I missed this last week. And it’s important to MSNBC and NBC News for all sorts of reasons
A 600 million drop is nothing to sneeze at, if the figures in this report are accurate. There are two ways to approach a budget shortfall (and this is most definately a shortfall for NBC Universal), find new revenue streams or cut costs. As the options for new revenue for a TV Network are minimal, that mostly leaves cost cutting as the option. Unless you believe that shareholders would sit tight for a dropoff in profit margain if no cost cutting takes place?
So why does an NBC budget shortfall mean trouble may be brewing for MSNBC? Because, like it or not, News is one of the first things that gets considered for cost cutting when budget shortfalls hit networks. History is replete with corporate cost cutting assaults on network news divisions in order to boots the network’s bottom line. Larry Tish’s cost cutting war with CBS News in the late 80s was one of the more blatant examples, but by no means was it the only example.
NBC will probably start looking to doing some belt tightenting, which means NBC News and its ancillaries will be under close scrutiny. This means MSNBC will fall under the budget microscope. Although the network is nearly revenue neutral I believe, its status and current identity as an also ran in the cable news wars make it a prime target for cost cutting. The critical promotion budget (which needs a substantial increase in my opinion if MSNBC is ever to get out of the cellar), could get whacked bad. They could start laying off producers again and trying to work with a skeleton crew. They could blunt any further attempts to expand weekend coverage. They could cut the on air staff, which already is larger than it should be given the timeslots available. Basically everything could be on the table.
On the NBC News side, things that could be cut would be dollars used to promote MSNBC on NBC. If you’re a bean counter at NBC News and you see money being outlayed to some other network and you have to cut costs, are you going to want to continue paying for someone else’s promotion?
The problem is this is a slippery slope scenario. MSNBC has to cut its budget, it affects the on air programming. Viewers notice the effect. Some leave for other channels. That in turn drives down ad rates, which lowers income, which starts people thinking about further cuts to make up for the decline.
So that’s why anyone who watches MSNBC should be worried about NBC’s budget shortfall caused by its drop from #1 to #4 among the four networks.