, a Pentagon drama dusted by the magic of Jerry Bruckheimer, creator of CBS’ CSI tent-poles. But the E-Ring pilot has been reworked—never a good omen.

Another sign of potential trouble is the fact that Reilly moved right back into development even before seeing how his new slate performs. He’s planning a mini pilot season in the coming weeks, calling out for new ideas and projects. Last week, he was looking at a new legal drama from Dick Wolf, commissioned a pilot for a second Wolf show, and was reading a spec script from David E. Kelley.

But NBC is hardly surrendering the fall. Jon Miller, the NBC Universal Television Group’s chief of marketing, says the network is increasing its marketing outlay by around 30%, spending heavily on billboards and radio.

That’s partly because the most efficient promotion—previews on NBC’s own air—is diminished by the ratings decline. But NBC and other networks have also learned from ABC’s success. The network put an unprecedented $11 million behind promoting the launch of Desperate Housewives and around $8 million to advertise Lost last year.

In the past, NBC would spread fall-season promotions across many new shows, “like butter pats on a big piece of bread,” Miller says. Now most of the money is being slathered on Earl, E-Ring and sci-fi thriller Surface.

In Hollywood, some players are gloating because they still resent the way Zucker handled his arrival there. Though a wunderkind producer who had supercharged NBC’s Today, he had no background developing entertainment shows.

After taking the helm of NBC in 2000, he regarded controlling series cost as a high priority and bragged about getting the price of an hour-long drama down from $1.2 million per episode to $500,000, slashing the pay to writers and actors and using a “go shoot it in New Zealand” mentality to keep production expenses down. “I just know we can do this and the audience will not notice this at all,” he said in 2001.

A few years later, NBC was largely out in the cold when hot dramas started clocking in at $2 million per episode. Awkwardly for Zucker, he can’t point to many non-drama successes, either. The Apprentice stands out as an exception.

Reilly, who was previously head of programming at FX, has a deeper reservoir of goodwill in Hollywood. But improved ratings are the surest route to job security.

The important question for NBC Universal Chairman Bob Wright is not whom to blame but who can fix NBC. Perhaps that is Bonnie Hammer, president of USA Network and Sci Fi Channel. Or, even if the fall season doesn’t work, it might still be Reilly and/or Zucker.

Reilly tries not to dwell on rumor-mill chatter. “If I lived every day with that fear in my head, I’d be a sure failure,” he says. “I’m confident enough in myself not to become a blubbering basket case every time I hear a rumor.”

E-mail comments to jhiggins@reedbusiness.com

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