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By the Project for Excellence in Journalism

Three key trends stand out in the economics of network news:

  • After several years of sluggish or even declining ad revenues, all three evening newscasts showed signs of rebounding, at least in 2005, the latest year for which we have data.
  • Figures for morning news shows continue to solidify their position as the cash engines of the networks news divisions, though the rate of growth appears to be much less than it once was.
  • With news magazines, there doesn’t seem to be much consistency, with some programs faring much better than others.

Evening News Revenue

In the first three editions of this report, we discussed the difficulty of obtaining revenue and profit figures for network news divisions. They are small units inside large corporations, and there is no public reporting of their numbers. And even fewer Wall Street analysts track those units than once did. One way to assess the economic health of the news divisions is to examine the ad revenue data for individual programs. Even those numbers, however, must be viewed cautiously, for networks often bundle advertising dollars across different platforms. At NBC, for example, marketing dollars from one advertiser may be allocated to MSNBC,, the morning newscast, a magazine show and the evening

Indeed, the publicly available numbers raise several questions. In particular, the number totals and the ranks are probably not accurate. Every indication we have from industry insiders, for instance, is that NBC Nightly News is the ratings and profit leader. Yet in the data available from market research, that is not the case. It is best, probably, to consider the figures that are available as useful for the trends they indicate, not the totals they offer.

Those trends suggest that after a year of slow growth or in some cases none for the evening newscasts in 2004, ad revenues rebounded at all networks in 2005, the latest year with full data. Growth appeared strongest for ABC.

For 2005, figures from TNS Media Intelligence show that revenues for ABC’s World News rose 11%, to $168 million. That meant that World News’s ad revenues had rebounded every year since 2002 and were now, according to TNS, back to where they were at the beginning of the decade. So despite the small decline in audience (1 percent), revenues at ABC do not appear to be shrinking.

CBS Evening News, meanwhile, rose 9% over the year according to TNS data, to $162 million in ad revenue. That figure was also a 14% increase from 2000.

NBC Nightly News, according to TNS, saw the smallest revenue gains in 2005, just 3%, to $159 million. And the TNS data hint at a possible negative trend. They show NBC Evening News revenues down from where they were in 2000 by some 8%. It is simply impossible to know if that reflects an actual decline or a change in the way the network accounts for the numbers.

Privately, however, insiders tell PEJ that NBC is No. 1 in revenue and pre-tax earnings for its evening newscast. Being No. 1 in ratings typically translates into the ability to charge a premium for advertising on a program.

What about 2006? Preliminary data through mid-summer suggest more modest growth across the board. TNS estimates that CBS enjoyed a boost from rising ratings with Bob Schieffer, with revenues up 3% for the first nine months of the year. NBC Nightly News was flat. ABC World News was down slightly.2

But all of those preliminary figures came before the arrival of new anchors.

Evening News Revenue, by Network
Design Your Own Chart
Source: TNS Media Intelligence/CMR unpublished data,

The Prime-Time Component

As of late 2006, CBS and ABC were No. 1 and No. 2 in prime-time programming, with NBC third. For the 2006 fall season, CBS remained the most-watched network every week, and had four top 10 shows, according to rankings released in late November by Nielsen Media Research.

ABC, meanwhile, has had much success the last couple of years with entertainment programs such as Lost, Desperate Housewives, and Grey’s Anatomy. And its celebrity reality show, Dancing with the Stars, provided the lead-in when ABC News was the most-watched network on election night.

At NBC, on the other hand, 2006 was another sobering year. Until 2004, it had held the top spot for 17 of the last 20 years, boosted by such shows as Cheers, Seinfeld, and Friends. Since then, the network has fallen from first to fourth place and has struggled to find a hit to replace those programs. According to Broadcasting and Cable, NBC’s primetime ratings for the audience of 18-to-49-year-olds fell 15% in consecutive seasons since Friends wrapped up in 2004.3 And in October, it was reported that despite an increase of 6% in GE’s profits, its overall performance was weakened by NBC, where profits declined 10% in the third quarter of 2006 compared to the same period in 2005.

Morning News Economics

The morning news shows are still, for now, growing financially. In the latest full year for which there are data, 2005, all three programs saw growth in revenues, but for two of the networks, growth was much less than in earlier years.

At ABC and NBC, the morning news shows essentially bring in twice the ad revenue of the evening news, with half as much audience and a less serious diet of news. The basic reason is that they are on four times longer, turn over their audience several times during their two hours (three on NBC) and pack a lot of commercials and promotions into their shows. They also serve as a significant revenue stream to local stations and affiliates owned by the networks through the local news inserts of headlines and weather.

In 2005, the most recent year for which we have complete data, ABC’s Good Morning America was up 12% over the previous year to $591 million in ad revenue, according to data provided by TNS Media Intelligence.

NBC’s Today Show is an hour longer than its rivals and the ratings leader, but in 2005, before Katie Couric left, it showed signs of slowing down. Ad revenues grew, according to TNS data, by just 1% (TNS estimates to $555 million). A year earlier, in 2004, ad revenues were up 18% year to year. Again, however, this number is almost certainly higher, given that Today is the ratings leader and is on for an additional hour in many markets.

TNS estimated ad revenue at CBS’s Early Show to be up 6% ($264 million in 2005). A year earlier, TNS estimated revenue had grown 14%.4

That trend of robust growth at ABC’S Good Morning America, with slowdowns at Today on NBC and the Early Show on CBS, appeared to be continuing in 2006, according to the TNS data. Through the first eight months of 2006, Good Morning was up 12% to $426 million in ad revenue, Today revenues were estimated to be down 11% to $341 million and CBS morning revenues were flat at $182 million). But again, the figures should be evaluated cautiously because of bundling, and with anchor reshufflings occurring after figures for the eight months were collected by TNS Media Intelligence.

Morning News Revenue, by Network
Design Your Own Chart
Source: TNS Media Intelligence/CMR unpublished data,

News Magazine Economics

The economic picture for prime time news magazines appeared to be improving as well. Here, too, it is impossible to view advertising revenue as an absolute measure given ad bundling and other strategies, but there are some signs that surviving programs have benefited from the thinning of the herd since the category boomed in the late 1990s.

NBC’s “Dateline” is now the last of the magazine franchises producing two editions each week. Unfortunately, according to data from TNS, “Dateline’s” other distinction is the continuing decline of its advertising revenues. Over calendar year 2004, it earned $232.3 million in advertising revenue, down from $237 million in 2003, a 2% decline. But to keep things in perspective, that 2% is substantially less than the decline in the rest of NBC’s primetime schedule.

CBS’s “60 Minutes,” in contrast, climbed 21% in 2004 to $108 million in advertising revenue, from $89.3 million in 2003. Last year, we noted that some insiders suggested that the decline in “60 Minutes’s” 2003 advertising revenue and the apparent increase in the advertising revenues for “60 Minutes II” was caused by CBS’s decision to alter the ad rates for both broadcasts4 — in essence, boosting the new program at the expense of the flagship. That makes determining the size of “60 Minutes’s” rebound murkier.

Data from TNS shows that “60 Minutes II” (which alternated between being 60 Minutes II and 60 Minutes Wednesday and even changed its broadcast night) had a 12% decline in advertising revenue, from $70 million to just under $62 million. And while “60 Minutes II” was cancelled in September of 2005, a projection based on data from TNS indicates that the advertising revenues assigned to the program would have continued to decline.

The CBS News program “48 Hours Mystery” appears to be another sign of the network’s improving fortunes. The program’s advertising revenue has climbed 41% compared to calendar year 2003, moving from $55.7M to $78.5M.

In calendar year 2004, meanwhile, ABC’s “20/20” showed an ad revenue climb of 10%.

Three things make up a magazine show’s ratings success, network officials say: program content, the lead-in show that precedes it, and the show’s competition.

CBS’s “48 Hours” has benefited here. NBC’s “Dateline,” especially on Friday nights, suffered because it was up against a big CBS hit, “Ghost Whisperer.”

“Nightline,” which had a revenue drop in 2003, regained some ground in 2004. Revenue increased from $69.5 million in 2003 to $75 million in 2004. Projecting to the end of 2005, it appeared that that figure would hold. (Most of the year, of course, was the older single-topic format for “Nightline.” The new program was launched in November.)

News Magazine Revenue, Select Programs
Design Your Own Chart
Source: TNS Media Intelligence/CMR unpublished data,
* asterisk

The Message of ‘Nightline’

The case of “Nightline” deserves a moment for its implications about the economics of television journalism today, both in the move of Ted Koppel and a team of his producers to the cable channel Discovery and in their departure from ABC.

“If you want to do serious journalism in this country, this is the best place we could possibly find,” producer Tom Bettag was quoted as saying about Discovery.5 Something significant is at play here.6

Cable has a very different economic model from broadcast TV. Broadcast is financed entirely by advertising. Cable TV adds subscription fees to the mix —fees paid by cable operators and fees paid by individual households. Channels like Discovery that carry advertising often make half their revenue from fees paid by cable operators who want to include the channel in their system packages. Premium cable channels such as HBO are funded entirely by “premium” subscriptions paid directly by viewers.

Thus, any program that can tip the scales to make a cable operator treat a cable channel as indispensable can have huge financial value. Consider the impact the “Daily Show” with Jon Stewart had in raising the profile of Comedy Central.

In other words, a program that changes viewer perception of a channel can have a value in cable far beyond whatever ratings it gets for its own episodes. It can influence the brand.

In this sense, Koppel and Bettag may be doing more than finding a place to keep doing some documentaries. They may be trying to pioneer a new value for serious journalism elsewhere on television than where it currently exists.

If they are right, documentaries about major issues of the day, once a major element of network news departments but for so long their disappearing feature, could bring an economic value to cable.

That would represent a major change and add to the opportunity that Koppel, Bettag and their colleagues are pioneering.

Interestingly, Koppel made it clear that he thought the appropriate venue for this was not the traditional cable news channels (CNN, Fox News, MSNBC), which historically have not made a mark in documentaries. “I think there is a tendency on the part of some of the cable networks to be in a desperate race to be first with the obvious,” he said.7

Just as interesting is the fact that Koppel ended up at a standard cable channel, not a premium one. On a premium channel, where there are no commercials, a single program may be enough to tip a nonsubscriber into becoming a subscriber. How many people watch “Curb Your Enthusiasm” or “Deadwood” on HBO because they first subscribed to get the “Sopranos”? Koppel’s decision suggests that documentaries could do more to help a channel’s negotiations with cable operators than as a marketing tool to attract individual viewers.

The other implications of the “Nightline” situation relate to the reasons ABC wanted to scrap the program’s format, which led to Koppel’s leaving.

ABC executives had said they wanted a program that would appeal to younger audiences, something hipper and faster-paced, and that if “Nightline” couldn’t do that, it might be replaced with an entertainment show. Implicitly, the network is arguing that every program in network TV is now viewed as its own profit center. Whatever can maximize revenues in a given time slot is the goal. That was the signal that Disney sent in 2002 when it courted but failed to lure the comedian David Letterman to replace “Nightline.” Disney executives made it plain that if Letterman could earn more money for the network in that time slot, he was preferred.

In other words, while there are economies of scale, the notion that the sum of a network is greater than its parts is now much diminished. It used to be that way, when the government viewed broadcasters as public trustees who had an obligation to present news even if it was a loss leader. In the era of deregulation, that is no longer a concern. Koppel himself made it clear that that was his understanding now. ABC had once allowed him to do four prime-time documentaries a year, just as it allowed its prime anchor, Peter Jennings, to do several. “They were indulging me,” Koppel told the Washington Post upon signing with Discovery. “They were indulging Peter.” Tom Bettag then added, “And the days of indulging are just about over.”8

Adding to that is the excessive concern at the networks, Koppel and Bettag argued, with luring younger viewers because of the Madison Avenue conviction that they are the most valuable audience.9

Aside from what they say publicly, is this really how networks now operate? It is difficult to argue to the contrary. Adverse publicity might keep a network from changing its programming if it thought it would cast management negatively, be perceived as hurting credibility, or hurt the stock price. News accounts at the time quoted Letterman’s people as saying he did not want to be seen as the guy who killed “Nightline.” Would such negative publicity dissuade a network from killing a news program today?

That might be the case for only one particular program — the nightly newscast. A network might be loath to be the first to abandon airing that one even if it thought it could make more money producing something else in the same time slot. Given that all three networks run the evening news, the first one to kill the program would probably generate significant bad publicity and risk a public backlash. Decline or no, the combined evening news audience is still more than 25 million viewers.

But that might be the last exception now.

A second argument also floated above the “Nightline” case: Were Koppel and Bettag saying that network broadcasting in general was no longer a place where viewers could find serious long-form journalism at all — in any time slot?

That notion is probably an exaggeration.

Koppel himself never said that outright. The closest he came was in the New York Times, where the reporter Bill Carter noted: “Mr. Koppel said that no broadcast network would be interested in the kinds of programs he and his team wanted to make, which he said would occasionally take the form of one-hour documentary-style special followed by a two-hour town-meeting discussion. If he asked for three hours of prime time on ABC or even on a cable news network like CNN, Mr. Koppel said, he would have no chance of success. ‘That kind of programming simply doesn’t fit anymore’ on network television.”10

Certainly there isn’t much in the way of long-form documentaries, examining significant topics or events of the day, on commercial broadcasting. What is wrong with the health care system? Are drug companies helping or hurting the situation? Are the new Medicare reforms working? Is the situation in Iraq getting better? What effect will the war have on the U.S. economy?

Commercial broadcast television news was once an occasional place for just that kind of broad stock-taking. It has not been for some time. Partisan documentary theatrical movies, on the other hand, are now more popular than ever.

But while such programming is diminishing, it is probably unfair to suggest that there are no serious longer pieces on the networks at all of the kind to which “Nightline” used to devote 20 minutes or so. As we noted in earlier content reports such work does occur on programs such as “60 Minutes,” Sunday Morning and occasionally on certain topics by certain reporters on other prime-time magazines. It is shrinking. It seems too broad to say it is gone.


1. The nightly news programs on all networks run for half an hour and (in general) air at the same time. That allows for easy side-by-side comparison, but it will soon change. ABC has changed the model by airing three live over-the-air broadcasts in different time zones and one live Web-based edition.

2. Consider the following. In Broadcasting & Cable magazine’s 2006 annual revenue rankings, NBC’s network revenue sits below both CBS and ABC. According to those rankings, NBC’s 2005 network revenue dropped 23%, to $3.9 billion, from $5 billion in 2004. Both CBS and ABC, on the other hand, saw revenues rise, CBS’s by 5 percent, from $4.4 billion to $4.7 billion in 2005 (CBS was also ranked the No. 1 network). ABC’s revenue climbed 11 percent, from $3.5 billion to $3.9 billion.

A year earlier all three networks had seen revenue increases, NBC the biggest. Between 2003 and 2004, indeed, NBC enjoyed a 13.5% increase (climbing to $5 billion in 2004, up from some $4.5 billion the year before). Both CBS and ABC experienced revenue increases that year as well, but not nearly at the level of NBC. Several factors have most likely contributed to NBC’s abrupt slide. First, the network’s average prime-time viewership (9.1 million) is lower than either CBS (12.9 million) or ABC (10.3 million). Second, 2005 was not an Olympic year, so NBC was not able to capitalize on the cross-program draw the games offered in 2004 and will presumably offer the network in 2006. What remains to be seen is whether a rally for the network as a whole will benefit “Nightly News.” (John M. Higgins, “CBS: In the Money,” Broadcasting & Cable, January 8, 2006.) 3. To arrive at this estimate the total annual advertising revenue of a program was calculated by dividing that total by 12 months, then by an estimated 20 days per month, then by the number of hours a program ran, then by 60 minutes.

4. In the State of the News Media 2005 editions, we noted that 60 Minutes’ advertising revenue had dropped, from $97.6 million in calendar year 2002 to $89.3 million in 2003.

5. Gold, Matea, “Koppel will do in-depth shows for Discovery; Ex-Nightline anchor to focus on topics like international affairs, race, religion,” Los Angeles Times, Jan. 5, 2006

6. Koppel also agreed to do commentaries for National Public Radio and for the New York Times, both outlets that probably reflect similar news values to those Nightline tried to uphold when Koppel hosted the program at ABC.

7. Ibid.

8. Kurtz, Howard, “Ted Koppel and Nightline Crew Turn Down HBO for Discovery Deal,” Washington Post, Jan. 5, 2006

9. Ibid.

10. Bill Carter, ‘Ted Koppel and Crew to Join Discovery,” New York Times, Jan. 5, 2006 .