NBC Inks Matt Lauer to a Long-Term Contract Extension

Willie Geist, Carson Daly, and Josh Elliot can stop dreaming about occupying the Today show seat next to Savannah Guthrie. NBC has confirmed a New York Times report that Lauer has signed a new deal to remain as host of the program during the 7-9 a.m. hours.

Though no details of the contract have been released, The Times confirmed that the agreement was for more than two years and that the host's current pact was set to expire in "a few months." Financial terms were not disclosed either but multiple major news and entertainment sites peg Lauer's annual salary between $20 million and $25 million.

Whether Lauer would be resigned at all has been in question as the longest-tenured anchor in the history of the long-running program lost some of his popularity when it was perceived he was behind the ousting of former co-host Ann Curry after she spent less than a year as co-host.

Until this contract extension was announced it seemed NBC was preparing to move on as it added Geist and Daly to the show as regular contributors and replacements for Lauer on his off days. The Comcast-owned network also signed Elliot to a reported $10 million deal earlier this year. Since Elliot had previously served as news anchors on Walt Disney Co.'s  ABC's Good Morning America franchise many (including me) believed Elliot was being groomed as the replacement.

That might still happen someday but the network ended all short-term speculation about further Today anchor changes when it confirmed signing Lauer to this extension.

Why did NBC do this?

When Today fell out of the top spot in the ratings war -- which it held for 16 years -- many blamed the show's drop on the upheaval caused by the voluntary departure of Meredith Vieira followed by the forced ouster of Curry. At the same time, GMA was a picture of stability not only keeping its key team intact but rallying around co-host Robin Roberts as she battled cancer. The Today show cast seemed to dislike each other while GMA's team appeared to be puppy dogs and rainbows.

Now, with the departure of Elliot and the loss of weatherman Sam Champion (who left for a show on The Weather Channel, which is also owned by Comcast), it's ABC that appears to have a cast in upheaval. Keeping Lauer shows stability and that has been paying off in the ratings.

Though Today has been losing in overall viewers by a substantial amount, the NBC program has been narrowing the gap in the 25 to 54 demographic, which is the one advertisers care about.

Two weeks ago Today closed the gap to 88,000 viewers, though ABC increased that to 184,000 this past week. 

GMA has between 800,000 and 1 million more total viewers in an average week.

Today still makes money

While it must have been tempting for NBC to consider replacing Lauer and his $20 million-plus deal with the cheaper Elliot -- or even Daly or Geist -- the savings were likely not worth the risk.

Although it's the second place show, Today brings in more money than its rival. 

In 2013, the first two hours of Today brought in $495.6 million, according to media research firm Kantar, compared  to $350.2 million for GMA. Some of that disparity comes from the fact that Today encompasses four hours of NBC's morning programming - the traditional first two hours, the 9 a.m. hour, and then a fourth hour hosted by Kathie Lee Gifford and Hoda Kotb - and the network can use that to leverage package deals with sponsors, Variety explained.

Slow and steady wins the race

Morning television viewers seem to want to believe the bantering hosts actually like each other and willingness to continue to sit next to each other seems to go a long way toward making that happen. Keeping Lauer in place is the safest way to stabilize the program and build upon recent ratings gains and protect the show's revenue lead.

In the long term, Lauer -- who will never be the viewer favorite he was before the Curry incident -- should be eased out in favor of a younger face (probably Elliot). It's important however that the hand-off appears willing -- think Tom Brokaw to Brian Williams rather than Jane Pauley to Deborah Norville. If the network can make that happen then Today stands a decent chance of maintaining its revenue wins and even of reclaiming the top spot in the ratings.

Tops in the morning vs. tops in the market

Give us five minutes and we'll show how you could own the best stock for 2014. Every year, The Motley Fool's chief investment officer hand-picks one stock with outstanding potential. But it's not just any run-of-the-mill company. It's a stock perfectly positioned to cash in on one of the upcoming year's most lucrative trends. Last year his pick skyrocketed 134%. And previous top picks have gained upwards of 908%, 1,252% and 1,303% over the subsequent years! Believe me, you don't want to miss what could be his biggest winner yet! Just click here to download your free copy of "The Motley Fool's Top Stock for 2014" today.

The article NBC Inks Matt Lauer to a Long-Term Contract Extension originally appeared on Fool.com.

Daniel Kline has no position in any stocks mentioned. He rarely watched morning shows and does not understand why Today needs so many on-air personalities. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story