NBC’s upside and down in big merger

High stakes for combined TV operations

The marriage of NBC and Vivendi Universal’s entertainment properties will give execs at the newly created conglom a chance to prove that bigger is better when it comes to the small screen.

Being part of Disney hasn’t helped ABC; indeed, some would argue just the opposite is true. The success of CBS, meanwhile, owes less to its acquisition by Viacom and much more to the leadership skills of Leslie Moonves.

But with NBC Universal, cable’s on the table in a big way. And that could be the key difference in making this mega-marriage a more prosperous union.

With the addition of powerhouses like USA Network and Sci Fi, NBC’s finally a major player in the wired world. Considering what it’s done with Bravo in the past six months, both nets — along with the little-seen but mega-hyped arts net Trio — will benefit from the Peacock’s marketing muscle.

NBC also gets a pumped-up cross-promotional machine perfect for hyping entertainment skeins from the mother network — and vice versa.

At least on paper, there are other ways the NBC-VUE merger could prove to be a major plus for the Peacock — as well as several execs at both companies:

  • While the “Law & Order” franchise probably wasn’t going anywhere — U saber-rattling aside — having Dick Wolf under the Peacock banner means the net’s most important primetime player is secure. Wolf will still get a boatload of coin when it comes time to renew his skeins over the next 18 months, but the negotiations will now be civilized.

  • Bob Wright has another reason to stay excited about television, as well as having more bright shiny toys with which to keep valued execs — and attract new ones.

Entertainment chief Jeff Zucker, already expected to move back to New York next summer, will likely play a key role in the new conglom, as will network prexy Randy Falco. Michael Jackson — who left a great gig as head of U.K. programming powerhouse Channel 4 to serve as chairman of the Universal Television Group — is expected to be lost in the exec shuffle, though no firm decisions have been made.

Bravo/NBC alternative topper Jeff Gaspin and USA Network chief Doug Herzog are the prime contenders to run the new cable operation, while incoming NBC Studios chief Kevin Reilly now has an even clearer path to the top spot at NBC Entertainment.

Indeed, with Reilly, Herzog and Gaspin all on the same development team, NBC now boasts a sort of murderers’ row of development execs. That’s important, given that “Friends” is ending and “ER” is aging.

  • NBC Studios and Universal Network Television will almost certainly merge into one large production entity, supplying skeins to all nets rather than just NBC. It’s unclear what role U TV prexy David Kissinger will play in the new company, but it’s possible NBC could use its new status as a serious studio player to attract another heavyweight exec to the company to serve as head of production.

Zucker told Daily Variety the proposed merger has a huge upside for the Peacock on many fronts.

“There’s a tremendous amount of complementary assets between the two companies,” he said. “On the television side, there’s a great and storied production arm and some very exciting cable channels that will fit very well with NBC and our studio and cable properties. Universal has been the producer of many great TV shows, and it has the most important franchise in all of television, which is ‘Law & Order.'”

On the cable front, while NBC has had mixed success with news cablers — MSNBC’s a disaster; CNBC’s much more successful — the net has already proven its prowess at incorporating an entertainment cabler into the Peacock fold.

Just six months after Gaspin, who’s also head of alternative programming for the network, took charge of Bravo earlier this year, he and marketing arm the NBC Agency helped to turn it into one of the fastest-growing cable networks in the Nielsen ratings.

The careful orchestration of the marketing of Bravo’s runaway hit series “Queer Eye for the Straight Guy” made it into the most-talked-about new summer shows on both broadcast and cable.

“One of the most exciting things that happened this summer was what happened when we put the full weight of NBC behind Bravo,” Zucker said. “That proved the power of NBC, both on-air and from a marketing standpoint. It’s one of the big benefits of this merger.”

NBC is certain to ramp up the development of original series and movies for both USA and the Sci Fi Channel, with a stress on lowering the average age of their viewers to get more money from advertisers. NBC Universal will also be able to sell advertising on Bravo and USA in tandem, much like AOL Time Warner markets TBS and TNT as a pair.

USA has already been evolving toward a younger, edgier programming p.o.v. — i.e., more like NBC — with hits such as “Monk” and “Dead Zone,” as well upcoming projects like “Touching Evil.” What’s more, in two weeks, repeats of NBC’s “Law & Order: SVU” will begin running five nights a week on USA, marking the first NBC off-net fare that has shown up on USA’s primetime sked.

Also, the more original programming, the better the case USA and Sci Fi will have with cable operators, which pay USA only about $415 million a year in license fees and Sci Fi about $127 million. By contrast, USA’s main competitor TNT harvests $822 million a year in affiliate fees.

Industry insiders caution, however, that it’s much easier to jumpstart a barely breathing net like Bravo than to grow ratings for an already-established powerhouse such as USA.

In TV syndication, Universal has turned the long-running “Maury Povich Show” into one of the major bellwethers of firstrun talkshows by getting station upgrades over the past few years and pouring resources into the content of the show. The only syndicated talkshows that beat “Povich” in the ratings are “Oprah,” “Dr. Phil” and “Live With Regis & Kelly.”

“The Jerry Springer Show” is still a ratings success for Universal after more than a decade of controversy, and U has renewed three other five-a-week firstrun shows for the 2003-04 season: “Blind Date,” “The John Edward Show” and “Fifth Wheel.”

NBC Enterprises, the syndication arm of NBC, has “Access Hollywood” as a consistent prime-access entertainment magazine, and it’s planning to produce and distribute a daily syndicated talkshow hosted by Jane Pauley starting in the fall of 2004. NBC Enterprises’ “John Walsh Show” has returned for a second season, and the distrib has a new relationship show from Bunim-Murray (“Real World”) called “Starting Over,” starting this month.

NBCE’s also become a player in the licensing biz, launching CDs related to NBC skeins and releasing a slew of DVD collections of NBC properties.

The question for NBC will be whether to consolidate the two syndication companies under one umbrella or allow them to continue to operate separately.

Universal will argue that it runs a full international-syndication operation, headed by Belinda Menendez, Universal’s co-president of distribution, with Steve Rosenberg, who handles domestic syndication, pay-per-view and video on demand. Ed Wilson is president of NBC Enterprises, which shares its foreign distribution with MGM TV.

Meanwhile, during an appearance on CNBC, Bob Wright said that the acquisition boded well for NBC affiliates.

At the same time, affiliates remain concerned about NBC’s propensity to repurpose broadcast programming on its cable channels, and they question whether they will see an increase in repurposing once NBC Universal hangs the open-for-business sign.

“If shows are repurposed right away on cable channels, that product has less value,” said Roger Ogden, general manager of KUSA Denver and chair of the NBC board of affils. “We need to better understand what their approach is going to be.”

On Madison Avenue, NBC’s landmark news was received with some trepidation. Media buyers said they are never happy about consolidation, considering they lose bargaining power as a result.

“I like to have varied suppliers. The more outlets, the more leverage,” Carat exec Andy Donchin said. “On the creative side, obviously, these are two very strong networks. USA and Sci Fi channels are a great addition to NBC. I’m sure having these two channels will give them that many more options and more leverage.”

(Pam McClintock and John Dempsey in New York contributed to this report.)

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