nbc's Zucker Has 'Excuses, Few Results' for Comcast
Dec. 4 (Bloomberg) -- Jeffrey Zucker, NBC Universal’s chiefexecutive officer, may have as few as nine months to provehimself to his new bosses at Comcast Corp. while the biggestU.S. cable operator seeks regulatory approvals.
Zucker, 44, will continue to run NBC Universal during aregulatory review period, executives of the Philadelphia-basedcompany said yesterday on a conference call. The process toacquire control of the General Electric Co. unit may take nineto 12 months.
Profit at NBC Universal has slid 27 percent this year.Under Zucker’s watch, the company’s cable channels liftedresults while the last-place NBC broadcast network sank lower inratings. He moved talk-show host Jay Leno to prime-time, drawingscrutiny from analysts and industry executives who questionwhether he’s the best choice to lead NBC under Comcast.
“Wall Street will go insane if Zucker keeps his job,”Laura Martin, an analyst at Needham & Co. in Pasadena,California, said in an interview. “Wall Street views JeffZucker as value destructive. He has many excuses but few value-creating results.”
Zucker wasn’t available for an interview, according to aspokeswoman for New York-based NBC Universal.
Since Zucker became CEO in February 2007, NBC has fallenfurther behind rivals CBS, Fox and ABC in prime-time ratings.Zucker renewed Kevin Reilly’s contract in 2007 and replaced himshortly afterward with TV producer Ben Silverman as chief of NBCEntertainment. Silverman left in September of this year, afterhelping Zucker to engineer the Leno move from late-night.
Weather Channel
Zucker pared 500 jobs one year ago and consolidatedoperations to cut costs as advertising sales fell. He expandedNBC’s holdings by buying the Weather Channel for $3.5 billionwith private-equity partners Bain Capital LLC and BlackstoneGroup LP. Fairfield, Connecticut-based GE reduced the value ofNBC Universal’s stake in the Weather Channel in the thirdquarter, the parent company said in October.
Should the deal be approved, Zucker will report to StephenBurke, Comcast’s chief operating officer, the cable company saidyesterday in a statement.
Comcast, the largest U.S. cable-TV provider, yesterdayagreed to form a $37 billion joint venture combining GE’s NBCUniversal with its own media assets. Comcast will own 51 percentof the new entity.
Zucker “has helped lead other large acquisitions for NBC,successfully transforming their company,” Comcast CEO BrianRoberts said yesterday on a conference call. “We are lookingforward to Jeff and his team doing the same here again.”
Regulatory approval may take 9 months to 12 months, Zuckertold NBC employees in a memo.
‘Business as Usual’
“For now, it remains business as usual,” said Zucker, whohas been named CEO of the new venture. “I expect this will bethe case for the vast majority of you even after the dealcloses.”
Comcast, which raised its dividend yesterday, rose 22cents, or 1.4 percent, to $16.13 at 4:06 p.m. New York timetoday on the Nasdaq Stock Market. GE gained 20 cents to $16.20and is unchanged this year on the New York Stock Exchange.
NBC, where ratings have dropped for seven straight seasons,hasn’t recovered from losing “Seinfeld” and other hit shows atthe start of the decade. The network will be “fiscallyprudent” when weighing a bid for broadcast rights to the 2014Winter Olympics in Sochi, Russia, and the 2016 Summer Games inRio de Janeiro, Zucker said today on CNBC. The Olympics aresomething the company would “like to stay in,” he said.
Zucker has “at least a couple of years” to right thebroadcast network and bring it up to second or third place inthe ratings, according to Don Seaman, head of TV research at MPGNorth America, a New York-based media buyer.
“NBC, their biggest issue right now is they have noidentity,” Seaman said. “They just seem so adrift.”
‘Also-Ran’
When Zucker became NBC’s entertainment chief in 2000, thenetwork was in second place in prime-time. In 2004, he waspromoted to lead NBC Universal’s TV group, which also includedcable properties.
“Part of me is surprised he keeps going and going andgoing,” said Seaman, whose company’s clients include McDonald’sCorp., Sears Holding Corp. and Carnival Corp. cruise lines.“NBC unfortunately has become that also-ran.”
The network hasn’t “done a very good job” of programmingprime-time in the last several years and needs to do better,Zucker said last month at a conference at the Paley Center forMedia in New York.
At the Universal Pictures film unit, U.S. and Canadian box-office sales have declined 16 percent year-to-date, according toresearcher Box Office Mojo. At the same time, the industry ispoised to set a record, surpassing $10 billion in sales,according to estimates from Hollywood.com Box-Office. Theindustry is grappling with a decline in DVD sales.
NBC Rise
In October, Zucker shuffled management at the film studio,naming Adam Fogelson chairman and Donna Langley co-chairman,replacing Marc Shmuger and David Linde.
Zucker, a Harvard graduate, started as a researcher for NBCSports coverage of the 1988 Seoul Olympics. Later he landed atthe “Today” show, which he would eventually run by the age of26, and ascended to run NBC’s Los Angeles entertainment divisionin 2000. He became the network’s president two years later.
Bob Wright, Zucker’s predecessor who helped merge NBC andVivendi SA’s Universal Studios, is credited with creating cablechannels such as MSNBC and CNBC, and acquiring Telemundo andBravo. NBC Universal’s third-quarter cable operating profitclimbed 11 percent to $552 million as sales gained 8 percent to$1.2 billion, GE said Oct. 16.
It’s advantageous for Comcast to keep NBC Universal stableduring the acquisition process, Wright said. He declined tocomment on Zucker’s performance.
‘Getting the Deal Done’
“Right now the focus is on getting the deal done, andkeeping management intact,” Wright said in an interview.
Firing Zucker could be costly. His employment contract runsthrough 2013, according to two people with knowledge of theagreement. They asked not to be named because terms aren’tpublic.
“Replacing Jeff Zucker would underscore to Wall Streetthat value creation is Comcast’s top priority,” Martin said.“NBC has gone to fourth from first and he should take theblame. He should get out of the way.”
To contact the reporter on this story:Andy Fixmer in Los Angeles at afixmer@bloomberg.net;Sarah Rabil in New York at srabil@bloomberg.net
Last Updated: December 4, 2009 17:04 ESTSource: Bloomberg
