In just seven months and amid an unrelenting pandemic, newly minted NBCUniversal CEO Jeff Shell has smashed the walls between the company’s broadcast and cable operations, tossed out rotten apples and positioned the Comcast-owned media giant for whatever awaits on the other side of the global health crisis.
On Thursday, he did a few of those things rolled into one: He ousted NBC Entertainment chief Paul Telegdy while beginning a wide-scale restructure of the TV business. And he’s still not finished putting his stamp on the company since taking over for Steve Burke.
“Jeff’s thinking is: ‘How can I make big changes?’” one former NBCU exec told TheWrap. “Whenever they let him, he’ll do it.”
Shell wasted no time shaking up the company’s status quo. He’s had a lot to contend with during his brief tenure as CEO, from both inside his own company and the business at large, which has been rocked by the coronavirus pandemic and a self-reckoning over systemic racism. Shell himself contracted the disease earlier this year.
Andy Lack, Jeff Shell and Paul Telegdy (Getty Images)
Thursday’s realignment was the second major shakeup for the TV and streaming division this year. At the same time, he got rid of Telegdy less than a week after damaging accusations of workplace misconduct and fostering a “traumatic” environment during a lengthy tenure that included nine years as head of its unscripted department.
Telegdy wasn’t the first rotten apple to get tossed outside. In May, a little more than three months into Shell’s tenure, Andy Lack stepped down as NBC News Group president. Lack had a similarly tumultuous tenure that included accusations that he, along with NBC News president Noah Oppenheim, muzzled Ronan Farrow’s story on Harvey Weinstein and failed to address similar accusations against Matt Lauer. Shell didn’t simply replace Lack; he reformed NBC News’ entire news division under Telemundo’s Cesar Conde, who now runs a more unified division as NBCUniversal News Group chairman.
The new structure announced Thursday, while carving out an official streaming division under Peacock chief Matt Strauss, also aligned the NBC broadcast network with the company’s cable networks, while at the same separating the overall business and programming operations. Francis Berwick was promoted to run the business side, heading up strategy and content spending, while the content creation side will be a separate division.
Some industry observers suggested that Shell’s reorganization plan was moved earlier than originally planned because of the pressure to remove Telegdy. And because of that rushed timetable, not all of the pieces were fully in place — including the lead executive for the content development unit. Also up in the air is the fate of Meredith Ahr, NBCU’s alternative programming head who was named by several Telegdy accusers as enabling his bad behavior. (Ahr has described the accusations as “false.”) Despite Telegdy’s exit, that investigation continues.
“They came up with a structure and are filling it with bodies,” said the executive, who knows NBCUniversal well.
That executive also questioned the decision to separate a content programming group with the business responsibilities that now lie with Berwick. According to Thursday’s announcement, Berwick will determine programming strategy, the “content spend” — i.e. greenlighting TV shows, plus the schedule and marketing choices. “If she’s in charge of the ‘content spend,’ she’s pretty much in charge,” the executive said. “You can’t separate programs from scheduling and marketing. That never ever works. This is a problem.”
NBCU insists the to-be-hired executive will be in charge of the development teams.
Jeff Shell at the 2018 premiere of “Halloween” (Getty Images)
Shell overhaul of virtually all of NBCUniversal’s business operations is noteworthy in part because he was able to do so inside a large media company where changes are usually done at a snail’s pace. “The institutional dynamics generally for big monolithic companies dictate that change is slow, and slow to be enacted,” comScore analyst Paul Dergarabedian says. “When anyone starts fresh in a new company in the new situation, they want to be incredibly dynamic and show their worth right away.”
Not only that, but Shell has been one of the few executives to quickly course-correct bad workplace environments.
“It’s better bottom-line business focus to actually be avoiding all of these bombs. So I give him lots of credit for actually trying to get out there and reorganize,” Lisen Stromberg, CEO of PrismWork, a workplace culture consultancy, told TheWrap. “We’ve been shifting from what was acceptable in what I call 20th century workplaces and what truly is going to make us survive and thrive in the new world of work. And leaders like Jeff who are cleaning house are saying this is unacceptable.”
Before Shell ascended to the top job at NBCU, he ran the Universal Film Group division for many years. The pandemic, which has shuttered theaters since March and upended virtually an entire business model, also afforded a chance to rethink how movies should be distributed in a post-pandemic future.
“The universe sort of gave everyone the opportunity to make big changes,” Dergarabedian says.
And Shell has not been afraid to draw the ire of those across the aisle. Universal became the first studio to bypass theaters for streaming directly with “Trolls World Tour,” which earned $100 million in digital rental fees within its first three weeks last spring. Shell then hinted that he would consider giving more of its films the direct-to-streaming route, which received swift backlash from theater owners who threatened to boycott Universal’s films.
Last week, Shell cut a deal with the nation’s biggest cinema chain, AMC Theatres, that drastically shortens the length of time theaters have before a new release is made available for video on demand. The new agreement will allow AMC movie theaters to have Universal feature films exclusively for 17 days. After that window closes, Universal will have the option to leave a movie in theaters or pull it for streaming, with AMC getting an undisclosed share of the PVOD revenues.
Rival theater chains quickly objected, with Cineworld CEO Mooky Greidinger calling the deal a “wrong move” and saying, “We do not see any business sense in this model.”
But it’s all about positioning NBCU for what lies ahead. After all, nobody thought Disney would decide to release its mega-budget “Mulan” over streaming. Shell is trying to keep NBCU ahead of the curve — at a time when the pandemic has decimated revenues for every media company. (NBCUniversal’s revenue sank 25.4% during the second quarter, with filmed entertainment declining 18.1% and cable TV dropping 14.7%.)
“He’s about the long term,” the former NBCU exec said. “He knows the current status quo is not the plan.”
Jennifer Maas contributed to this story.
