NBC’s Wright Endures, Says Network Will Too

Since 1986, television viewers have watched a historic shift as emerging cable channels snatched nearly half the audience share from the once-dominant three major networks.

Those tumultuous years for network television also happen to coincide with Bob Wright’s reign as president and chief executive of NBC.

Wright, 55, a Jesuit-educated former prosecutor, was an outsider to the network business when General Electric tapped him to run NBC in 1986. His hard-nosed management style shattered the mannered corporate culture at NBC, and he became the architect of vast changes at the venerable network. He drove the company into cable programming, building CNBC and MSNBC, and into global investments.

With such top-rated shows as “ER,” “Seinfeld,” “Frasier,” “Friends” and “The Tonight Show,” NBC has been at the top of the ratings for several years and, despite the rise of cable, its earnings are measured in the hundreds of millions.

The network business has always been fickle and, five years ago, with NBC trailing ABC and CBS in the ratings, few expected Wright to last. He now is the longest-serving president of a television broadcast company ever.

Recently NBC made a momentous decision by dropping out of the bidding for the rights to broadcast National Football League games after 33 years in that business.

Wright was interviewed at his Rockefeller Plaza office in New York City.

Q. What are the greatest challenges facing the network business?

A. Whether we can get the right programming together and promote to the audience to get them to watch and become affiliated with us. That’s hard. As an industry, we haven’t been able to get the mixes of talent that we used to be able to get on individual programs. We lose promising actors and actresses who should be great second leads to become leads on shows that are going nowhere. [But] everybody wants to be a star, and we see so much evidence of bad decisions being made by people who are writer-producers.

Q. Within a year or two the aggregate cable audience will exceed the aggregate network audience. What does that mean to NBC?

A. We have a larger absolute audience of the “Today” show today than we think we’ve ever had since the show went on the air. That’s a smaller rating share but a larger number of actual people watching the show. My point is that if I’m an executive with a company that has products or goods or services to sell . . . we have an audience which is the largest possible audience that you can get in the morning.

As long as we can have shows that have enough popularity so that they have substantially larger audiences than other single channels, we’re going to be fine. But that’s not going to be easy to do.

Q. Does it concern you that programs such as “Moby Dick” on cable can beat the networks in audience share on particular nights?

A. On an absolute number, it didn’t. Among the homes that have USA Network, it did very well. Among the national audience, it was about a 5 rating, which wouldn’t do much for us. But the point is, it’s a network show. The show was kind of a step down from how they would do it for us or for CBS. It didn’t have the special effects, the whale wasn’t that lively, the lifeboats weren’t that big, the water wasn’t that rough, that sort of thing. But it certainly was a story presented in an expansive way.

Q. Won’t we see more of those kinds of shows grabbing viewers from the networks?

A. Yeah, but that is not easy for them to do either. When you look at cable every week and you look at the top 10 shows, generally seven of the top 10 shows are wrestling. And “South Park” is the No. 1 show and then after that the other shows are generally the most current off-network show. That’s not really a major threat to our business.

Q. Won’t advertisers follow the audience to cable?

A. The concept of basic cable doesn’t have any particular attraction [for advertisers] because it’s 50 different channels. An advertiser would prefer to have five good ones.

Q. Time Warner is making that case with a package of its cable networks.

A. Yeah, but it’s difficult. You have a big problem with what we call duplicated audience. They’re the same audience watching different cable stations. Or they’re watching different time periods--the same audience. So as a buyer, you’re forced to go out there and pick around. If you want to reach 100% of the people relatively quickly, that’s what we do. If you can be very patient and you want to reinforce the message, you can buy a lot of cable channels. That’s a chore, and it’s not going to get a lot easier unless one company owns the top 25 cable networks, and that’s not going to happen.

Q. Yet the market continues to fragment. How does a broadcast network . . .

A. I’m not saying it’s an easy business. But fragmentation hurts everybody. ESPN’s audience today is smaller than it was. Its rating is lower than it was five years ago. In other words, the cable networks individually aren’t rising up closer. There are exceptions to that. But in most cases they’re not, and it’s just as hard for ESPN to increase its viewership as it is for NBC to increase its viewership.

Q. So if you and your successors run NBC well, the network will keep its edge into the foreseeable future?

A. Yes. I think the question is, can that be done? Can we find programs that are going to be attractive enough to have a disproportionate amount of viewers? Can we afford to put on programming that does that? And I think that’s what we labor with all the time. You could ask the question, why, if you believe that that’s so important, why would you get out of football, because football is a proven commodity? It’s kind of a no-brainer.

Q. That was our next question.

A. Well, unfortunately for football, the ratings have actually been going down on a fairly steady track. But you still know you’re not going to wake up one day and find there are no viewers for football, certainly not in the next eight years. We made the determination that, yes, that would be a wonderful way to maintain viewership, but we thought the economics were so negative that it would foreclose us from doing other things that we thought were more meaningful. We thought it would basically put us in a hammerlock.

Q. Doesn’t spending $13 million an episode for “ER” have the same effect?

A. Well, it’s a lot less. For the next three years, “ER” is more important to us than football. “ER” delivers huge audiences in prime time, and it’s very important to our stations and our affiliates, and it’s a much more meaningful, tangible relationship than the NFL on Sunday, where we had a nonexclusive package of football.

Q. Why would you do one and not the other?

A. You can’t have everything. That’s where we drew a line. We didn’t think there was any growth opportunity with [football], and we didn’t think that there was any unique sales opportunity with it. We had it for 33 years, so we knew something about it. You look at the markets involved and you look at a lot of the national games that we had to put on, a lot of them were just not that interesting to viewers.

Q. You’ve been in discussions with Time Warner about starting a new football league. I know you’re not done with your study, but what does your gut tell you at this point?

A. Well, I really can’t answer that question. We’re still trying to do it. We’ve got to balance the issues of anger over not having football with creating something that is attractive to us in a network sense, which means we have to be able to generate large enough audiences to make it worthwhile for our own television stations and our affiliates. It can’t be a hobby.

Q. Howard Stern is going to have a late-night show on CBS. Are networks under pressure to allow cruder programming on the air?

A. Times change. There are different sensibilities today than there were 25 or 30 years ago. There’s a lot more tolerance for language and material than there was. [NBC] will never be at the forefront of antagonizing audiences. Howard Stern has a following with men [ages] 18 to 34. That’s his audience, and you can’t antagonize that audience. Whether it works on television, I don’t know. He was on television and he did well here in New York and nothing everywhere else.

Q. Could “South Park” be a network show?

A. Possibly, but it wouldn’t have been. I think that would have been an antagonizing show for us. We would have sparked so much controversy among people who would claim that they have been long-time viewers of network television and NBC that it would have been a lightning rod of dissatisfaction. I don’t lose a lot of sleep on that one. We can’t deal with everything.

Q. Is there a fundamental realignment in the offing between networks and their affiliate stations over how to share programming costs?

A. It may well be a major change. For this one, we don’t have to get on the field. We have box seats and air conditioning for this event.

Q. Because you don’t have to ask your affiliates to share the cost of football . . .

A. The other networks are not making money and, probably as a result of football, it will be impossible for them to make money. I think the air-conditioned box seat is to see what happens with CBS and ABC. You can pull up a chair here, and we’ll watch together.

Q. Is it possible to make money if you’re not the No. 1 network?

A. When Fox put football on, they guaranteed themselves they wouldn’t make money at the network, despite the fact that they [had been] profitable. “The Simpsons” and “X Files” create a tremendous revenue source for the Fox network. They wiped that out with football four years ago. So you have one [network] on record saying, we already don’t care. Now, the question is, are the other two ready to say that? If you’re saying it’s just the way it is, then you will not make changes.

Q. We’ve been in an up advertising cycle for a long time. How serious will it be when there’s a down cycle?

A. It depends on what your commitments are. We have two major locked-in commitments--the Olympics and the NBA. And we’ve had a lot of experience now with the NBA . . . programming that is uniquely attractive in the spring. It doesn’t have any direct competition with sports programming, and we felt that that is a risk that’s well worth taking. The Olympics--we felt that that would give us an identity and that we could control the level of production and the quality, and . . . it would always be attractive to advertisers. Beyond that, our liabilities aren’t very high.

Q. Technologically, we stand on the precipice of a huge change, and that is digital television. Have you figured out how you want to use the digital spectrum?

A. Digital affords everybody more opportunity. It could be more exciting pictures, it could be more exciting audio. It’s too early to judge that.

Q. You can use the spectrum to broadcast one high-quality image or half a dozen channels at the current quality.

A. Our view of it is that we don’t see any near-term benefit from slicing up five or six different channels. When [people] go out into restaurants, into bars, into public areas, and they start seeing very-large-screen television with high-resolution programming--will that be exciting enough for them to want to buy that kind of equipment? I think it will be. Unfortunately, the costs escalate with the size of the screen, but the excitement escalates with the size of the screen. So you got kind of a tough consumer choice here. We’re looking at a couple of years here before even good consumer research is going to be around to guide manufacturers, the Sonys and whatever, as to how much of a consumer product this is going to be.

Q. America Online contends that people browsing the Internet are taking most of that time from television.

A. I’ve seen the presentations. I haven’t ever seen the research that’s behind it. You can’t tell how much of that time is coming from magazine reading, from talking, from being on the phone, from going out. There’s a mix of activities that are getting shorted, and TV may be the largest of the mix, but it’s certainly not the only one. . . . The reason AOL has done so well is they have done on the Internet what NBC had done in the earlier days of television. It’s aggregated programming from many sources to make it convenient to use.

Q. Would it make sense for NBC to own AOL?

A. Well, it would have made sense at $60 a share, but probably not at $150.

Q. Are you satisfied with the investment in MSNBC?

A. In prime time, we’re doing like 300,000 and 400,000 [viewers], which is really quite an accomplishment. It’s a start-up business, and we lose a lot of money. We said we would be in a break-even situation by 2001 or ‘02, and it looks like we’re on target. I’d say the situation has gotten dramatically better in the last seven or eight months than it was, say, for the first year or so. I wish I could do that three times more.

Q. Today there are a handful of companies--Time Warner, Disney, News Corp.--that are integrated to a great degree from the bottom to the very top of the business, production through distribution, and globally. Do you feel pressure to link NBC up with one of those companies or yourself acquire more production?

A. That’s an argument we go back and forth on. We have to be ready to produce a lot more of our programming than we have in the past. There isn’t enough money in the game to pay middlemen for programming. We always have to pay talent. But what you can’t do is you can’t pay middlemen.

Q. How can you avoid it unless . . .

A. We made the determination that you either have some kind of a major relationship with another producer, a studio, or you have to do a great deal more of this ourselves. And I think that it’s probably going to end up being ourselves.

Q. There’s always speculation that GE will try to buy a Time Warner or do something else, you know--take a big bite. Or get out of the business altogether . . .

A. GE is an earnings-driven company, and that’s what the stock sells on, and it has done very well on that basis. We generate a lot of earnings, so there’s no incentive for GE to walk away from NBC. Now, if we can’t generate earnings, then GE is going to have a problem with us. . . . We take on projects that don’t earn money, like MSNBC, but we’ve got to be very careful in doing that, that we don’t tank our earnings in the process. Many of the people we compete with are not in that game. But we can’t make that crossover, or otherwise GE loses its focus. So it isn’t likely that GE is going to take some major plunge into an area where there are no earnings.

Times staff writer Jane Hall also participated in the interview.