NBC's Jeff Zucker on Tina Fey and Sarah Palin

NBC Universal CEO Jeff Zucker enjoys being in the hot seat. From his overheated office (he maintains it in the balmy 80s), Zucker is tasked with guiding the company through the economic crisis and into its long-term digital future. "We are in the middle of one of the worst recessions of our lifetime and maybe in modern American history," says Zucker. Among his challenges: NBC Universal could see 2009 profits decline by as much as 9 percent, and it's beginning its fifth straight year with NBC's primetime ratings lagging behind those of FOX, ABC and CBS.

Still, Zucker, who at age 43 celebrates his second anniversary as CEO this week, refuses to sweat. In fact, he's more than willing to put a positive spin on things. "We were up 1 percent," he says, referring to NBC Universal's 2008 profits. "I don't think there's a media company out there that's had a better year." In previous years, such a statement might ring hollow. But it's been a rough year for major media companies, including rival Time Warner which posted an eye-popping $16 billion loss. To further his point, Zucker's also quick to boast that NBC losses in primetime (which still amounts to 10 percent of the company's revenue) have been offset with the success of Universal studios and the sister networks like USA, CNBC and Bravo. And last weekend, the company set the record in Super Bowl ads—$206 million.

From his 52nd floor office at 30 Rockefeller Center in midtown Manhattan, Zucker talked to NEWSWEEK's Johnnie L. Roberts about a wide range of issues, including charges of liberal bias against MSNBC, the prospect of giving Sarah Palin her own TV show, and who he finds more interesting—Tina Fey or Rachel Maddow. Excerpts:

NEWSWEEK: Viewers couldn't get enough of political, financial and economic news last year. All of cable news soared, including MSNBC. Are you satisfied with the network's progress thus far?
ZUCKER: I don't think you realize how strong MSNBC is. MSNBC used to be an also-ran; it changed the entire game last year. It's attracted an entirely new audience. For 10 years, we couldn't get arrested with MSNBC. It used to be that if you asked about MSNBC, the question would be, "When are you going to close it down?"

For the eight years of the Bush administration, Fox News was accused of right-wing bias. Now MSNBC has a reputation for leaning left, largely because of Keith Olbermann and Rachel Maddow. Are you concerned about the bias rap? Might the perception spill over onto and damage the NBC News brand?
First, there is absolutely no evidence, and probably evidence to the contrary, that it's had any adverse impact on NBC News. "NBC Nightly News," "Today" show and "Meet the Press" all now enjoy wider margins of victory over their competition than they did 18 months ago before that perception was widely held. Secondly, what do I think about that perception of MSNBC? It's driven by a couple of programs in primetime that have a very strong point of view, a real voice and a real audience. The rest of MSNBC programming is what it has always been—traditional reporting. I believe that the audience that comes to MSNBC and NBC is fully capable of distinguishing between the two.

The animosity—name-calling and insults—between Olbermann and rival Bill O'Reilly of Fox News sometimes borders on the buffoonish. Are you inclined to halt it on your side?
[Long pause.] It's become part of the fabric of both of those shows, and it probably would be better if it weren't personal. And I wish it weren't so personal.

But my question is, are you inclined to dial it down, at least on your side?
I trust Keith's instincts to know what's right. He knows that I wish it weren't so personal.

After the election, there was a lot of talk about giving Sarah Palin a TV show. Would MSNBC be interested in making her a television host?
It's an interesting suggestion. I think she's a big personality who obviously is very likeable and those are qualities that go a long way in television.

Speaking of television hosts, let's talk about the decision to move Jay Leno to primetime. It's been widely reported that you stand to save tens of millions by not buying scripted TV shows. Was money your key consideration?
NBC Entertainment did not want to lose Jay. Everything else is secondary. They knew that if they couldn't find a role for him he was going somewhere else to perform his show. One of the residual benefits here is economic savings, but that was not the driving force or the reason we did it.

Then would you have kept him had he been more expensive than scheduling scripted dramas at a 10 o'clock slot?
No, I don't think we would have, frankly.

What are the risks of stripping Leno across the weeknights?
Anytime you introduce something new like this, there's always a slight bit of concern. We're just hoping for it to be as strong as possible to keep our [local news] lineup at 11 and our own late night line-up with Conan, [followed by] Jimmy Fallon and [then] Carson Daly as strong as possible.

Still, it's a risky move in uncertain times. You've already taken steps to cut costs, including layoffs. Are more on the way?
We believe we've taken all the steps we need to take. But you can never be sure of what's ahead. And I believe we're done, but we are going to continue to be vigilant but we don't know what the next months and the year will bring us. I'm never going to box myself into a corner.

How important is your digital strategy to the financial health of the company? How much does NBC Universal earn in digital revenues?
I'm not going to get into specifics. I can tell you that our digital revenues in no way have replaced what we've lost on the traditional side of the business. All of us in media, whether print or television, are in the middle of trying to transform the economics of digital. But it's a very tough game. None of us have really come up with an economic model that replaces what we've lost. We're not getting compensated online or digitally for everyone who's consuming our material in the same way we used to. We haven't fully trained the audience well enough to believe that it has to pay for the material online.

That's going to be a hard sell, which may explain your decision to partner with News Corp. in creating Hulu, the free online site to watch popular television shows. The idea behind it is that advertisers prefer to be in or near professional content, not user-generated clips like a lot of what's on YouTube. Is Hulu proving this to be true?
I think Hulu's been a tremendous success. There's been a slowdown in all aspects of advertising, including digital. But the macro point is still the same. Advertisers have shown much more willingness to have their messages be part of professionally produced content. That's one of the reasons Hulu has become such an overnight sensation.

Let's talk a little about sensations. Last year was extremely successful for two NBC Universal talents, Tina Fey and Rachel Maddow? But which had the more interesting year?
Who had the most interesting? I love all my children equally, but if you're going to force me to pick one, I don't think anyone in media had a more interesting year than Tina Fey—from her success in the Universal studio film "Baby Mama" to her work on [NBC hit sitcom] "30 Rock" to what she did on "Saturday Night Live" with Sarah Palin. I don't think there was any one who had more influence on American popular culture last year, and I think she secured her place as the queen of comedy.