LOS ANGELES — As the No.1 late-night show for most of the past half-century, “The Tonight Show” has been vital to NBC’s fortunes. It was the network’s most profitable entertainment program during its 1990s peak, kicking an estimated $100 million to the bottom line annually.
And today? “Tonight” is in trouble. This month, the show saw wide layoffs for only the second time in its 58-year history, with about 20 people losing their jobs and host Jay Leno taking a pay cut that lopped off more than 10 percent from his estimated $26-million annual salary.
Leno even offered to work for free to save more jobs, according to people familiar with the matter, who said the offer was rejected because executives believed it would set a bad precedent. These people said “Tonight” was now barely breaking even.
The rapid slide of “Tonight” is a tale of not just backstage bungles by NBC but also the instability afflicting the TV business in general. And plenty is at stake. Cable networks devour nearly 84 percent of the $5.6-billion late-night TV market, according to research firm Kantar Media. And broadcasters’ share of the pie is steadily eroding, slipping 5 percent last year alone.
The stakes are getting even higher, with ABC’s announcement last week that it would schedule the increasingly popular “Jimmy Kimmel Live” a half-hour earlier, in the 11:35 p.m. slot directly opposite Leno and CBS’ “Late Show With David Letterman.” With both Kimmel and Leno based in Los Angeles (Letterman is in New York), the rivalry for guests as well as viewers is likely to be intense.