You might have thought that after weeks of boosterism leading up to the presidential election, breathless reporting of Kamala Harris’ last minute surge in the polls, channel-wide optimism that women, brown and Black people were poised to reject Donald Trump a second time — only to be found dead wrong — that MSNBC would be in a moment of crisis.
But you’d be wrong.
Instead of reexamining its news practices after months of relentless pro-Harris coverage that seems to have wildly underestimated voters’ economic anger, a cultural backlash and Latino surge for Trump, insiders at MSNBC are feeling confident.
WaxWord spoke to a half-dozen individuals at MSNBC and NBCUniversal and the conclusion was consistent: MSNBC is fine, despite criticism from media observers like Bill Maher or Jay Rosen or myself, and a steep drop in ratings. There is nothing wrong with the brand. The audience is extremely loyal and likes the dog food that is being served.
The fact that MSNBC’s ratings have dropped like a stone after the election — down 48% in primetime and 38% overall — while Fox News’ ratings have seen a 41% boost in total day viewership, does not seem to be making an impression internally.
One senior MSNBC insider explained that ratings always fall after the excitement leading up to election, and that viewers would be back. “It was anticipated that (ratings) would drop after the election because of the cyclical nature of the event,” said this executive. “That was not a surprise. And then they come back.”
Said a senior insider at NBCUniversal: “I don’t know that this (drop) is impacted by politics in any direction. It’s a very strong brand. And it’s been growing for some time.” The executive, however, could not really explain why Fox News’ ratings would be up, given a parallel circumstance.
CNN’s ratings have also cratered, although a little less steeply, and there is some evidence that news consumers disappointed by the election result are tuning out across the board.
“I pretty much stopped on a dime” after the election, said MSNBC viewer Brandon Wilson, a professor in California. As the Washington Post article for which he was interviewed noted: “It was the Monday-morning quarterbacking he couldn’t stand; he felt it was too early to nitpick about how Harris had run her campaign, and he found ‘the finger-pointing and bashing of the Democratic Party’ to be counterproductive.”
Wilson is not alone. I personally felt like I couldn’t listen to the same so-called “experts” weigh in when they were so wrong in their conclusions, for a second time, as I wrote previously. I have heard from dozens of people who have said they’ve tuned out, each for their own reasons.
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But there’s a good reason why the good folks at MSNBC are not worried. In a coincidental move driven by the decline of cable television and divorced from politics and media, Comcast announced last week that it would spin out most of its cable channels, including MSNBC and CNBC, into a standalone, public company.
And it turns out that the new company, SpinCo, not only will drive about $7 billion in revenue based on current performance of those channels, but – according to a knowledgeable individual – throw off up to $2.5 billion in EBITDA.
What’s more, $1 billion of that EBITDA comes from the two news channels, about evenly split, this individual said.
The reason for that cash flow comes from the lucrative business of cable subscribers and carriage agreements. NBCUniversal — and now SpinCo — receives a monthly fee from the likes of Charter, Comcast and other cable providers, for each subscriber. Advertising, which is more susceptible to ratings, is only about 30% of MSNBC’s revenue. The lion’s share comes from massive subscriber fees that are tied to long term contracts.
A spokesperson for Comcast declined to confirm or deny these figures, but agreed that SpinCo would have low debt, be well capitalized and have a strong balance sheet. This information has quickly trickled through the talent tier of MSNBC, as new CEO Mark Lazarus met with each of them last week.
Lazarus will thus have a great deal of cash to either invest in the cable channels, acquire new companies or create new products.
So while I was wondering, stupidly, how MSNBC would move forward as a brand given the yawning gap in credibility post-election, and now its decoupling from the NBC newsgathering operation, a more basic reality yanked me back to clarity. MSNBC now has lots of cash, and does not have to send that cash back to any parent company.
Even with a resource sharing agreement with NBC, MSNBC essentially becomes a group of talking opinionators. People in agreement talking to themselves. I don’t know how that’s a news operation. But as a business, apparently it works.
From a business perspective, there is still risk tied to the inexorably declining number of cable subscribers This risk is that this decline will ultimately atomize the once-mighty cable bundle. And as one expert put it to me, subscriber fees are guaranteed only as long as the bundle stays together.
The subscriber number that is declining five to 10 percent a year could come undone much more quickly if, for example, ESPN moves to its own streaming service. Which looms as more likely than not.
Many have suggested that because SpinCo has no real digital presence, the likely investment would be in a streaming product. Fox News has Fox Nation, a streaming news channel that has about 2 million subscribers. And there is no risk of being competitive with Comcast’s streaming service, Peacock, which has no programming tie to the spun-off channels. Lazarus will no doubt pay close attention to that opportunity, along with possible roll-ups of cable content creators like AMC Networks or A&E.
But there’s zero shade for the news network over at corporate. “We do think there is an opportunity for growth,” said a Comcast executive. “MSNBC, CNBC and the sports programming on USA – these are must-haves.”
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