Television Companies Tighten Their Belts

The softer advertising environment is taking its toll on some of America’s major television networks, with layoffs and hiring freezes at some top TV companies growing.

U.S. television network NBC, home of top-ranked TV shows such as “Friends” and “Frasier,” said Friday it will lay off 280 to 560 people, or 5% to 10% of its 5,600 workers, in the quarter as it seeks to cut costs in the wake of a slowing economy, which has hurt advertising demand.

CNN News Group, a unit of the world’s largest media company--newly merged AOL Time Warner--also is expected to announce a large number of layoffs, the Wall Street Journal reported this week. CNN declined to comment.

In December, Rupert Murdoch’s News Corp. said it had started a hiring freeze because of a weak advertising market.

“Media companies exposed to the softer advertising market are trying to exact as many cost savings as they can,” said Vinton Vickers, an analyst at J.P. Morgan Chase. “It’s a natural thing.”

Dot-com start-ups had been spending huge amounts of their budgets on advertising as they tried to raise their profiles, but as they have fallen on hard times, their ad dollars have dried up. And concerns about economic growth have led other companies to be more picky about their advertising spending.

“It is no secret that the current economic climate is affecting our business,” NBC Chief Executive Bob Wright said in an internal memo to staff obtained by Reuters.

“It is now clear that we must go beyond belt-tightening and take the additional step of reducing the size of our work force,” he wrote to employees.

Analysts said the dot-com bust and the slower economy have created a softer ad environment, leading to layoffs at companies dependent on advertising.

J.P. Morgan Chase’s Vickers was expecting no growth in the first quarter of this year, compared with 2% to 5% in the last quarter of 2000. And that compares with growth in the low to mid-teens in the last quarter of 1999, he said.

There could be further layoffs in the sector, experts say, depending on what the economy does.

Dana McClintock, spokesman at Viacom Inc.-owned CBS, said he was unaware of any layoff plans at his network. He forecast a good year for the network, which will air this year’s Super Bowl--one of the year’s top advertising events--and a second series of the popular reality TV show “Survivor.”

Officials at Fox, a unit of News Corp., could not be reached for comment.

In Pasadena, at the winter Television Critics Assn. meetings, the co-chairman of ABC Entertainment Television Group, Lloyd Braun, said his network is beginning to see some signs advertisers are beginning to reemerge.

“We are starting to see signs of improvement, but it has been tough, I think, on everybody,” Braun said. “But we are looking forward to improving in the months ahead.”

Braun develops new shows at ABC and is not directly responsible for ad sales.