NBC Universal to end CEO’s 21-year reign
Jeff Zucker, the fast-rising television executive who made his name as executive producer of NBC’s morning show “Today,” will be named chief executive of NBC Universal this week, according to four people at the company.
Zucker, 41, will succeed Bob Wright, who has spent nearly 21 years building the company brick by brick, transforming “the peacock” from a stand-alone TV network into a sprawling entertainment empire with broadcast and cable channels, a Hollywood movie studio and theme parks.
Wright’s reign will have been among the longest in media history.
The regime change was confirmed by people who spoke on the condition of anonymity because the appointment was not yet official. Key executives from NBC Universal’s West Coast operations planned to fly to New York this week for the announcement.
The move comes as Jeffrey Immelt, chairman of General Electric Co., the owner of NBC Universal, looks to shake up its entertainment unit and compete more aggressively against digital powers such as Google and popular youth websites such as MySpace.
NBC’s dominance in TV has slipped in recent years. All traditional media have lost ground as advertisers and viewers have migrated to the Internet.
The 63-year-old Wright, who is also a vice chairman of GE, had wanted to stay on as chief executive at least until the end of the year, three people close to him said. But Immelt, 50, insisted that the transition occur now. He was determined to put his own team in place at NBC Universal, just as GE’s legendary chief executive Jack Welch did when he handed the keys to Wright when the industrial behemoth bought the network in 1986.
The GE boss decided late last year that Zucker, after being groomed for more than a decade, was ready for the top job, according to two people familiar with his thinking.
GE and NBC Universal declined to comment.
Cultural change coming?
The changing of the guard could radically alter the culture within NBC Universal, which is known for its buttoned-down, financially focused sensibilities. Wright is a lawyer and financial strategist seen as serious, cerebral and aloof, while Zucker is considered more of a creative executive who is casual, cocky and known for his shoot-from-the-hip style.
In addition to its headquarters at 30 Rockefeller Plaza in New York, NBC Universal has West Coast operations that include Universal Studios, KNBC Channel 4, two Spanish-language television stations, and TV and film production facilities in Universal City and Burbank.
The media industry has been captivated by the drama playing out at the top of one of the world’s largest media conglomerates. Zucker, who has been Wright’s second in command since December 2005, has long been considered the favorite to succeed his boss.
The Harvard graduate quickly rose through the ranks at NBC after joining the company in 1986 as a sports researcher for its Olympics coverage. He moved to “Today” in 1989, and three years later, at 26, became the program’s youngest executive producer ever.
He is credited with building “Today” into a juggernaut that continues to be the company’s most profitable program and has been TV’s most-watched morning show for 11 years.
In 2000, Zucker was dispatched to Burbank to stabilize NBC’s prime-time entertainment division, which had been rocked by management upheaval. He managed to keep hundreds of millions of dollars flowing into GE’s coffers by extending “Friends” for two additional seasons and by plunging into unscripted TV with such moneymakers as the gross-out show “Fear Factor” and the Donald Trump vehicle “The Apprentice.”
He won fans among the troops in Burbank with his open-door, team-building approach.
But during his four years running NBC’s West Coast operations, Zucker failed to find a blockbuster to replace the retiring hits “Friends” and “Frasier.” When he returned to New York in 2004, NBC’s once well-stocked cupboard of culture-defining prime-time shows was nearly bare. Soon, the network tumbled from its long-held perch at the top of the ratings to fourth place, behind Fox, ABC and CBS.
That put Zucker’s ascent in jeopardy.
Delivering on mandate
Early last year, Immelt quietly put out feelers to see if there was a worthy candidate outside the company to replace Wright, according to two high-level media executives.
About that time, Immelt gave Zucker a mandate to clean up the lingering issues bedeviling NBC’s various television units. Isolate the problem to NBC’s prime time, he told Zucker, according to two ranking company executives.
He scored points for averting a potential disaster on “Today.” When star anchor Katie Couric announced that she was leaving after more than 15 years, Zucker wooed Meredith Vieira from Walt Disney Co. as her replacement. The seamless transition kept the ratings high.
At the lagging MSNBC cable channel, Zucker installed a new management team and increased the profile of newscaster Keith Olbermann. The channel is up in the ratings.
So is CNBC. Zucker greenlighted Jim Cramer’s “Mad Money” stock-picking show, and last year was the channel’s most profitable.
Last fall, Zucker spearheaded a companywide cost-cutting plan, dubbed NBC 2.0, that in part streamlined the news-gathering operations. It is expected to save NBC Universal $700 million over three years.
What finally moved Zucker back into the pole position, according to two high-level company executives, was when NBC began showing signs of a turnaround last fall, with “Sunday Night Football” and younger-skewing shows such as “Heroes” and “The Office.”
Wright won’t be leaving immediately. He is expected to stay on as chairman of NBC Universal during the transition, according to one executive close to the situation. It was unclear how many months he would remain.
Wright joined GE in 1969 as a staff attorney. In 1986, when GE acquired the network for $6.3 billion from RCA, Welch caused a stir by appointing Wright chief executive. At the time, Wright was running GE Financial Services and was 42 -- about Zucker’s age.
“There was a lot of skepticism that he could do the job or do it well,” said Edward Lawler, distinguished research professor at the USC Marshall School of Business. “But he proved the cynics wrong.”
One of the first things Wright did was steer NBC into the cable business. Wright, who left GE for a short stint in the early 1980s to run Cox Cable Communications, was an early believer in the value of cable channels at a time when most broadcasters dismissed them as low-rent knockoffs.
Today, cable outlets USA Network, Bravo and CNBC are among NBC Universal’s most lucrative assets.
Wright also built the flagship into the industry’s most profitable television network. He invested heavily to keep the Olympics on NBC and exited money-losing sports such as professional football and baseball. (NBC renewed its NFL partnership last year to help lift ratings.)
In the mid-1990s, Wright masterminded an unconventional package to keep a then-restless Jerry Seinfeld on the air and away from other networks. He arranged for the comedian to receive valuable GE stock.
Seinfeld, in effect, became the network’s business partner. And with such shows as “Seinfeld,” “Friends,” “Law & Order” and “The West Wing,” NBC secured its image -- and billions of dollars in profits over the years -- as the network that catered to the young, urban, upscale adults whom advertisers most covet.
Wright championed NBC’s entry into the burgeoning Spanish-language TV business with its 2002 purchase of Telemundo, which is just beginning to pay dividends.
But his biggest gamble, and perhaps his greatest legacy, was the 2003 deal to buy Universal Studios from the French firm Vivendi Universal. The acquisition catapulted the newly renamed NBC Universal into the big leagues, adding a movie studio, theme parks and profitable cable channels to the mix.
Into the new frontier
But just as Wright forged a path for NBC in the brave new world of cable, Immelt seems to believe a younger executive is needed to charge the emerging digital frontier.
Zucker’s challenge will be to keep NBC Universal’s core businesses healthy while mining new riches from the Internet and other digital technologies.
“Bob was a brilliant strategist who really built the company into what it is today,” said a senior NBC Universal executive. “But now you need an operator, a manager, someone to take it to the next level.”
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GE corporate revenue
General Electric Co., based in Fairfield, Conn., is made up of six business units that produced a little more than $163 billion in revenue in 2006 and nearly $21 billion in profit. NBC Universal, based in New York City, has about 16,000 employees and accounted for about 10% of revenue. Major divisions include:
Division: 2006 revenue
GE Infrastructure: $47.4
GE Industrial: 33.5
GE Commercial Finance: 23.8
GE Money: 21.8
GE Health Care: 16.6
NBC Universal: 16.2
NBC broadcast network that showcases news, sports and entertainment programming, including its hallmark shows “Today,” “NBC Nightly News With Brian Williams,” “The Tonight Show With Jay Leno,” “Law & Order,” “Heroes” and “ER.” Its programming is transmitted to 200 affiliated stations in the U.S.
26 NBC-owned TV stations (10 NBC and 16 Telemundo stations)
Cable channels, including USA Network, Bravo, CNBC, MSNBC, Sci Fi, Sleuth, Universal HD and the Latino youth-oriented mun2
Telemundo, the Spanish-language broadcast network that reaches 93% of U.S. Latino viewers
NBC Universal Television Studio, which produces such programs as the “Law & Order” franchise, “Heroes,” “The Office,” “30 Rock” and “Friday Night Lights”
Universal Studios, theme parks and entertainment complexes in Hollywood (Universal City); Orlando, Fla.; and Japan
Universal Pictures, a major Hollywood film studio that has distributed such movies as “A Beautiful Mind,” “King Kong” and “The 40-Year-Old Virgin”
Focus Features, a specialty film unit that has distributed such films as “Brokeback Mountain”
(Other revenue): 4.2
Source: General Electric Co., NBC Universal