Former Cable News Network anchor and executive Lou Dobbs
surprised the TV industry last week with his crafty deal with NBC -- a pact that many
observers predicted will pave the way for him to ultimately join CNN archrival CNBC.
Last Monday, NBC announced that it was partnering with
Dobbs on a syndicated radio show and a monthly financial newsletter. But NBC president Bob
Wright made no bones about the fact that this is just the beginning of NBC's projects
with Dobbs.
"This agreement establishes a new relationship between
Lou and NBC, which we eventually hope to broaden," Wright said in a prepared
statement.
The NBC-Dobbs pact immediately sparked a flap about whether
or not Dobbs would be able to appear on NBC -- and, in particular, on its sister business
network, CNBC -- to promote the radio show and newsletter.
But the long-term implications of the NBC deal are far more
threatening to CNN than occasional guest appearances on NBC outlets -- cable and broadcast
-- by Dobbs, who left CNN in June to become chairman of Space.com.
According to sources, staffers at CNBC and other industry
insiders were buzzing because they now expect Dobbs to land at CNBC -- either as an anchor
or top executive, or both -- after his three-year noncompete clause with CNN expires. Some
predicted that Dobbs would supplant CNBC president Bill Bolster.
Jon Mandel, co-managing director and chief negotiating
officer for Grey Worldwide's MediaCom, was among those laying odds that Dobbs winds
up at CNBC -- CNN's and CNNfn's competitor -- as an end result of his NBC pact.
"NBC is brilliant," Mandel said. "It's
genius."
In fact, the NBC press release said the company and Dobbs
"have also agreed that they will discuss an expansion of their relationship to
include anchoring and hosting television programs should he decide to return to
broadcasting when his noncompete agreement with CNN expires."
Dobbs has been courted by CNBC before. When current Fox
News Channel chairman Roger Ailes was in charge of CNBC, he almost succeeded in recruiting
Dobbs in 1995, according to sources.
But Time Warner Inc. vice chairman Ted Turner managed to
placate Dobbs by creating CNNfn, the financial-news network that Dobbs was put in charge
of as president.
News that Dobbs was partnering with NBC brought a quick
warning response from CNN, basically over the immediate issue of whether he can do guest
stints on CNBC and MSNBC to promote his new NBC co-ventures.
"We have a contractual agreement with Lou Dobbs, and
we expect he will live up to it," a CNN spokeswoman said. CNN attorneys are looking
into the situation, sources said.
Dobbs said simply, "I'm going to appear wherever
possible to promote the newsletter."
In that vein, he added that he doesn't think appearing
on CNBC violates his noncompete clause. "I can't see CNN objecting," said
Dobbs, who showed up on NBC's Today last week. "It's guest
appearances."
Some industry observers, especially on Madison Avenue,
believe Dobbs outfoxed CNN with his NBC deal.
"This will have an impact on how contracts are written
in the future," said Ellen Oppenheim, senior vice president and media director for
Foote, Cone & Belding.
NBC's pact with Dobbs immediately put the spotlight on
how CNN's Moneyline News Hour has performed since he left -- its ratings are
down -- and how the show is doing against its rival on CNBC, Business Center.
Moneyline is down, but it is still beating Business Center handily, even
without Dobbs.
CNN and CNBC worked hard last week to put the best face on
ratings for both Moneyline and Business Center,respectively.
CNBC vice president of research Barry Stoddard pointed out
that Moneyline's Nielsen Media Research ratings have dropped more than 30
percent in the third quarter this year without Dobbs, to a 0.4 from a 0.6 in the third
quarter of last year.
In contrast, he claimed that Business Center'sviewership was down just a sliver from the third quarter of last year.
"They're down 36 percent and we're down 1.5 percent," Stoddard said.
CNN chose to compare Moneyline'sratings
from July 19 through Oct. 1 to the show's ratings in the past year, when it had Dobbs
and averaged a 0.5. Using those numbers, Moneyline's ratingsdropped 20
percent. The network used July 19 as a starting point because that's when new Moneyline
anchors Willow Bay and Stuart Varney joined the show.
Acknowledging the Moneyline ratings drop, CNN
officials argued that the show's decline didn't reflect Dobbs' absence, but
that it mirrors CNN's overall dip from one year ago. CNN reaped a ratings bonanza
last year from the Clinton-Lewinsky scandal, the president's apology to the nation
and the U.S. air strikes against Iraq.
Rather than dwelling on Moneyline'sdecline,
CNN trumpeted the fact that the 0.4 rating the show has tallied since Bay and Varney
started, which represents 302,000 homes, is 33 percent ahead of the0.3 rating, or
187,000 homes, mustered by Business Center.
Mandel, however, thinks the CNN flagship show's
overall ratings declineovershadows Moneyline's ratings win against Business
Center.
"It's rare when a single show loses that much of
its audience," Mandel said. "And it sounds kind of hollow to say,
'We're still beating the other guy.' Big deal."
Stoddard also maintained that Moneyline'sthird-quarter
numbers this year, while down, were artificially inflated because the show did news
coverage of the John F. Kennedy Jr. plane crash in July. During that period, the
show's rating shot up to a 0.8.
In contrast, Business Center is a pure
financial-news show that didn't do any crash coverage, according to Stoddard.
CNN officials countered that the bounce Moneyline got
from its Kennedy coverage only lasted a few days, and it was minimal.
