Former Cable News Network anchor and executive Lou Dobbssurprised the TV industry last week with his crafty deal with NBC -- a pact that manyobservers predicted will pave the way for him to ultimately join CNN archrival CNBC.
Last Monday, NBC announced that it was partnering withDobbs on a syndicated radio show and a monthly financial newsletter. But NBC president BobWright made no bones about the fact that this is just the beginning of NBC's projectswith Dobbs.
"This agreement establishes a new relationship betweenLou and NBC, which we eventually hope to broaden," Wright said in a preparedstatement.
The NBC-Dobbs pact immediately sparked a flap about whetheror not Dobbs would be able to appear on NBC -- and, in particular, on its sister businessnetwork, CNBC -- to promote the radio show and newsletter.
But the long-term implications of the NBC deal are far morethreatening to CNN than occasional guest appearances on NBC outlets -- cable and broadcast-- by Dobbs, who left CNN in June to become chairman of Space.com.
According to sources, staffers at CNBC and other industryinsiders were buzzing because they now expect Dobbs to land at CNBC -- either as an anchoror top executive, or both -- after his three-year noncompete clause with CNN expires. Somepredicted that Dobbs would supplant CNBC president Bill Bolster.
Jon Mandel, co-managing director and chief negotiatingofficer for Grey Worldwide's MediaCom, was among those laying odds that Dobbs windsup at CNBC -- CNN's and CNNfn's competitor -- as an end result of his NBC pact.
"NBC is brilliant," Mandel said. "It'sgenius."
In fact, the NBC press release said the company and Dobbs"have also agreed that they will discuss an expansion of their relationship toinclude anchoring and hosting television programs should he decide to return tobroadcasting when his noncompete agreement with CNN expires."
Dobbs has been courted by CNBC before. When current FoxNews Channel chairman Roger Ailes was in charge of CNBC, he almost succeeded in recruitingDobbs in 1995, according to sources.
But Time Warner Inc. vice chairman Ted Turner managed toplacate Dobbs by creating CNNfn, the financial-news network that Dobbs was put in chargeof as president.
News that Dobbs was partnering with NBC brought a quickwarning response from CNN, basically over the immediate issue of whether he can do gueststints on CNBC and MSNBC to promote his new NBC co-ventures.
"We have a contractual agreement with Lou Dobbs, andwe expect he will live up to it," a CNN spokeswoman said. CNN attorneys are lookinginto the situation, sources said.
Dobbs said simply, "I'm going to appear whereverpossible to promote the newsletter."
In that vein, he added that he doesn't think appearingon CNBC violates his noncompete clause. "I can't see CNN objecting," saidDobbs, who showed up on NBC's Today last week. "It's guestappearances."
Some industry observers, especially on Madison Avenue,believe Dobbs outfoxed CNN with his NBC deal.
"This will have an impact on how contracts are writtenin the future," said Ellen Oppenheim, senior vice president and media director forFoote, Cone & Belding.
NBC's pact with Dobbs immediately put the spotlight onhow CNN's Moneyline News Hour has performed since he left -- its ratings aredown -- and how the show is doing against its rival on CNBC, Business Center.Moneyline is down, but it is still beating Business Center handily, evenwithout Dobbs.
CNN and CNBC worked hard last week to put the best face onratings for both Moneyline and Business Center, respectively.
CNBC vice president of research Barry Stoddard pointed outthat Moneyline's Nielsen Media Research ratings have dropped more than 30percent in the third quarter this year without Dobbs, to a 0.4 from a 0.6 in the thirdquarter of last year.
In contrast, he claimed that Business Center'sviewership was down just a sliver from the third quarter of last year."They're down 36 percent and we're down 1.5 percent," Stoddard said.
CNN chose to compare Moneyline's ratingsfrom July 19 through Oct. 1 to the show's ratings in the past year, when it had Dobbsand averaged a 0.5. Using those numbers, Moneyline's ratings dropped 20percent. The network used July 19 as a starting point because that's when new Moneylineanchors Willow Bay and Stuart Varney joined the show.
Acknowledging the Moneyline ratings drop, CNNofficials argued that the show's decline didn't reflect Dobbs' absence, butthat it mirrors CNN's overall dip from one year ago. CNN reaped a ratings bonanzalast year from the Clinton-Lewinsky scandal, the president's apology to the nationand the U.S. air strikes against Iraq.
Rather than dwelling on Moneyline's decline,CNN trumpeted the fact that the 0.4 rating the show has tallied since Bay and Varneystarted, which represents 302,000 homes, is 33 percent ahead of the 0.3 rating, or187,000 homes, mustered by Business Center.
Mandel, however, thinks the CNN flagship show'soverall ratings decline overshadows Moneyline's ratings win against BusinessCenter.
"It's rare when a single show loses that much ofits audience," Mandel said. "And it sounds kind of hollow to say,'We're still beating the other guy.' Big deal."
Stoddard also maintained that Moneyline's third-quarternumbers this year, while down, were artificially inflated because the show did newscoverage of the John F. Kennedy Jr. plane crash in July. During that period, theshow's rating shot up to a 0.8.
In contrast, Business Center is a purefinancial-news show that didn't do any crash coverage, according to Stoddard.
CNN officials countered that the bounce Moneyline gotfrom its Kennedy coverage only lasted a few days, and it was minimal.