NBC Comes Clean: The Strike DOES Matter

I'm not only a writer, I'm a GE shareholder! And I think GE's CEO Jeff Immelt deserves a lot of credit for telling the truth yesterday: The strike is hurting NBC. The negative buzz about NBC's fortunes had built for days, and Jeff Immelt faced it directly with a minimum of spin:
While some media companies have denied the "Hollywood" writers' strike will hurt profits short-term, General Electric CEO Jeff Immelt said Tuesday that it's already having an impact at NBC Universal--and GE cut profit projections for the fourth quarter there. ... GE had projected a 10% to 15% growth in segment profit at its NBCU unit in the fourth quarter, but Tuesday Immelt said it will come in at the 10% low end, citing the "impact of the strike." ... GE's downgrade was striking, since NBCU competitors have denied the strike would have a negative impact for some time. News Corp. COO Peter Chernin even said: "My guess is that during fiscal '08, a strike is probably a positive for the company."
Separately, this Reuters article claims that CBS and ABC are also in trouble, just not as much. Of course, come "Idol" season, the other networks' situation could become catastrophic. With minimal competition from original programming, "American Idol" seems poised to demolish the other networks as never before. The Reuters piece includes, finally, an assessment of the strike from Shari Anne Brill, The Most Quoted Woman in Media™! I can't believe I haven't seen her show up in strike coverage until now.
Shari Anne Brill, senior vice president and director of programming for media buying agency Carat USA, said advertisers are growing increasingly worried about the ratings impact of a prolonged strike.

"Clients are in an upset state without knowing what's six weeks away. We have (programming) schedules through January, but nothing is really set for the month of February," [Aaron] Cohen said.

"Ad agencies have to negotiate with networks for revised schedules based on current strike replacement programming and get client approval for the revised schedule. We're working on a month-to-month basis," he added.

Brill said the advertisers placed their money on different expectations.

"If the networks are in this ratings under-delivery situation now, it could only worsen in the event of a prolonged strike," Brill said.

"Advertisers generally prefer to be in scripted content, and will not readily accept being put into lower-quality reality fare when their upfront dollars were spent on the expectation of being placed in quality scripted content," she said.


Thomas Cunningham said...

Let's hope that this means that Mr. Counter's days are numbered and he's replaced by someone who doesn't view this as a war and will turn it back to what it's supposed to be: a negotiation.

The writers' strength is knowing that suffering now will be for the best in the long run. Whereas the AMPTP is a collection of competitors all with different agendas and all of them have shareholders to answer to.

Kinda ironic... the fact that the corporations only care about the bottom line and not what's fair and yet they're also slaves to the bottom line.

Tough break, Nick and cronies, your shareholder bosses aren't going to let you waste more money beating the writers than it will cost to make a fair deal.

Live by the suit, die by the suit.

Joe Public said...

Kind of hard to believe that the AMPTP folks just don't know or care how foolish they look in the eyes and minds of the rest of the world. I'm not seeing support for their position anywhere but in their own minds.

I hope AMPTP insurance covers psychiatric care. They sure can use some.

hotline said...

First network to stand up for us - I will write you a kick-ass pilot for free and I will wash your car for a month!

intrigued said...

LOL, you guys just don't get it!!!
The studio/network execs DO NOT CARE about public opinion!!!

And in case you missed it...
GE's profits were up this year and they're paying a hefty divend and buyback! This means the shareholders ARE VERY VERY HAPPY!!!

hotline said...

Intrigued -

Cruise ships don't spring a leak and sink immediately. It takes a bit of time before the bow disappears into the abyss. The SS NBC is starting to take on water.

And if I remember correctly, you're a business guy, but not in this business. Why are you reveling so much in the thought of the writers suffering? Who hurt you? Get some therapy and figure it out or on your deathbed you're going to be calling out the name of your best friend Rosebud.

Krono said...


...and GE cut profit projections for the fourth quarter there. ... GE had projected a 10% to 15% growth in segment profit at its NBCU unit in the fourth quarter, but Tuesday Immelt said it will come in at the 10% low end, citing the "impact of the strike." ... GE's downgrade was striking, since NBCU competitors have denied the strike would have a negative impact for some time.

Not to mention that investors really don't like it when companies don't meet projections.

"If the networks are in this ratings under-delivery situation now, it could only worsen in the event of a prolonged strike," Brill said.

"Advertisers generally prefer to be in scripted content, and will not readily accept being put into lower-quality reality fare when their upfront dollars were spent on the expectation of being placed in quality scripted content," she said.

And apparently advertisers aren't too fond of their ads being on reality shows rather than standard scripted shows. Kinda hard to keep ad revenue up when advertisers are unhappy that the best you can offer isn't the type of show they want.

Carrie V said...

If corporations didn't care what the public thought media congloms wouldn't be spinning so hard in the news and hiring crisis management firms. They care because one of the single greatest factors in a stock price is perception. The media congloms are acting as if they don't care to try and weaken WGA resolve. They are acting as if the strike isn't hurting them to try and buoy stock prices. But it's still an act.

Frustrated Bystander said...

It's so very interesting that Conglom Networks feel Reality can replace scripted one hours, but Variety's 12/12/07 Nielsen's Rating Report numbers don't lie. The best numbers Fox put out for Week 11 was with "House," their one hour scripted. And when you look at the top five shows in the 18-49 demographics, the only "reality" show that rates is "Monday Night Football."

It'll be interesting to see what happens during February Sweeps and what gets produced and bought for Upfronts. Amazing that the AMPTP has their "nuclear" plan in full force. I dearly would love for WGA's reasonable requests for internet to be honored, and everyone goes back to doing what they love...making TV. The only "pattern" I see is "shut down" and a "Tonya Harding whack at the knee" with the networks hamstringing each other, courtesy of the AMPTP, at this rate. Hey, but the ratings game is not my problem. Too bad the AMPTP table is saying, "Can't see it from my house."

Julie O'Hora said...

It's a sad day when the words "a minimum of spin" make my heart leap...

Frustrated Bystander said...

Wow -- just read today's Variety. NBCU says they're scrapping their Radio City Upfront. Looks like the Congloms had a re-structuring agenda after all. I wonder if the advertisers were informed? WGA keep on trucking.

Don't back down on New Media at all and raise DVD. The other new adjustment, on the table, in my mind is now a shift in the basic minimums. With this quote: "We're going to lose a number of episodes this season, which means we won't be able to amortize the costs of these episodes....If the strike goes on long enough, studios will lose millions in DVD and international revenue. We're never going to get that money back, so we're going to have to demand that the shows make it up next season." Welcome to the world of the cable model and shows under-budgeted at 1.6 million. UPM/Line Producers, you've got your work cut out for you when the Nets start asking for those big car chases and action sequences at a "that gets you one window pane" budget. And if the US dollar ever gets better, welcome to more runaway productions.

Under that 1.6 million show budget, BTL's say goodbye to B and C camera units. Expect slashes to hair, costume and the art department. Two editors per show instead of three...and maybe a new economic partnership of 70 hour weeks instead of 60 hour weeks. Hello to tight construction budgets, etcetera, etcetera. And note, what's not being cut? Middle management executives and the high end bloaters who are gouging what the audience will seeing on the small screen in years to come.

The good news, though, is the Nets admit they are going to be hurting for scripts and show ideas when it comes time to re-launch the TV season in '09 under their "new economic model."

Stay strong WGA. They are not just slashing writers, they are slashing everyone. Do not buckle.

intrigued said...


Im not reveling in anything.

Im just pointing out the fact the tone of this article is to suggest that the company is hurting, when in fact GE reported billions in profits this year and even a profit from NBCU (even if it was at the low end of projections). The fact is that even if the strike hurt NBCU's 4th qtr it is FAR from concerning investors who were told they will be recieving billions in diviends and buybacks in the next few months. (ie NO INVESTOR WILL BE COMPALIAING NOR DUMPING GE STOCK ANYTIME SOOON)

So, you can nix the argument that the moguls are feeling pressure from investors (esp if the others report earnings anywhere near what GE did).

I dont want you to suffer, I want you to realize this strike is not placing pressure on the moguls as you thought it would. (where are they again? Oh yeah, enjoying their holiday vacation with their families).

intrigued said...
This comment has been removed by the author.
T said...

intrigued, you obviously have no idea how wall street works. It doesn't matter that GE makes millions of dollars of profit. Not at all. It only matters if they meet, fail to meet, or exceed investors previous expectations.

That is it. If they make a trillion dollars in profit they are still failing miserably if investors expected two trillion.

NBCU and GE are not living up to investors' expectations, therefore the strike is seriously hurting them and will be hurting the rest of the congloms as well.

intrigued said...


i can assure you that 99% of public corporations DO NOT care about public perception.

the reason they hire outside PR fimrs to deal with situations like these is because they are NOt concerned about and dont chose to deal with so they outsource and let someone be bothered with the what the public thinks.

also the PR firms are hired not so much to convince the public as to protect their employees who have contact with friends and family (that are part of the general public)

as long as you keep believing that the moguls care about public opinion - YOU WILL LOSE! Because you are fighting a battle only you care about!

Use some common sense, do you think anybody in their right mind believes that the AMPTP as negotiately fairly with the WGA??? Their tactics tell you that they do not care about public opinion because they are so overt in how they are shutting you OUT in this negotiation!!!

And one last thing, do not think they have stopped negotiating because they left the table. THAT IS PART OF NEGOTIATING!!! Buys them time and forces the other side to make the next move (ie concession to bring them back)

intrigued said...


I understand exactly how wall street works! I know it VERY WELL.

You mention investors only care about meeting or not-meeting expectations. GE exceeded expectations!!! since NBCU does not trade independent of GE what happens there is of no consequence to investors as long as GE as a whole performs (furthermore NBCU as a unit met its expectations as well even if on the low end)

You don't won't to challenge me on this, you are in my wheelhouse now!!!

If you don't want to take my word for it, check GE's stock price since the earnning announcement!
(to assit you if the stock price is up investor's are happy with company's current performance and future outlook)

T said...

From a market wrap-up on Dec 11th:

"In other news, General Electric (NYSE:GE) released the company’s 4th quarter earnings forecast, which came in between 67 and 69 cents per share while analysts’, on average, estimated earnings of 68 cents per share. The company, however, did raise their dividend by 11% and announced a share repurchase plan of $15 billion. General Electric (NYSE:GE) shares closed down 1% to $37.03."

Let's see, They basically met expectations, signaled internal confidence by announcing the buybacks and then closed down. Yeah. Sounds like investor confidence to me.

Whatever, dude. They have lost 7% on the stock price since the strike started.

And past performance means nothing.

Phineas Gage said...

Apparently Mr. Immelt didn't see Gavin Polone's analysis detailing how the strike will increase studio profitability in the short run.

Carrie V said...

Right, so companies don't care about public perception because they spend millions of dollars on specialist to deal with public perception. By your logic n Proctor and Gamble must not really care about advertising because they outsource that to advertising agencies. They must do that so that shareholders just THINK they're trying to sell products. Oh wait no that can't be because they don't care about perception. So they must really be trying to sell to the consumer. And when companies hire crisis management PR consultants it must because they really are trying to shape public perception. Now why would that be? Oh I know it's because public perception does matter.

intrigued said...


im not going to waste my breath debating the stock market with you. because clearly you just read the headlines and don't understand the true valuations.

i will reply with 2 things and im done...
1) dividends and buybacks are how corporations pay their investors!!! This is a perk that investors LOVE!!! companies must be flush with cash in order to return money to their investors in this form (most corporations cannot afford to do this or do it on a very small scale - check it out)
2) I like how you try to not that the stock is off 7% since the strike started. 7% really over 2 months in a shaky market (i assuem your numbers are right not even worth me checking) this is hardly a sign of investor inconfidence. Let me point you in a direction of a company that is feeling the heart of a threatened strike by one of its employee groups. Have you ever heard of American Airlines??? There pilots have not went on strike but have been threatening to do so for a couple months. Check out how American's stock has performed recently, that will give you an idea of how the market responds when investor's are concerned over a labor dispute!!! (it's way more than 7 percent and thats just from a threat of strike no actual work stoppage for some perspective)

intrigued said...


furthermore, considering that the strike has no affecting actual programming yet...

any financial results being reported by any of these companies does reflect how the strike has affected the business (either positive or negative)

the stock price would however reflect the forward looking concerns of the investors

Unknown said...

I understand the reasons for the strike. They are fair. People want more money. I get it.

But something doesn´t make sense. They want more money, so they just stop working...hoping the employers will eventually realize they are irreplaceable and at the end will deliver what they want. This is a hostage situation, they kidnapped our shows and unless they get what they want...

It is just sad really. In a simpler time, when you were not happy with your job/paycheck, one would just ask for a raise, switch jobs or quit. That is life. Or was. The strike is good for nobody and is hurting pretty much everyone.

Here is a thought. How about a viewer's strike? We don´t turn on the TV anymore and we will see what happens.

T said...

intrigued, I'm not sure why you are arguing with me. GE and NBC are the ones saying that the strike is hurting them. They are the ones lowering projections. These lowered projections will cause the stock price to drop. I don't see how this is that difficult to understand.

Wonder Boy said...

This strike will be settled by one person and one person only. Sumner Redstone. At some point the thought of Rupert Murdoch kicking his ass all over the spring TV schedule and further weakening his current perception as the crazy old head of Viacom, will become unbearable.

Visions of getting his CSIs back on the air to counter Idol will cause him to break ranks and cut a deal. He is the only mogul who is in a dire situation. His firing of the Toms (Cruise and Freston) made him look properly senile to his shareholders and he knows it. Rupert has been itching for this strike for a year to drive a stake in Sumner's thrice jump started ticker and finish him, so he can urinate on his grave.

My fear is that Sumner actually does die soon, creating a power struggle at Viacom that prevents them from breaking ranks and settling this nonsense.

Carrie V said...

Eduardo first they didn't just stop working out of thin air. There was a couple of months of talks between AMPTP and WGA. WGA presented their demands AMPTP offered nothing. Then there was a strike. If it were as easy as asking the company nicely for a fair deal on New Media then WGA wouldn't be on strike. Unless of course the writers, when told no, is supposed to be "okay thanks for listening. Can't wait for my work to generate millions of more dollars for you and be left behind as the media business changes. Talk to you again in three years"

And in what golden age did employees just say hey I want to unionize and employers were like "hey I think it's a great idea for you workers to join forces and speak with a collective voice so I will pay attention to your needs for a 40 hour work week, overtime pay, health care, and worker safety"

I mean weren't the writers in the 1930's lucky they only had to demand union recognition for 9 years before they had an agreement. And too bad the TV writers of the 1950's who never saw residuals from their work, had to eventually go on strike when they could just ask for them.

Ah the halcyon days. Too bad they never existed.

Krono said...


The thing is, regardless of GE still posting great profits, the NBCU section still came in at the absolute minimum of it's projections due to the strike.

That is the strike having an effect, which the studios would have people believe that it isn't doing. Given that I've seen a company's stock drop after missing their projected growth by 1 cent per share, that the strike is already having an impact on profit growth is something NBC should be concerned about.

It's particularly not good in light of the advertisers being unhappy. They want good old written by writers shows for their ads, but there's none to offer while the strike is going on. So they aren't going to be willing to pay as much to air their ads either. That's gonna be cutting into profits as well.

The bottom line is that this is a crack. Sure NBCU can paper over it for a while yet, but it's a crack the studios would rather not admit exists at all.

ChuckT said...

Frustrated Bystander, your Neilson numbers are cute, but for a more accurate perspective of how scripted tv has declined and been replaced by reality tv compare today's neilson's with those of only 5 years ago. How many top 10 shows were scripted compared to today? Over 35% of tv is reality. Anyone who denies scripted tv is dying an agonizing death is in deep denial (does anyone even remember what the hell a sitcom is anymore)?

And as far as the shareholders and advertisers, these are not naive people. They KNOW that this will be settled by the middle of next year. They also understand that by waiting it out, they stand to gain more in the long run (something the WGA should learn).

NBC is not GE's bottom line. And as far as NBC's woes, they were in decline LONG before this strike (could it be because their scripted shows are crap? how about "Heroes" which lost MILLIONS of viewers in only its second season? That's brilliant writing for you).

intrigued said...


you were so right. the strike is killing GE. that's why today (dec 14) Fortune Magazine named GE one of the 10 best stocks for 2008!!!

GE stockholders will be revolting anyday now!!!

shalyngirl said...

Dear John

Hi. Thanks for the publicity. I had no idea I was the most "quoted woman in media" I work for one of the largest media buying organizations in the world. I publish Broadcast & Video Beat, a weekly newsletter that gets sent to our advertiser clients, our staffers and the press. I am often sought out by the press regarding my insights into the Television medium While our editorial focus has been mostly on ratings peformance and programming trends,all we're doing lately is providing our client with writers strike updates with regard to the soon-to-be-scarce availabilty of quality scripted content. While I am not allowed to take sides (for reasons that should be obvious), I believe that everyone who works hard at their craft (myself included) should be paid a fair buck. I hope that both sides can get back to the negotiating table ASAP and work out an agreement that's fair and equitable to all.