NBC U shakeup prompts questions for parent co.

Hollywood insiders last week found themselves invoking the name of a man they’ve never met and whose opinions remain obscure to them.

Jeffrey R. Immelt is the man who rules General Electric and hence bears ultimate responsibility for key decisions involving the future of NBC Universal. It’s Immelt’s man, Jeff Zucker, who again shuffled the deck at NBC last week and thus focused attention on the malaise gripping the entire corporate landscape, encompassing film and TV.

In granting Ben Silverman his exit visa, Zucker dealt directly with a management issue at the network. But indirectly he also raised the bigger Immelt question: Does GE want to stay in an industry — entertainment — that has proved so uniquely inhospitable?

It was Immelt, of course, who decided to acquire Universal, thus running counter to Jack Welch’s dictum that GE should only buy the No. 1 entity in any industry. Welch also felt that Hollywood was too unpredictable.

Consider the following: At a time when GE was already suffering severe recession pangs, NBC Universal reported a 41% decline in second-quarter profits. Vivendi, the enigmatic French conglomerate that owns 20% of the company, is making noise about running for the exits. Rival companies both in old and new media are indicating an appetite to feast off NBC Universal assets.

So how does Jeff Immelt assess his life in showbiz? No one really knows, beyond his spokesman’s periodic assurances that “NBC Universal is a business we like.”

On the surface, Immelt is a genial, extroverted man who came out of sales and who makes eye contact when he speaks to you. But he is unique among the mavens who rule the global media conglomerates in that he’s never had a tie to any aspect of the business. Sony’s Sir Howard Stringer was once a newsman, Viacom’s Sumner Redstone was an exhibitor, Time Warner’s Jeff Bewkes ran HBO. But Immelt’s world was one of nuclear reactors and jet engines.

A recent Charlie Rose interview provided insight into the world according to Immelt: There will be more attention paid to the “infrastructure markets” (energy, health care, etc.) and less to financial services, Immelt said. GE would like to start building nuclear power plants again as well as wind farms. “My future really depends on the ability to play in every corner of the world,” said Immelt.

The most painful moment for the exec was cutting the GE dividend for the first time since 1938. If you’re a CEO these days, he confessed, “you’re sleeping less, you’re worrying more, you’re working your team harder. What makes a cycle like this so hard is that it’s just so relentless.”

Clearly, Immelt must find the problems surrounding his media ventures to be equally relentless. The audience for NBC’s primetime programming has declined 13% in the past two years. About 60% of NBC Universal’s profits are now generated by cable not broadcast. Ad rates for the coming season are being rolled back as advertisers cut costs.

On the film side, Universal insists it has retained profitability despite being caught in a down cycle. Strong grossers like “The Fast and Furious” sequel were diminished by flops like “Land of the Lost.”

Ironically, some of the biggest underperformers on the slate were smart, sophisticated films — “State of Play” and “Duplicity,” for example.

To a degree, the same applies to NBC U’s corporate executives. Immelt’s appointees, by and large, are smart, talented people who are willing to take chances.

But these are tough times, and Immelt is not getting enough sleep. With everyone feeling the pinch, there is less tolerance for intriguing experiments like Silverman who, as NBC’s top programmer, exhibited great flair but an absence of managerial talent. His successor, Jeff Gaspin, is widely regarded as a solid corporate player.

So the questions remain: Given the range of company-wide problems, will there be still other changes in the NBC Universal cast of characters? Indeed, will the stresses and strains trigger further shifts in corporate ownership?

Inevitably, the answers to these questions reside with the man no one knows. At some point, Jeff Immelt may have to think more about prosaic things like movies and TV shows and worry less about his reactors.

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