NBCU Prepares For 3% Budget Cut, Decreasing Spending By $500M

NBC Universal is "prepping another round of major cuts, slashing spending by $500[M] next year," according to Michael Schneider of DAILY VARIETY. NBCU President & CEO Jeff Zucker "announced the reduction Friday via a memo to staffers," and indicated that "cuts would equal 3% of the company's budget." In the memo, Zucker "blamed the current economy, arguing that NBCU needed to take precautionary steps despite coming off eight consecutive quarters of growth and profit." Determining how and where to make the cuts, Zucker "suggested a variety of ways, focused on three areas: discretionary spending, such as travel and entertainment; promotion expenses; and staffing." He also "stressed going through NBCU's sourcing department before making major purchases" (DAILY VARIETY, 10/18). A source indicated that NBCU execs are "still hashing out where exactly the cuts will fall and how deep they will be for each unit." Meanwhile, the WALL STREET JOURNAL's Schechner, Dana & Glader report CBS Corp. and Viacom have "both reduced their 2008 profit projections because the slowing economy is taking a toll on television advertising." News Corp. Chair & CEO Rupert Murdoch Friday "warned of a difficult year, saying that the crisis has 'weakened advertising markets'" (WALL STREET JOURNAL, 10/20).

MURDOCH WELL POSITIONED: Murdoch said that he has a $5B "war chest" to help during the current economic situation. Murdoch: "We are as well-positioned as we can be to face what may well turn into a prolonged economic downturn" (FT.com, 10/19).