Network News at a Crossroads

With news available more places than ever, on cable channels and Internet sites, and with revenue challenged by heavy dependence on shrinking advertising dollars, the future for the news divisions at ABC and CBS remains deeply insecure.

"Long term, it's going to get harder for these guys to exist as they are currently constructed, with the exception of NBC because it can offload the costs on MSNBC," Michael Nathanson, an industry analyst for Sanford C. Bernstein & Company, said. The economic problems facing ABC News and CBS News in many ways mirror those faced by newspapers, which have been similarly afflicted by a drop in advertising revenue. The reaction — severe cuts in personnel and other costs — also looks to be the same. But can you shrink your way to prosperity? Andrew Heyward, the former president of CBS News who is now a news media consultant (NBC News is one client), said of the ABC cuts: "The real issue after this is what is going to drive growth? How do you generate more profit? And this doesn't address that." The easy answer would seem to lie in NBC's structure, because in contrast to its competitors, that news organization is flush, making an estimated $400 million in profit a year.