The Economics of Jay Leno

[Commentary] If Comcast takes over NBC Universal, will Jay Leno return to 11:35 pm? That unimportant question is emblematic of the pending sale by GE of a controlling stake in its media properties to the cable giant. Mr. Leno was moved to 10 p.m. as a cost-saving gesture: Since his show is so cheap, GE can make money even after chasing away much of its audience for the high-end scripted shows that used to appear at that hour. As Mr. Leno explained in a candid interview with trade bible Broadcasting & Cable: "If you are making buggy whips and no one is buying buggies anymore, do you keep making buggy whips? I don't know. This is an economic decision." In Jack Welch's day, an employee perhaps would not have expounded so freely. Otherwise, however, GE is behaving like what it's always been, an unsentimental owner of a business that it no longer likes and doesn't know how to fix. Yet, truth be told, Comcast's shareholders don't want the job of fixing NBC either. Only the controlling Roberts family does—and then because the alternative may be having no great future as a prominent American business family. Ergo, a deal merging "content" and "distribution" seems inevitable, even though the track record of such deals is unpropitious. Bottom line, since a deal seems nearly certain to happen: Would a savvy media investor wish the Roberts family luck in their gamble? Absolutely. Would such an investor care to come along for the ride? Maybe not so much.