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NBC’s troubles go beyond Today

By
Dan Mitchell
Dan Mitchell
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By
Dan Mitchell
Dan Mitchell
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June 25, 2012, 10:49 AM ET

FORTUNE — There are almost too many ways to cast the box-office bomb Battleship as a metaphor for the plight of Comcast-controlled NBC Universal (CMCSA). Nobody’s about to sink the media giant, of course. But it is taking heavy fire — port, starboard, fore and aft.

The movie with the silly premise isn’t the only recent failure at the movie studio. The Five-Year Engagement also showed feeble box office. Battleship, though, is a huge loser — taking in just $299 million worldwide and a paltry $63.12 million domestically, according to Box Office Mojo. It cost some $209 million to make. (About half of ticket receipts go to studios.)

There has been some good news at Universal Studios: Dr. Seuss’ The Lorax did well, as did Safe House. At the beginning of June, Comcast CEO Brian Roberts said he was hopeful about the prospects for Snow White and the Huntsman, which opened a couple of weeks later. His hope was well-placed; the movie has also performed.

But he was saying so while telling investors at a conference that he expects a down first half for NBCU. There is trouble in the news division and at USA Network — as well as at NBC Entertainment, which Roberts said will “take years” to turn around.

The news division is still on top of the game, but the distance between it and its rivals is narrowing. Ratings are down for Meet the Press, Nightly News, and, worst of all, the Today show, which recently lost to Good Morning America for the first time in 16 years. The division “appears adrift” and is “more vulnerable than it has been in years,” declared Brian Stelter, the New York Times TV reporter. Former NBC News chief Bill Wheatley told Stelter that “the network is in bad shape.”

Of course, these travails are relative. NBC News is still the network leader even though things appear chaotic at Today with the apparently imminent ouster of host Ann Curry. (NBC News’ PR bungling hasn’t helped.)  The network asserts that ratings are solid with the 25-to-54 demographic, and the show still brings in so much money — reportedly about $200 million a year in earnings — that it effectively subsidizes the rest of the division.

Meanwhile, USA Network saw its ratings decline by 10% in the second quarter as its schedule of reruns and WWE wrestling (along with some original series) lost out to the NBA finals. That happens every year, but it was worse this year than usual. Still, the network has been No. 1 in primetime basic cable for six years, and its programming isn’t the kind that viewers suddenly turn away from en masse.

NBCU is strategically stymied in that most of the money it throws off is going to pay off General Electric (GE) for the 40% of the company still held by that company. That process will be complete in five years or so, but until then, NBCU won’t be making any big acquisitions. At the same time, the deal with GE allows Comcast to keep 50% of all appreciation in asset values from the time of the initial sale, so the company has a big incentive to keep investing in the assets it has. Just don’t look for any of those investments to include making a movie out of a board game from the ’70s.

About the Author
By Dan Mitchell
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