After Olbermann, Is Comcast Set to Overhaul MSNBC? Don't Bet on It

Keith Olbermann's sudden departure from MSNBC last week has fanned conspiracy theory flames throughout media. Those arguments hold that the conservatives at Comcast (CMCSA) wanted to oust the liberal broadcaster and shake up the cable channel's lineup ahead of this month's takeover of NBC Universal by the Philadelphia-based cable giant. That thinking doesn't hold up for several reasons.

Primarily, the problems NBC had with Olbermann were managerial and not political. Economics also played a big role. The host of Countdown With Keith Olbermann was due to receive $17 million over the next two years and is receiving an exit package valued at well in excess of $7 million, according to various media reports. Even if Olbermann hadn't alienated his bosses and broken corporate rules about political donations, he probably would been asked to take a pay cut because the channel's economics don't seem to justify it.

A Politically Pragmatic CEO

According to the Project for Excellence in Journalism, MSNBC generated $367.5 million in revenue in 2009, along with $149.6 million in profit. The 2010 figures were no doubt better because of the contentious midterm elections, but they probably trailed News Corp.'s (NWS) Fox ($1.21 billion in 2009 revenue, $534.8 million in profit) and Time Warner's (TWX) CNN and HLN ($1.18 billion in 2009 revenue and $475.5 million in profit). The report's figures show MSNBC and CNN/HLN 's finances were little changed, while Fox News posted double-digit gains in both revenue and profits from 2008.

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Also, it seems unlikely that Comcast would have been keen to dump a star with an audience of more than 1 million people. Unlike News Corp.'s Rupert Murdoch, Comcast CEO Brian Roberts is more pragmatic politically. Given that his company is based in Philadelphia, where the Republican party is virtually nonexistent, he has little choice. According to Open Secrets.Org, the cable giant donated $1.8 million to Democrats versus $1.1 million for Republicans in 2010.

In fact, former Pennsylvania Gov. Ed Rendell, whose former top aide David L. Cohen is a key Comcast executive, reportedly is in talks to become a pundit on MSNBC for the 2012 presidential election.

If Olbermann had stayed with a salary cut, Comcast would have had little reason to mess with MSNBC, which also helps augment NBC News coverage of major stories. As of November, MSNBC topped CNN for eight straight months in the ratings among viewers 25 to 54, the demographic that news-program advertisers target. CNN has recently gotten a bump in the ratings from Piers Morgan Tonight, though it remains to be seen whether viewers' initial enthusiasm for the British talk show host will wane. Many MSNBC shows including The Rachel Maddow Show and The Ed Show have posted solid ratings.

Why Mess With Success?

For advertisers, ratings are important, but so are demographics. In that respect, the MNBC audience has a lot going for it. It has an average age of 41.8 with a median household income of $79,500 (compared with average U.S. household income of $52,029), according to data from the Cableltelevision Advertising Bureau. Sixty eight percent are college-educated. That's better than the CNN audience's average age of 60.3, with a median household income of $54,000. Only 36% of CNN viewers have four years of college. The Cabletelevision Advertising Bureau says the audience for Fox News Channel, by far the No. 1 cable news network, skews even older, with an average age of 62 and a median household income $53,468. Thirty-one percent of Fox viewers went to college.

Update: The MSNBC figures cited by the Cabletelevision Advertising Bureau were derived from a survey of viewers aged 25 to 54, the demographic advertisers seek from news shows while the Fox and CNN data were derived from the entire audience. Nielsen shows MSNBC's audience having a median age of 59 with a median household income of $53,000. The median age of Fox's audience is 63, the same as CNN, according to Nielsen. The median household income of Fox viewers is $53,000 and $48,000 for CNN. Nielsen estimates that 37.5% of MSNBC viewers completed at least 4 years of college compared with 36.5% for CNN and 30.6% for Fox.

If MSNBC can continue to deliver a young (by news standards), educated and fairly well-heeled audience, Comcast probably has no interest with tinkering with the channel's programming, which appears to be working. Likewise, changing MSNBC's political tone would create a firestorm of negative publicity that the company would prefer to avoid.