‘Tonight Show’ Layoffs, Leno’s Pay Cut, Kimmel’s New Timeslot! Is This the End of NBC’s Five-Decade Franchise? (ANALYSIS)

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Jay Leno had some unusually harsh words for his NBC bosses in his monologue on Monday night’s Tonight Show. But the public scolding was only fair; after all the network’s parent company, Comcast, had embarrassed him over the weekend with news that the show, still the most popular in late-night and a mainstay at NBC for more than 50 years, would undergo budget cuts so draconian that 20 staffers were losing their jobs and that Leno himself was taking a stiff pay cut to save the rest of his staff from the layoffs.

“Welcome to TheTonight Show, or as Comcast calls us, The Expendables.” he opened. He suggested that he didn’t understand why Comcast had targeted his show, saying, “We’ve consistently been No. 1 in the ratings, and if you know anything about our network, that kind of thing is frowned upon.” He also joked that he knew something was wrong when he woke up Friday to find an NBC peacock head in his bed, a la The Godfather.

Behind the laughs, however, the grim tidings backstage may have given him pause. Leno’s been around NBC long enough to know that when a late-night host and the network take their battle public, the result is usually ugly. Add to that today’s news that ABC is moving Jimmy Kimmel’s show to 11:35 to confront Leno directly, and viewers may well wonder: is this just the latest in a long line of late-night dustups, or is the very future of the 55-year-old franchise on the line?

What’s the Leno vs. Comcast battle really all about?

As initially reported at Deadline late Friday, Comcast was making the cuts and layoffs even though ad sales remain solid. The real problem, according to the Los Angeles Times, is that the show had been operating on a lavish budget, some $2.3 million a week, the same as it was during Leno’s failed primetime bid in 2009. The Times says the new budget will be more like $1.7 million per week. To save some staffers’ jobs, Leno agreed to take a pay cut from his estimated $30 million annual salary; the Times says he may now be earning as little as $20 million a year.

What’s curious about the Leno pay cut is that he could have taken an even bigger cut without having to sell off any of his famous vintage cars or to suffer any other infringement of his lavish lifestyle. That’s because, in 20 years, he’s never spent a penny of his NBC earnings; rather, he lives entirely off his lucrative weekend standup gigs in Las Vegas and around the country. Presumably, he could have taken an even bigger cut and saved the jobs of the 20 staffers who were let go.

But then, part of this could be an ego issue, as suggested by the wounded pride behind Leno’s monologue on Monday. If Comcast really needed to save money, it could have made the budget cuts discreetly, as CBS did a few years ago with The Late Show, with trims that included a pay cut for host David Letterman. Instead, the cuts became a big news story, big enough for Leno to respond at the opening of Monday’s show.

It could be that Comcast is throwing its weight around, making its presence known at the network it acquired in 2011. Every other star and writer at NBC has to be worried now about where the ax will fall next; after all, if the sacred Tonight and Leno aren’t safe, then who is?

Then again, NBC has a long history of airing its dirty laundry in public, especially when it comes to the battle over late-night turf. It’s a tradition going back 20 years, to when Leno elbowed Letterman out of the way in order to succeed the retiring Johnny Carson. It flared up agan in 2004, when NBC named Conan O’Brien the heir apparent to Tonight, essentially forcing Leno to agree to quit his perch in five years. And of course, there was open warfare in 2010 when Leno’s primetime show failed, and the network squeezed him back into late-night, forcing O’Brien to quit Tonight after just a few months on the job.

So this could all be a case of simple office politics. But what if it’s something worse? After all, the landscape is changing in late-night: it’s getting a lot more crowded. A few years ago, Leno had only CBS’ Letterman as a serious rival for the late-night throne. Now, he’ll also be facing off against Jimmy Kimmel on ABC, and not just after his own show has already been on for half an hour. According to The Hollywood Reporter, ABC will move JImmy Kimmel Live to 11:35, where it will directly confront Leno and Letterman. The shift, which will bump ABC’s Nightline to 12:35 fafter 33 years in the pre-midnight slot, is one ABC has been longing to make ever since Kimmel debuted a decade ago. That the network feels safe in making the move now attests not just to Kimmel’s growing popularity but also to the scent of blood in the water at NBC and CBS. Perhaps it’s not a coincidence that ABC announced the change, which doesn’t take place until January, just after NBC’s public display of weakness at Tonight.

Besides a newly vigorous Kimmel, Leno also faces challenges from O’Brien on TBS, Stephen Colbert on Comedy Central, Russell Brand on FX (only on Thursdays, but Thursday is still a big night for TV ad revenue because it’s when movie studios buy commercial time to promote their Friday releases), a syndicated show by old Leno rival Arsenio Hall (debuting next year), and Chelsea Handler on Comcast’s own E! channel. Many of these outlets weren’t even players in the late-night arena a few years ago. Now, they’re all vying for the same ad  dollars. Even if Leno remains the most popular guy on the field, the spoils of victory will be a lot more meager.

Leno seems to have been willing, over the years, to go along with every humiliating thing NBC management has ever asked of him (from making nice with local station managers to the six-year Conan debacle), biding his time because he seems to know he’ll still be there in the long run, while suits and competitors come and go. He’s a survivor. But the show itself may not be, and given the squeeze between outside competitors and his network’s own management, the Tonight Show may not survive in a form any of its long time viewers would recognize.

Watch Leno rip his parent company during Monday’s monologue.