CASE APPLICATION

The Curtain Falls

It's been called one of "the entertainment industry's biggest programming debacles."35 Jay Leno moved from host of the "Tonight Show" to his own talk show, "The Jay Leno Show," which aired at the 10 p.m. weeknight time slot. Conan O'Brien was brought on as Leno's replacement on the "Tonight Show," which has always aired after the local news.

The Jay Leno-Conan O'Brien fiasco started with a decision by NBC executives to save some money by giving Leno one of the oldest formats in TV programming: a comedy-variety show with a comedian, a stage, guests, and in-show ads. But that decision was also a radical experiment based on a single show airing every single weeknight during prime time on a major broadcast network. This format was cheaper to produce for

an entire week than 60 minutes of the pricey scripted dramas that are usually broadcast during that time period. Jeff Gaspin, chairman of television

entertainment at NBC Universal, said, "I don't think it's wrong to take chances. . . . Sometimes they work. Sometimes they don't." And this decision wasn't working. It all started to unravel when ratings for Leno's talk show were low and continued to sink. One media analyst

said, "Nobody's happythe talent isn't happy, the advertisers aren't happy, and the audience isn't happy." Local network affiliates that rely on that 10 p.m. slot to lead people into the late local news rebelled. Those affiliates threatened to preempt Leno's show with other programming. But that wasn't NBC's only problem. O'Brien's "Tonight Show" also was doing poorly in its time slot, losing resoundingly to "Late Show with David

Letterman" on CBS for the first time in 15 years.

NBC executives continued to struggle with decision making. It took nearly two weeks of a very public spectacle for them to craft a solution in which Leno returned to his gig at the "Tonight Show" and O'Brien left

with a $40 million agreement to walk away from "his dream job." And so the curtain closes on a story NBC executives wish had never been written.

Discussion Questions

1. Would you characterize television programming decisions as structured or unstructured?

Explain. What type of decision-making condition would you consider this to be? Explain.

2. What criteria did NBC use in evaluating its initial decision to move Leno and O'Brien? Was

that criteria appropriate? Why or why not?

3. Evaluate Jeff Gaspin's statement, "I don't think it's wrong to take chances. . . . Some-

times they work. Sometimes they don't." What does it say about his decision-making

style?

4. Describe how NBC executives could have used each of the following to make better

decisions: (a) rationality, (b) bounded rationality, (c) intuition, and (d) evidence-based

management.