What Killed 'The Late Show'?

0:05Last week, fans of late night television got some bad news. Before we start the show, I want to let you know something that I found out just last night. Next year will be our last season. CBS was canceling The Late Show with Stephen Colbert. Our colleague Joe Flint covers the media. Stephen Colbert announced to his audience that his show would be ending when his contract expires next May, May of 2026. The audience was very, you know, booing and catcalls and not happy about it. And he basically said, I'm right there with you. And he said, all this is going away, meaning the late night business.

0:46Yeah, I share your feelings. It's not just the end of our show, but it's the end of The Late Show on CBS. I'm not being replaced. This is all just going away. In a statement, CBS said the move to cancel The Late Show was, quote, purely a financial decision. And Joe says that the finances of late night are tough. We've been hearing for a long time about the challenges in late night television. Audiences are smaller. Ad revenue is down. These are issues affecting a lot of shows. But the idea that the number one rated late night show in Colbert would be just have the plug pulled out. And not just him.

1:27CBS is getting out of the late night business. So it's not like we're ending the Colbert show to go as a cheaper option. We're just done with late night TV. So that was a shocker enough. If that was the news alone, that would be pretty wow, boom.

1:46But some Colbert fans think there's even more to the story. They say that the late show's cancellation goes beyond broadcast TV's money troubles and that it's at least partly about politics.

2:02Welcome to The Journal, our show about money, business, and power. I'm Annie Minot. It's Friday, July 25th.

2:16Coming up on the show, what killed The Late Show?

2:37Are you a late night TV watcher? I used to be more of a late night TV watcher. Now I watch clips on YouTube. I'm an old man. I can't stay up till 1130 at night anymore. Honestly, same. I remember watching Letterman in college. There were, you know, four channels. We didn't have cable. You sat in a dorm room and you watched Dave drop a watermelon. out a window before you went to bed. We're back again on top of the five-story tower, dropping all new stuff, bigger and better than ever. Solid entertainment.

3:13How do you define late night TV? Is it a format? Is it a time slot? What is it? Well, certainly we'll start with the time slot. The time slot itself is late night. So, you know, You have NBC, CBS, ABC. They program primetime from 8 to 11. And then the stations get their local news, which is where stations make their money. And then at 11.35, the late shows begin. From New York City, the National Broadcasting Comedy presents Tonight, starring Steve Allen. Late Night as We Know It dates back to the 1950s, with NBC's Tonight starring Steve Allen. But it wasn't until the 60s that Late Night really took off.

3:58That's when Johnny Carson took over Late Night at NBC with The Tonight Show. And now, ladies and gentlemen, here's Johnny!

4:14Carson became known as the king of Late Night. Thank you very much.

4:22In the old days, what was the show? Well, you had on a movie star with a movie to promote. Come on. Would you welcome Miss Elizabeth Taylor? Maybe you had a stand-up comedian come out and tell a few jokes. Right, like a Steve Martin. You want to be like me. A love guard. The kind of guy women love to be with on a date. A magician do some tricks, someone who does something with animals. It only weighs about eight or ten pounds. She weighs about ten pounds. That's why you said that. A live band. All these shows had bands. The band members played biddles, if you will, with the hosts. Badum. Yes. And a sidekick.

5:07You know, a lot of these shows had sidekicks, lest we forget. You really think you're fooling everybody, don't you? No, no, no, no. I'm just here to do my best to help you. I know that.

5:22How popular were these shows in their heyday, at their peak? Well, at their peak, I mean, when Johnny Carson was on, you know, of all the TVs that would have been on at 1130, probably, you know, half of them were tuned into him, if not more. Did they make money? Were the shows profitable? Oh, yes, yes. These shows were very profitable back in the day for lots of reasons. You had a bigger audience, so you had more ad revenue. The competition was far less. So it was a lot easier to make money. When there's only three channels, everyone was making money. That was the great thing about network television.

5:55You had three things to watch. You were going to watch one of them. And odds are that you would have enough of an audience to make money. Carson eventually handed off The Tonight Show to Jay Leno, who was then followed by Conan O 'Brien and then Jimmy Fallon. At CBS, David Letterman headed The Late Show for decades before Stephen Colbert took over in 2015. Up to that point, Colbert was best known for his satirical news show on Comedy Central, The Colbert Report It was kind of a parody of a conservative talking show, almost like a parody of Bill O 'Reilly Very well done I mean, he stayed in this character for many, many years doing this show And it was, you know, brilliant This program is dedicated to you, the heroes And who are the heroes?

6:47The people who watch this show. When Colbert moved over to the late show, it was an adjustment. For starters, he wouldn't be in character anymore. But more importantly, this was a major network show. Obviously, when you're going to go broad-based, you have to really go out of your way to try to reach a bigger audience. So I think, you know, when he first came on, he did try to be very broad in interviewing the entertainers and trying to appeal to everyone. Kind of left that Colbert persona behind and was kind of channeling more of the Johnny Carson. A little bit, a little bit more mainstream and less of what he had done in previous lives for the Colbert Report.

7:30And how'd that go? You know, it didn't it didn't resonate with viewers very much. It wasn't it wasn't connecting. It wasn't it wasn't clicking. And so a decision was made to kind of let Stephen be Stephen. Let him be in his sweet spot. Politics. Politics and commentary and jokes about politicians and the news of the day and biting jokes, I will say. Speaking of stupid and madmen, Donald Trump.

8:01Colbert's turn towards politics was happening in the run-up to the 2016 election. And one of his most frequent targets was then-candidate Donald Trump. Like in this recurring segment, where Colbert interviews a cartoon version of Trump. Now, Mr. Cartoon Trump, how do you respond to Anderson Cooper comparing you to a five-year-old? Anderson Cooper's a dum-dum. He's a stupid head, a total poopy pants, it's sad. And over the next decade, Colbert maintained that political tone, often digging into Trump in his monologues. It is day 102 of the Trump presidency, 1 ,358 days to go. But who's counting?

8:46How did CBS feel about this leftward political shift? Was it working for them? Well, I think they were for it. It was working in the sense of the, certainly the numbers were better for Colbert when he went sort of into his old persona, if you will. and I don't think they really had a huge problem with it because Lord knows they kept paying him and keeping the show on.

9:12Fast forward to last week. That Monday, Colbert took the stage to deliver his opening monologue. He had another joke about Trump. While I was on vacation, my parent corporation, Paramount, paid Donald Trump a$16 million settlement over his 60-minute lawsuit. Colbert was referencing a lawsuit between President Trump and CBS's parent company, Paramount. During the presidential election, Trump had taken issue with the way CBS's 60 Minutes had edited a Kamala Harris interview, and he'd sued. Paramount had just agreed to settle that lawsuit for$16 million. Now, I believe this kind of complicated financial settlement with a sitting government official has a technical name in legal circles.

9:57it's big fat bribe because this all comes as Paramount's owners are trying to get the Trump administration to approve the sale of our network to a new owner, Skydance. In Colbert's telling, that$16 million settlement was a payoff to clear the path for Paramount's merger. The Federal Communications Commission approved that merger yesterday. Just days after Colbert delivered that monologue, he got the news that CBS was canceling the late show. Stephen was told, per my reporting, Wednesday night that his show would be ending when his contract was up. And it was done in the typical Hollywood fashion, which is the network tells Stephen's agent and Stephen's agent gets to tell Stephen.

10:44The day after the late show announcement, Trump posted on social media, quote, I absolutely love that Colbert got fired. To some, the timing of the cancellation looks suspicious. It looked like CBS was trying to get rid of one of the president's most vocal critics. This week, Colbert addressed the controversy on his show. Some people see this show going away as a sign of something truly dire. And while I am a big fan of me, I don't necessarily agree with that statement because we here at The Late Show never saw our job as changing anything other than how you felt at the end of the day, which I think is a worthy goal.

11:22What has CBS said about why it decided to do this? What's their explanation? CBS has said this is strictly a financial decision, that it had nothing to do with the show's performance or its content. This had nothing to do with anything Stephen has said about CBS and its settlement or to do with getting the deal closed. Now, they've said all that. That doesn't mean that the general public is buying it. According to Joe's reporting, CBS made the call to end The Late Show around July 4th, days before Colbert criticized Paramount. Executives had been considering the move for some time. A person familiar with the show's budget told Joe that, despite being the top-rated show on Late Night, The Late Show loses about$40 million a year.

12:13So why is The Late Show so in the red? That's after the break.

12:34In the early days of late night, TV viewers had just three networks they could tune into. Today, the entertainment options are seemingly infinite. And that hasn't been great for late night ratings. You know, really, for the past 15, you know, 20 years, late night has been in a decline. However, it's really sped up in the last, say, five or six years, a combination of the pandemic throwing everyone's viewing habits topsy-turvy. And also just in general, the incredible growth of content everywhere else. A lot of that content is on YouTube. In fact, YouTube recently beat out Disney, Netflix, NBCUniversal, and Paramount to become the most-watched video provider on American televisions.

13:22That's according to Nielsen data. And I have to say, some of the content on YouTube bears a striking resemblance to the stuff on network TV. There's celebrities chatting on comfy couches, on video podcasts, like Call Her Daddy. Khloe Kardashian, welcome to Call Her Daddy. Thank you. I'm so excited to be here. There's hosts trying out products, like on Good Mythical Morning. We're letting our dogs test weird pet products. Let's talk about that. And there are shows combining interviews with stunts, like Hot Ones, a show where celebrities answer questions while eating increasingly spicy hot wings.

13:57Oh my God! I know. Oh, I can't even hit you the water! Holy s***! When does it stop burning? As more people have gone online, advertisers have followed, leaving late night behind. In 2018, advertisers spent about$440 million on late night shows across the three networks. In 2024, that fell by about half. Ad dollars migrated to other platforms and cheaper platforms, too. It's a lot cheaper to buy an ad on a podcast than it is on Colbert's show and maybe get, if not the same audience in terms of size, you're able to target your ad dollars a little more specifically. What has all of this meant for late-night shows' bottom lines?

14:43Well, it means the bottom line of late-night shows have shrunk because if the viewers are leaving, then the ad dollars are getting smaller. And if the ad dollars are getting smaller, the show's ability to be profitable gets severely hampered. It's even harder to stay profitable because late-night shows are really expensive to make. I mean, let's think about it. You've got a host salary. Right. Not small. Not small. Then you've got a band you're paying. And then just, you know, producing in general. I mean, these shows all have lots of writers and producers. Someone's writing the jokes. Someone's researching the guests.

15:20Someone's preparing the monologues. All of these things start to add up. At the late show, there's a live band, a staff of 200 people, according to Colbert. And Colbert himself? He makes an annual salary of$20 million, according to someone familiar with the show's operations. To stem the bleeding across late night, networks have cut their show's budgets. Instead of airing five nights a week, all major late night shows air Monday through Thursday. Producing a show for Friday just isn't worth it. And some shows have gone even further. NBC's Late Show with Seth Meyers made a cut that was once unthinkable in late night TV.

15:59They got rid of the band. And The Late Show hasn't been immune to cuts either. A source of mine at CBS said that last year they went to Colbert and they did do some cutting. But they just decided this time around the cuts would be too deep to be able to keep the show going in its current form. But they have done cuts on all these shows, reducing staff and trimming episodes and that sort of thing. It's just that it's helping, but not nearly enough. It helps around the edges, but they're kind of seeing the weakness of this entire business model. Exactly. When you kind of look at the decline of late night, what is threatening this kind of TV the most?

16:41Is the problem the time slot? Is it the content? Is it where people are watching? Is it all those things? I think it's all those things, but I really think part of it is just the plethora of options. It's just grown so much. I mean, Late Night is having the same challenges all media are having. Technology has changed and created a lot more viewing options. It's just tough for any traditional show or media outlet to sustain or maintain its audience day after day in today's environment.

17:24What would it mean if this genre were to largely go away? Well, the bigger picture is it's one more thing that used to kind of unite the country and the culture going away. When Johnny Carson was on, that was a unifying force. People tuned in before they went to bed. They got their little spoof on headlines. They got some interviews with entertainers and newsmakers and then went off to sleep. And we don't have those sorts of unifying shows anymore. I think the end of late night on broadcast TV, at least, is just taking away one more sort of water cooler thing. Hey, did you watch Carson last night?

18:08Did you watch Leno last night? Did you watch Colbert last night? Those moments are fewer and fewer in our country as all the audiences become so fragmented.

18:29That's all for today, Friday, July 25th. Additional reporting in this episode by Ben Fritz and John Jurgensen. The Journal is a co-production of Spotify and The Wall Street Journal.

19:08The show is made by

19:23Thanks for listening. See you Monday.