NBC slashes newsroom jobs to increase profits

[Bloomberg News/Associated Press]

NEW YORK NBC Universal said Thursday that it would cut 700 jobs and streamline its news operations as part of an overhaul aimed at exploiting new forms of electronic distribution.

NBC said it expected the restructuring to save $750 million in operating expenses by 2008. The job cuts would represent about 5 percent of its work force.

NBC Universal is 80 percent owned by General Electric. Vivendi of France owns the rest.

As part of the changes, NBC's long- struggling 24-hour cable news channel, MSNBC, will move its operations to NBC's headquarters in Rockefeller Center in New York City and also to another NBC facility in New Jersey.

The changes do not represent a diminishing commitment to news, but reflect how the industry is changing, said Jeff Zucker, chief executive of NBC Universal's television group. "The growth in news is in different places - it's online, it's on wireless," he said.

The company's television station group will also create a consolidated news facility in Burbank, California, that will support NBC as well as its Spanish- language broadcaster, Telemundo.

The company's Universal Studios entertainment business also will be affected, with cuts to consolidate support and marketing functions.

The expected savings follow three lackluster years at NBC Universal, where operating profit fell 10 percent in each of the past three quarters.

"They didn't have much choice," said Bill Carroll, vice president and director of programming at Katz Television Group, which sells advertising for television stations. "If you are not successful, then your balance sheet will reflect that and you will have to make reductions to ward off even more drastic situations."

As viewers decline, sapping advertising dollars, networks are increasingly turning to the Internet. NBC Universal said it planned to reinvest much of its savings into higher-growth areas.

It has been aggressive in creating broadband-only channels, for example, and has partnered with Yahoo through Telemundo to establish one of the most popular Internet destination for Hispanics. NBC also signed deals with the video-clip Web site YouTube to show its programming and started an online market for videos with partners including Access Hollywood and Forbes.com.

The changes will be noticeable on television, where NBC will stop scheduling high-priced dramas and comedies during the first hour of prime time at 8 p.m. Instead, cheaper-to-produce programming like "Deal or No Deal" or "The Biggest Loser" will fill that hour.

Zucker noted that the rival ABC network had quietly been doing the same thing in recent years.

"We want to be sure that we continue to provide the best programming possible," Zucker said. "We just want to put the programming where we get the highest rate of return."

NBC's cost-saving plan involves laying off people from the company's 11 news divisions, including on-air talent.

article originally published at http://www.iht.com/bin/print_ipub.php?file=/articles/2006/10/19/business/nbc.php.

The media's job is to interest the public in the public interest. -John Dewey