Mired behind its rival networks, NBC seeks a winning formula
The NBC brass reside under tight security on the sixth floor of the RCA Building in Manhattan. To one side are the offices of the chairman and the president, an area referred to by nervous underlings as "the court of the Borgias." The senior executive offices are on the other side, along a stark corridor lined with a tan carpet. With its plain white office doors and antiseptic ambience, a visitor observed last week, the place has the look of a hospital. "No," replied an NBC executive. "It is more like an insane asylum."
Paranoia has been running at a high level in the executive suite for months, and last week's events were hardly likely to reduce it. The final Nielsen ratings for the regular 1978-79 television season gave NBC its worst average in more than a decade. Johnny Carson, the brightest star in the insomniac firmament, was keeping network nabobs awake at night wondering whether he would indeed quit the Tonight Show before his contract runs out in April 1981. An embezzlement scandal was boiling, affiliate stations were restless and gossip was rampant. Parent Company RCA laid it all on the bottom line at its annual meeting last Tuesday. Referring to "the very low ratings of NBC programs over the past month to month and a half," RCA President and Chief Executive Edgar H. Griffiths reversed a more optimistic earlier estimate and declared: "Profit for NBC will be substantially below that of the prior year."
As RCA's most visible subsidiary, NBC does much to shape the public's perception of the $6.6 billion conglomerate (electronics, vehicle renting, communications, food processing, records). So far, despite NBC's long stay in the ratings cellar, the stockholders have shown restraint, probably because in the TV business even last-place networks do very nicely. Although pretax profits dropped 20% last year, NBC still earned $122.1 million.
But demands for higher earnings will undoubtedly grow during the fall season unless ratings are on the upswing. By then, Fred Silverman, 41, NBC's $1 million-a-year president, will have had ample opportunity to work his programming magic, if he has any left. For Silverman, who made his reputation at CBS and ABC, the task is formidable. Past NBC programmers failed to foresee the impact that the post-World War II baby boom would have on the industry. When the network belatedly went after the youth market in 1974, it managed to alienate a goodly portion of its once loyal older audience. Subsequent programming regimes sacrificed long-term ratings stability to score quick fixes with movies, miniseries, and other expensive ($1 million vs. $500,000 for a series episode) specials.
NBC had been a prodigious profit cow for RCA in recent years, regularly furnishing about one-quarter of pretax earnings and in 1975 supplying 31%. But the milk was growing watery. By the end of 1978, NBC's pretax profit contribution dropped to 17.6%, less than two other RCA divisions. So Griffiths—"Bottom Line Ed," as he is known at RCA—went out and hired "the man with the golden gut," Fred Silverman.