Honeymoon kicks off for NBC Universal
This article was updated at 7:10 p.m.
NEW YORK — A beaming Peacock spun its new globe Wednesday as the NBC Universal marriage was sealed, giving rise to a media comglom that’s expected to cross-promote television and film with unprecedented fervor.
NBC chair-chief exec and GE vice chair Bob Wright wasn’t even afraid to use the word “exploit” during a gala press conference at Rockefeller Center announcing the merger of NBC and Vivendi Universal.
And “exploit” the new company it can, as its assets include the NBC Network, Universal Pictures, a stable of cable properties, theme parks and 29 TV stations — a 24-hour promo machine, according to Wright.
“Today begins a very bright chapter for these two successful companies. Our well-defined focus gives us great clarity of purpose,” Wright said.
There are not expected to be widespread firings in the hunt for cost savings. NBC U execs predict about 500 layoffs — out of a combined workforce of 15,000 — over the next several years. Most will come on the television side in L.A.
Wright’s top leadership mantle accompanied him to the press conference, including U Studios prexy-chief operating officer Ron Meyer; NBC U Television Networks Group prexy Randy Falco; NBC U Entertainment, News and Cable prexy Jeff Zucker; NBC U Sports & Olympics chair Dick Ebersol; and NBC U TV station prexy Jay Ireland.
All said they have learned from other recent mergers, which have had a mixed track record, and noted they’ve had a year to work together already before the closing.
Riches in store
U’s television dowry includes cablers USA Network, Sci Fi Channel and Trio as well as Universal Television Studios, home of Dick Wolf’s “Law & Order” franchise.
Due in part to the overlap with their NBC counterparts, Universal’s television properties saw the greatest number of arrivals and departures within the newly merged company.
On Wednesday, NBC U made official the long-rumored departure of Michael Jackson as chairman and David Goldhill as president and chief operating officer of the Universal TV Group. U Network TV senior VP of publicity, advertising & promotion Neil Schubert and U Network TV exec VP of production Matt Herman also are expected to leave the company.
Syndication division NBC Enterprises will morph into NBC U TV Distribution. Unit got thrown into disarray last month when Ed Wilson, president of NBC Enterprises, and Steve Rosenberg, president of Universal TV Distribution, both turned down the NBC U TV Distribution job.
As a result, NBC placed former Vivendi Universal Entertainment chief financial officer Frederick Huntsberry in charge of distribution as corporate exec VP of the NBC U TV Group.
Reporting to Huntsberry is Barry Wallach, former exec VP of NBC Enterprises, who was named U.S. syndie topper on Wednesday. His title is domestic sales and distribution prexy.
Sci Fi prexy Bonnie Hammer will add the presidency of USA to her duties, while Trio prexy Lauren Zalaznick will become prexy of both Bravo and Trio.
The exec team at Universal Studios remains the same, with Meyer responsible for Universal Pictures and theme parks. U Pictures and theme parks remain led by Stacey Snider and Tom Williams, respectively.
At the film studio, Wright announced that Universal’s key deal with DreamWorks now extends to 2010, and its pact with Ron Howard and Brian Grazer’s Imagine Entertainment goes through 2008.
No big changes pending
Meyer said NBC has not asked for any fundamental changes to the studio’s movie dealmaking strategy.
On the business and sales side, NBC U sales and marketing prexy Keith Turner and NBC U cable prexy David Zaslav have been given expanded duties along with their new titles. Both will report to Falco.
Zucker, the whiz kid who shot to fame as exec producer of NBC News’ “Today” show, has responsibility for all television content, including broadcast, news and cable.
In addition to Huntsberry, reporting to Zucker will be the following:
- His successor as NBC Entertainment prexy Kevin Reilly.
- NBC U cable entertainment and cross-platform prexy Jeff Gaspin, whose empire includes U’s cable nets and NBC’s Bravo, CNBC and MSNBC. Hammer and Zalaznick will report to Gaspin.
- NBC U Television Studio co-presidents Angela Bromstead — from the NBC side of the aisle — and David Kissinger — from the U side.
- NBC News prexy Neal Shapiro and CNBC prexy Pamela Thomas-Graham.
Gaspin said he’s not going to go overboard on repurposing dozens of NBC shows on USA, although USA has scored solid ratings by repeating episodes of “Law & Order: Special Victims Unit” and “Law & Order: Criminal Intent” a few days after their NBC run.
Instead, Gaspin said he plans to ramp up the number of original series and movies USA already schedules. Gaspin doesn’t rule out reverse repurposing if USA comes up with a hit like “Monk” that NBC could use to shore up a weak night of primetime programming. When “Queer Eye for the Straight Guy” became a runaway hit on NBC’s wholly owned Bravo, NBC picked up episodes for its own schedule.
Hammer said she’d spend the next few months getting up to speed on USA’s operation. That’s when she’ll decide whether to appoint an exec VP and general manager of each network to report to her and streamline the hierarchy.
Juicy Olympics upcoming
USA is salivating over one immediate benefit from the NBC partnership: multiple hours of Olympics programming, starting with this summer’s games in Athens and continuing through all the Olympiads to 2012.
Ebersol said that USA “will be the cable home of the Olympics.” He said he’d announce more details of USA’s Olympic coverage later this month. USA already plans to carry 24 hours of Olympic trials between May 22 and July 24.
The Olympics programming will not only provide a Nielsen lift to USA but also help it score bigger license fees from cable operators. Led by Comcast, by far the biggest multisystem cable operator in the U.S., the ops have begun to hold the line on giving more money to cable operators when their contracts come up for renewal. The Olympics will give USA a potent weapon in these negotiations.
The one network that could end up an orphan in the merger is Trio, which reaches only 20 million subscribers and would have to double that number to pull meaningful ad revenues from Madison Avenue. (USA reaches 88 million cable/satellite homes and Sci Fi 63 million, according to Nielsen.)
Restricted to digital tiers, which reach only a percentage of a cable system’s subscriber base ranging from 20% to 60%, Trio might end up folding its operation.
But that decision won’t be made right away, said Trio’s Zalaznick, who will add the presidency of Bravo to her duties. Bravo may end up taking over Trio’s function within NBC U.
Zucker said he is not worried about content being diluted through cross-promotion or cross-net placement.
“It would be a huge mistake for us to not make the most of a right opportunity,” Zucker said.
Wright promised that NBC U would open every movie across all platforms, while Meyer added that each film will be considered individually in terms of what cross-promotion effort to undertake.
U execs expressed relief that the studio seems to have found a well-financed, steady and permanent parent after changing hands four times in the past decade.
Vivendi agreed to sell Vivendi Universal Entertainment to NBC last year as part of a massive asset disposal plan that has allowed the once heavily indebted French group to work its way from near bankruptcy to relative financial health. Vivendi received $3.65 billion in cash from the sale and retains a minority 20% stake in NBC Universal.
Wright said Barry Diller’s InterActiveCorp has retained its stake of 5.4% in Vivendi Universal Entertainment, which now is part of the merged entity.
Newlywed conglom will remain devoted to content, drawing on its vast film and TV libraries, as well as its ongoing cable and network sked. Wright said company would reserve judgment on making sizeable investments in distribution channels.
“Closing NBC Universal is another important step in the transformation of GE,” said Jeff Immelt, chairman-CEO of the giant conglom. “Strategically, this business will have an advantage in content, so valuable in the future of digital media. Financially, it will provide a great return for GE investors.”
(Josef Adalian in Hollywood and Jill Goldsmith in New York contributed to this report.)