Leno, NBC, Laugh All the Way to the Bank
Hiring Jay Leno for a five-night-a-week gig at 10 p.m. probably wasn't always what NBC had in mind as a way to keep him. But times and network TV ratings being what they are, the hiring of Leno to take up five hours of primetime TV works. Whether his humor is your cup of tea is nothing near the point.
So what is the point? It's that signing Leno to so much primetime is a lay-up. It's five less hours of pesky programming that NBC has to manage year-after-year, through pilots and ratings shortfalls and tinkerings with the schedule. So, while its competitors -- with the exception of Fox -- struggle with 22 hours of unwieldy primetime slots to fill, NBC will probably truck along with Leno for years to come and only need to think about 17.
But what about the ratings? That's where this deal becomes particularly astute. People certainly won't watch the show with the same passion they do "Desperate Housewives" or "Grey's Anatomy," but it doesn't matter. Leno will in all likelihood deliver solid, not spectacular, ratings. But, in saving development and production costs, NBC won't have to hit as high a ratings bar on the show to make money. Think of it as the network investing in a CD rather than putting its money in some esoteric financial instrument that may or may not give it spectacular returns. The Leno deal, more than anything else, is an elegant solution to a math problem. The New York Times' Bill Carter, who broke the story, sums up the equation as follows:
Though Mr. Leno will command an enormous salary, probably more than $30 million a year, the cost of his show will be a fraction of what a network pays for dramas at 10 p.m. Those average about $3 million an episode. That adds up to $15 million a week to fill the 10 p.m. hour. Mr. Leno's show is expected to cost less than $2 million a week.As network TV ceases to be mass media, it has to rethink its business model, but don't look for the other networks to follow suit any time soon. NBC lucked into this situation, partly through its dubious decision to boot Leno out of "The Tonight Show" slot to make room for Conan O'Brien come June of next year. The upside of that deal was that NBC kept the younger, hipper O'Brien from jumping ship; the downside was that Leno, one of the hardest-working people in show business, has never seemed like the retiring type. The thought of him competing against O'Brien at ABC or Fox was probably too much for NBC execs to stomach. Mix in NBC's lackluster ratings performance over the last few seasons and an economic climate in which no one wants to spend money on anything, and you have the perfect stew in which to try out a five-night-a-week "early bird special" version of "The Tonight Show."In addition, NBC will get more weeks of original programming. Network dramas typically make 22 to 24 episodes a year. Under this deal, the executives involved in the discussions said, Mr. Leno will perform 46 weeks a year.
That cost differential will probably be enough for NBC to absorb any fall in ratings from its current slate of dramas.
When life gives you Leno, make Leno-nade.