NBCUniversal cuts ties with Paul Telegdy after allegations of racism and sexism

NBCUniversal has cut ties with NBC Entertainment Chairman Paul Telegdy amid a broad reorganization of the company’s TV team.

Thursday’s shakeup comes less than a week after Telegdy was accused of alienating key producers and fostering a hostile work environment during his two years as head of NBC Entertainment.

NBCU said it would investigate after the Hollywood Reporter published a troubling account of Telegdy’s leadership, which included allegations from unnamed sources that he had engaged in homophobic, sexist and racist behavior. Telegdy responded: “The nature of these allegations flies in the face of everything I stand for.”

During Telegdy’s tenure, the peacock network fell from its No. 1 perch in the advertiser-preferred demographic of viewers ages 18 to 49. NBC finished the most recent season in second place, behind Fox. On Thursday, NBCU did not mention any investigation, saying only that Telegdy was “leaving the company.”

The New York media company also announced a new structure for its vast television empire, merging its broadcast and cable TV programming units. As part of the overhaul, longtime Comcast executive Matt Strauss will lead the direct-to-consumer TV unit, which includes the recently launched Peacock streaming service. Veteran programmer Frances Berwick has received a major promotion that puts her in charge of strategic and business elements of NBC as well as the entertainment cable channels.

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The well-respected Berwick will have “operational oversight of all networks and dayparts and be responsible for commissioning and acquiring content to be optimized across these platforms,” NBCU said in a statement. The Emmy-winning tastemaker‘s new role is a powerful one, with control over the budget as well as which shows get made and what networks they will appear on. She is expected to experiment by moving the programming chess pieces around the portfolio.

For example, Bravo’s talk show “Watch What Happens Live With Andy Cohen” could find a new life on NBC. Such moves among platforms could become more common as companies rethink programming priorities and expenditures in a bid to compete with Netflix and other deep-pocketed streaming Goliaths.

A native of Britain, Berwick turned Bravo from a niche arts channel into one of the most popular on TV with the “Real Housewives” franchise, “Queer Eye for the Straight Guy” and “Top Chef.” She joined Bravo in 1996, six years before NBC acquired it. Before that, Berwick was an international distribution executive at Britain’s popular Channel 4. She is based in New York.

Strauss has steadily risen up the ranks of parent company Comcast Corp. by focusing on strategy and user experiences, including a voice-activated remote control, for customers of the Philadelphia cable giant. Last fall, the affable executive transferred to NBCU to take over the operations of Peacock. Comcast brass were thrilled by last month’s smooth roll-out of the service — no mean feat as Strauss had to coordinate the launch with team members who were largely working from home because of the COVID-19 pandemic. Nearly 10 million consumers have downloaded the Peacock app.

Strauss, who is based in New York, joined Comcast in 2004. Both he and Berwick report to Mark Lazarus, chairman of NBCUniversal Television and Streaming.

NBCU did not name an executive to run the TV programming group, saying it was in “the midst of a search for the leader of this unit.” That person eventually will oversee scripted programming, unscripted programming, late night and alternative programming for the NBC broadcast network, the cable entertainment networks and Peacock.

The moves are part of a sweeping management realignment as the company tries to adapt to a new era. NBCU faces daunting challenges brought on by the novel coronavirus, an exodus of viewers to Netflix and other streaming services and a recognition that it must correct a glaring shortage of women and people of color in its upper ranks.

The reorganization coincides with the layoffs of hundreds of staffers within the company’s film division, TV stations, networks including Spanish-language Telemundo and sports channels around the country. The layoffs began earlier this week, part of a plan to pare the company’s 35,000 full-time workforce by nearly 10%. The realignment is intended to reduce expenses and shift resources to NBCU’s recently launched streaming service, Peacock.

NBCU has long operated its television business as two distinct units. The broadcast TV division was made up of the flagship NBC, home to “Saturday Night Live,” “Nightly News With Lester Holt,” “America’s Got Talent” and “This is Us,” as well as TV stations and Telemundo. The second group consisted of cable channels, including MSNBC, USA Network, NBC Sports, Syfy, Bravo and E! The company’s new, more streamlined organizational structure signals the emerging importance of Peacock.

The new structure also democratizes the various TV channels. No longer will NBC operate as an island.

The overhaul comes eight months after Jeff Shell replaced Steve Burke as chief executive of the media company. After recovering from COVID-19, Shell began putting his stamp on the business by introducing bold initiatives and personnel moves, including tapping longtime Spanish-language TV executive Cesar Conde as chairman of the NBCU News Group, which has been beset by controversies in recent years. Earlier this year, Shell enlisted his deputy, Lazarus, to create the new structure.

In the second quarter of this year, NBCU’s revenue plummeted 25% to $6.1 billion as the COVID-19 shutdown and pullbacks in advertising clouded the company’s financial picture. The company shuttered its theme parks, halted TV and movie production and abandoned plans to release big-budget films into theaters, which are also closed.

In the second quarter, revenue for NBCU cable programming was $2.5 billion. That’s a decline of 15% from the same period in 2019, when the division produced $2.9 billion.

Still, the cable programming unit — which relies on advertising revenue and distribution fees from cable and satellite TV providers — remains lucrative. In the second quarter, the cable channels produced $1.2 billion in earnings before interest, taxes, depreciation and amortization (Comcast’s measure of profitability).

NBC, Telemundo and the TV stations generated $2.4 billion in revenue, a decline of 1.6% compared to the second quarter of 2019. The broadcast group earned $641 million before interest, taxes, depreciation and amortization.

“It is said that crises tend to accelerate and exacerbate trends that are already happening,” Shell told analysts last week on Comcast’s earnings call. “That is certainly true in the television business.”