Trump late night TV threats spell trouble for advertisers

The world of late-night television is facing an uncertain future, with recent cancellations and suspensions leaving advertisers and media companies scrambling to adapt. The cancellation of “The Late Show with Stephen Colbert” and the temporary suspension of “Jimmy Kimmel Live!” have highlighted the challenges facing this segment of the industry. As traditional TV viewership continues to decline, late-night shows remain a valuable time slot for advertisers, particularly for reaching a younger demographic.

Impact on Advertisers

Advertisers rely heavily on live TV, including late-night talk shows, to reach engaged audiences. According to Kevin Krim, CEO of ad data firm EDO, “Reaching a lot of people who are engaged because it’s live TV — or live-to-tape — is really important, and when you think about it from the media company’s perspective … the live moments are live sports on most given nights, the nightly news and late-night talk shows. That’s all you have.” The loss of popular late-night shows could leave advertisers with limited options, making it harder to reach their target audiences.

Julie Clark, a senior vice president at TransUnion, notes that late-night shows may not draw the same mass audiences as they once did, but the viewers who tune in are highly intentional. This makes late-night TV a valuable space for advertisers seeking to reach a consistent, engaged community. For example, “Jimmy Kimmel Live!” was considered one of the top 10 best vehicles for advertising reach on ABC, delivering 2.5% of the network’s total ad exposures.

Financial Pressures

Media companies are facing increasing financial pressures, with a shift in focus towards building out their streaming platforms. This has led to a reduction in spending on traditional TV programming, including late-night talk shows. The costs of producing these shows have risen over the years, while ratings have declined, making them less profitable. Jonathan Miller, CEO of Integrated Media, notes that late-night TV and daytime morning shows used to be two of the most profitable areas of TV, but the costs have gone up, and ratings have declined.

The focus on content that guarantees big live audiences, such as live sports, has led to hefty spending on sports rights deals. For example, Paramount Skydance recently announced a $7.7 billion media rights deal with UFC, while Disney and NBCUniversal signed a new media rights deal with the NBA worth $77 billion over 11 years. These deals have further squeezed the budgets for other types of content, including late-night talk shows.

Regulatory Scrutiny

Media companies are also facing increased regulatory scrutiny, with President Donald Trump and Federal Communications Commission Chair Brendan Carr ramping up pressure on media companies. This has led to a rise in settlement payments, with ABC News agreeing to pay $15 million to settle a lawsuit over comments by TV anchor George Stephanopoulos, and Paramount agreeing to pay $16 million to settle a lawsuit over the editing of a CBS “60 Minutes” interview. These settlements have raised concerns about the impact of political pressure on the media industry.

The suspension of “Jimmy Kimmel Live!” and the cancellation of “The Late Show with Stephen Colbert” have highlighted the challenges facing late-night television. As advertisers and media companies adapt to these changes, it remains to be seen how the industry will evolve in the face of financial pressures, regulatory scrutiny, and shifting viewer habits.