CNBC Out In The Cold In Leaked NBC Memo

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An internal memo from NBCUniversal, celebrating the second anniversary of the company in its current incarnation, has been leaked.

The leaked memo, celebrating the successes the group achieved in 2012 is interesting in one regard. It fails to make any mention of the company’s finance and investing property CNBC.

CNBC Out In The Cold In Leaked NBC Memo

The memo, which is printed in its entirety below, take a verbose tour of the company’s offerings, their achievements in the last year and the roads used to get there. However, The document did not offer a hint of the existence of CNBC, a sign that something may have gone awry at one of the company’s most iconic properties.

CNBC has for years been regarded as one of the centerpieces of the NBCUniversal empire. That may be changing, recent reports, including one from the New York Daily News, have suggested that ratings for some of the cable channels top shows, including Squawk Box and Closing Bell, plummeted in 2012.

It clearly has not been a good year for CNBC, but for the company to be left out of a memo reflecting on 2012 things must have been simply awful. Ratings between December 2011 and December 2012 fell by 14%. In the highly sought after 25-54 demographic viewership fell by 15%. 2012 was the worst year for the company since 2005.

The only program to see growth for 2012 at CNBC was the documentary hour beginning at 10 p.m., all of the channel’s most important properties saw their ratings fall in the twelve months, and programs like Squawk Box have fallen to 2006 ratings levels. Something is wrong at CNBC.

The memo, signed by Steven Burke, the NBCUniversal CEO and President, stated that the firm has “changed our focus to look outward more, measuring ourselves against our competition and spending more time with our customers.” Reflecting about the company’s relationship to competition may be worthwile in relation to CNBC.

Fox Business, the property most directly competing with CNBC, showed a 2% rise in ratings for the year December 2011-Decemebr 2012. In the important demographic, 25-54, the firm showed an increase of 17%. The other major channel in the category is Bloomberg, which is not publicly rated.

NBC Universal is jointly owned between General Electric Company (NYSE:GE), and Comcast Corporation (NASDAQ:CMCSA). Apart from the ignorance of the company’s business channel, the memo extolls the virtues of the year 2012.

The full memo celebrating the year 2012 as it was, and ignoring CNBC, is printed in its entirety below.

———- Forwarded message ———-
From: Burke, Steve (NBCUniversal)
Sent: Monday, January 28, 2013 8:28 AM
To: NBCUniversal Employee Communications (NBCUniversal)
Subject: Second-Anniversary Update

As we mark the second anniversary of the new NBCUniversal, I want to share with you some reflections on the last year and outline our priorities for 2013.

By any measure, 2012 was a very successful year for NBCUniversal. We exceeded our financial goals for the year and made good progress on the objectives we shared with you last January. We are becoming a more unified, less siloed company. We are making it easier to do business, reducing bureaucracy and simplifying administrative tasks. We are starting to realize returns on our investments, particularly in the broadcast business. We have also changed our focus to look outward more, measuring ourselves against our competition and spending more time with our customers.

Acquisitions tend to succeed or fail in the first few years. Getting off to such a positive start bodes well for our future. Thank you for your hard work and dedication over the last two years. You should be proud of what we’ve accomplished together.

Many of our businesses had noteworthy achievements in 2012, but I will highlight four in particular.

First, under the direction of Bob Greenblatt and his team, NBC’s primetime performance has been extraordinary. Last fall we went from fourth to first in the ratings, something that has never been done before by NBC or any network. We know ratings will fall off without Sunday Night Football and The Voice, but we should end the season in second or third place, which represents a big swing in momentum and increased advertising revenue heading into next season.

NBC Sports is our second remarkable 2012 success story. Not long ago, the conventional wisdom was that the only way broadcast sports could make money would be to abandon properties like the Olympics and the NFL. Mark Lazarus and his team have proven that wrong. We have new long-term deals for both these important properties and for the first time in recent memory, on the strength of an amazing London Olympics and Sunday Night Football, NBC Sports was profitable in 2012.

The NBC Owned Stations group is the third big success story. This is another business that some said should be left to decline. Instead, we invested in our stations and under the leadership of Valari Staab and her team, our stations group has undergone a significant turnaround in ratings and financial performance.

Universal Parks is the final standout. Tom Williams led our parks group to a stellar 2012 and we see great potential in this business in the years ahead. The new Transformers ride has been an enormous success at Universal Studios Hollywood and will be opening in Orlando this year. In the not too distant future, the hugely successful Harry Potter attraction will be coming to Hollywood and Japan and expanding its existing footprint in Orlando.

These businesses deserve to be called out because they all had great years. Interestingly, not many people would have picked NBC Prime, NBC Sports, Owned Stations and Parks as big near-term growth opportunities. The important lesson is that we have the ability to transform even mature businesses if we invest and manage them intelligently.

We had other great successes in every division throughout the company. In film, we had a major hit in Ted, which became the highest-grossing original R-rated comedy ever. Lorax also did very well and Les Mis is a movie we can be very proud of for a long time to come. Universal Pictures had its best worldwide box office in the studio’s 100-year history, with global theatrical grosses of more than $3 billion and a slate that included seven movies that crossed the $200 million mark at the worldwide box office, more than any other studio.

There were many highlights in our cable networks group, which continues to be the heart of the company financially. USA was the highest-rated cable entertainment network for the seventh year in a row and Bravo had its seventh consecutive best year ever. E! and Style completed rebrands and continue to build on their momentum. This coming April, Syfy will make history with Defiance, the first-ever joint television show and online video game. In terms of ratings, Golf, mun2 and MSNBC were three of the five fastest-growing channels on television.

Our international team has been very active, finalizing smart deals to extend our reach around the world and making sure our cable channels, syndication, theatrical and home video groups work closely together to maximize our business wherever we operate.

NBC News made us all proud with the quality and depth of our coverage of the presidential elections and Democracy Plaza. During Hurricane Sandy our News Group provided vital storm information and was the most-watched news organization in the country.

Telemundo had a great 2012, both in terms of ratings growth and financial performance. Telemundo had a successful rebranding and it continues to be the largest producer of original Spanish-language primetime content in the U.S.

Fandango had a terrific year, setting new records in volume and profitability. In addition, we completed some important financial transactions in 2012, selling our stake in A&E Networks and acquiring from Microsoft the balance of that we didn’t already own.

Many of our 2012 successes were amplified because they were Symphony projects, our name for what happens when all of our assets come together to support a single initiative. We have a strong Symphony partner in Comcast Cable that helps promote our products to millions of Comcast subscribers, a unique competitive advantage that yields significant ratings and box-office gains.

We’ve also become a more diverse company, which is an important goal for us as well. We have a higher percentage of people of color and women in the total workforce and in senior positions than we did two years ago, and our progress on this front will continue.

As a final mention about 2012, the telethon we produced for victims of Hurricane Sandy was extraordinary for many reasons. With much of our own workforce in New York affected by the storm, in a very short timeframe we mobilized the entire company in an enormous effort to raise $23 million for the Red Cross. It was a very proud moment for us all.

Our goals for 2013 build upon our focus last year: First, investing smartly for growth. Our goal is to grow our businesses and this won’t happen without investment and good business and creative choices. Second, we need to continue to close the monetization gap between our share of viewership and our share of the revenue we receive. Third, managing new technologies which are creating new ways for consumers to access our products. Fourth, growing our digital businesses to focus our efforts and resources on assets where we can be a market leader, achieve scale and start to make significant money. Fifth, we need to continue to transform our culture so we operate as one company, acting as “owners not renters” and treating people the right way.

We shared these priorities with the senior leadership of our company a few days ago, and we are sharing them with you today because we want to be as transparent as possible about our focus and expectations.

As we move into 2013, we will build on what we have so successfully accomplished in our first two years. I hope you look forward to the future as we keep progressing toward our goal of making NBCUniversal the best and most successful content company in the world.

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