Burke still shaking up the executive suites and clearing out those who don't hew to the CEO’s vision
A marathon enthusiast, Steve Burke knows a thing or two about how to compete for the long haul. Yet nearly three years after Comcast took control of NBCUniversal from General Electric, the spotlight-shunning leader of the Peacock is still shaking up the executive suites and clearing out those who don’t hew to the CEO’s vision.
The seemingly endless stream of high-level changes has raised questions among NBCUniversal insiders about what exactly Burke and Comcast ultimately have in mind.
In his public comments, Burke has been more vocal about what NBCU lacks in regard to its competitors than he has been about what he sees for the biz’s future. He is famously low profile when it comes to speaking to the media (he declined Variety’s request to be interviewed for this story), and he is routinely praised by longtime friends and colleagues for his forthrightness and loyalty.
But recent events have raised questions about his style, if not his strategy, in running the media giant. According to multiple sources, Universal Pictures chairman Adam Fogelson was blindsided by the news he would be replaced in overseeing the movie studio by Comcast vet Jeff Shell, an exec with no film experience. The same was true for the recent ousters of James Schamus from Focus Features, the indie label he co-founded 12 years ago, and Emilio Romano at Telemundo, the Spanish-lingo net that Burke has tabbed as a growth priority for the Peacock.
The flurry of restructuring since mid-September has insiders reeling.
» NBCU dramatically recast the company’s film operations with the appointment of Shell, former head of NBCU Intl., and the promotion of Donna Langley. Schamus’ departure coincides with a plan to rework the scope of Focus, which will aim to bring more global appeal to the specialty movies it releases.
» The Peacock lured former senior Univision exec Cesar Conde to help oversee its international operations, with Shell now leaving London for Universal City.
» NBCU veteran Lauren Zalaznick, the architect of Bravo’s success, set her exit plan after losing operational control of Bravo, Oxygen, Style and Telemundo in February, following a turf struggle with her NBCU cable rival Bonnie Hammer.
» Hammer, meanwhile, reshuffled her portfolio, announcing within weeks of the Sept. 23 launch of male-skewing cable outlet Esquire that it would replace female-focused Style rather than G4, as had been previously expected. NBCU, she said, had too many networks focused on women. In the process, she pushed out Oxygen head Jason Klarman, and broke up the team that has led NBCU crown jewel USA: Chris McCumber got sole oversight of the cabler, while his ex-partner, Jeff Wachtel, shifted over to chief content officer for NBCU’s cable studio.
» Telemundo president Romano departed after reaching what one person familiar with the situation called philosophic differences on business direction and strategy with Joe Uva, who in April was made NBCU’s chairman of Hispanic enterprises and Telemundo. Uva is a former head of Spanish-language rival Univision, and there is speculation that Conde will eventually have a hand in steering Telemundo.
» But Burke made a point of tamping down speculation over the fate of NBC Entertainment chairman Robert Greenblatt by extending his contract through 2017 — a deal quietly leaked to the media on the eve of the fall season launch.
» Just last week, NBCU unveiled a radical overhaul of its advertising operations, combining sales for NBC with USA and Syfy and organizing sales e orts by discrete demographics rather than by networks.
A single frenzied month does not constitute a norm, to be sure, but almost since the start of Burke’s reign, one NBCU segment or another has been in the midst of wrenching change as he has methodically examined the sprawling conglom’s key units. He has reworked NBC Entertainment; recruited Linda Yaccarino from Turner to head fi rst cable ad sales, then the whole NBCU portfolio; NBC Sports, bringing in Mark Lazarus while bidding farewell to Dick Ebersol; the news division (Pat Fili-Krushel took oversight of NBC News, MSNBC and CNBC, while NBC News chief Steve Capus opted to leave); and cable-programming operations (Hammer’s moves represent a second wave of activity). In the process, say people familiar with the company, new bosses have come in over veterans who find themselves with less autonomy and freedom to maneuver, while the rank-and-fi le are left to watch and wonder what’s going on.
Current and former employees describe a company where change — even some chaos — seems to be constant. “There was a lot of whispering about what might come next, who’s angling for this job because this other person left. You’re always trying to ferret out information about what’s going on at the higher levels that you can use,” said a former NBCU ad sales staffer.
After the recent whirlwind of activity, chatter at 30 Rock has now turned to whether layo s may be in the wind for the company’s lower-level employees. A person familiar with the situation said the company does not expect any across-the-board reduction, but suggested some job cuts could be possible as new managers organize units and teams. The source emphasizes that some of the recent changes have been fueled not by Burke but by senior managers reworking their own fiefdoms.
One factor behind the internal hand-wringing is NBC’s history as a relatively stable place compared with its media brethren, owing, perhaps, to its previous GE ownership, suggested Je rey A. Sonnenfeld, senior associate dean at the Yale School of Management. “Some of their competitors have had more volatility over their lifetime,” he noted. “NBC has usually been the model that people have used as the comparison for what they’d like to be.”
Burke — whose father Daniel Burke was one of a pair of executives who ran TV station operator Capital Cities, which bought ABC in 1986 — is operating in a di erent fashion than many media-industry execs, Sonnenfeld said. Rather than immediately shaking things up, as many entertainment toppers are prone to do, he has tried to bide his time. “He doesn’t make these shoot-from-the-hip decisions.”
The process may be awkward for insiders, especially those who suddenly have a new boss, but Burke does not have time for niceties. In remarks made to investors since Comcast’s purchase, he has been blunt: NBCU doesn’t get the same respect from advertisers and affils as its peers. He wants content that has broader appeal, and he wants to use it to drive up ad rates and the fees he gets from cable, satellite and telco distributors. Consider the fact USA commands just 71¢ per subscriber per month from distrib, according to SNL Kagan, while Time Warner’s TNT gets $1.24. And while the company’s NBC was the only one of the five English-speaking broadcast outlets to notch a gain in ad commitments in this year’s upfront, the Peacock’s primetime woes over the past several years mean NBCU is selling from a lower base than some of its rivals.
And Burke can’t just have his eye on revenues. The longer it takes him to get NBCU into what he thinks is fighting trim, the greater the opportunity that emerging rivals like Netflix, Amazon or any number of new content players have to make inroads into NBCU’s potential viewers.
“As the marketplace continues to evolve, the job descriptions change, and as the job descriptions change, sometimes you’re not just rearranging, you’re recasting,” said Michael Kassan, CEO of MediaLink, a firm that advises media companies and advertisers, and who has done business with Comcast and NBCU. He called Burke “thoughtful.”
In response to queries from Variety about recent corporate changes, NBCU made executives available to discuss the company’s direction and atmosphere. The execs described Burke as direct and transparent about his goals for the company, while eager to see employees test out new roles. Before ABC veteran Jeff Bader came to NBC Entertainment as president of program planning, strategy and research, he said Burke made plain his plans. “He was really all about rebuilding this business, investing in turning NBC around,” Bader said. In the past month, Burke has started to take meetings with employees from around the company, the better to hear from new people and to explain what’s going on.
Burke’s changes have had significant effects on staffers. USA Network marketing exec Alexandra Shapiro has worked at NBC through the tenures of three CEOs: Bob Wright, Jeff Zucker and now Burke. Her duties have changed radically from when she started at the company more than a decade ago. At the company’s cable programming operations, the networks were split between two executives, Shapiro noted. Now employees are asked to collaborate with a broader array of people, which she views as important. At a time when new technology is upending the media sector, she said, “We all have to learn new skills, and if you can’t evolve, then this isn’t the place for you.”
Even in the midst of executive churn, Burke has made certain that NBCU beefed up its assets. The company spent $4.4 billion for the rights to the next four Olympic Games, bought out Microsoft from MSNBC.com for a reported $300 million, and paid $1 billion to Blackstone Group to acquire the 50% of its Orlando theme parks it did not own.
Burke’s strategy is reminiscent of that of his former employer, the Walt Disney Co., which is known for its success in crafting tentpole franchises and stars that can work across various media platforms and disciplines. During his tenure, NBCU has evidenced a desire for entertainment that has the potential to reach bigger crowds. Comedies with niche appeal like “30 Rock” and “Community” are giving way to those aimed at broader auds, such as “The Michael J. Fox Show,” “Welcome to the Family” and “Sean Saves the World” (whether the masses show up for these mass-appeal efforts is another story).
Universal’s film division has found success in recent months with sequels like “Despicable Me 2” and “Fast & Furious 6.” Meantime, the indie film world is reeling from news of restructuring at Focus, which will see its New York headquarters shutter in the wake of the unceremonious firing of Schamus. The arthouse unit will now be run out of Los Angeles by Peter Schlessel, an alum of FilmDistrict and Sony, with a mandate to pursue more commercial fare, like “50 Shades of Grey.”
Under Burke’s aegis, NBCU revenue has increased, moving to about $23.8 billion in 2012 from about $21.1 billion in 2011. For the first six months of 2013, NBCU revenue increased 3.3% to $11.3 billion. Comcast already has extended Burke’s contract to 2018, and given him a nearly 20% bump in salary to $2.6 million a year. And by most accounts, said Yale’s Sonnenfeld, “there’s no daylight” between Burke and his boss, Comcast CEO Brian Roberts, referring to the remarkably close relationship the two share. Simply put, Burke isn’t going anywhere.
That leaves NBCU employees to wait out the tumult or find something else to do. In this modern world of TV shows being embedded in tweets, and consumers binge-watching TV dramas weeks after they air, there’s no knowing whether Burke has solutions guaranteed to increase NBCU’s power and prestige. Meanwhile, employees just want an end to the dizzying number of corporate shifts. Rather than figure out which new senior executive is in line to be your next boss, said the former ad sales employee, “You just want to do your job.”