Matt Lauer scandal threatens 'Today' show's $500M ad revenue stream

Long considered NBC's most bankable brand, the “Today" show’s advertising revenue stream is in jeopardy after the sudden firing of its longtime host, Matt Lauer, on Wednesday amid allegations of sexual misconduct.

NBC dismissed Lauer shortly after an employee submitted a complaint about his “inappropriate sexual behavior,” the network said. A subsequent Variety report detailed various examples of Lauer’s alleged misconduct, including one episode in which the 59-year-old host exposed himself to a female employee in his office and another instance in which he purportedly gave a female colleague a sex toy as a gift.

With Lauer at the helm, the “Today” show generated $509 million in ad revenue in 2016, or roughly 5% of NBC Broadcast Television’s total haul of roughly $10.15 billion, according to Kantar Media. To preserve that lucrative source of revenue, NBC is tasked with finding a replacement host for its most prominent daytime program that will satisfy viewers and advertisers alike while also contending with industrywide ratings declines.

“I think if Lauer’s replacement proves to be unpopular, then you will see a noticeable drop in ratings and then revenue,” Brad Adgate, an independent media insights consultant, told FOX Business. “It is a personality-driven [show] so his replacement has to be appealing to the core ‘Today’ Show viewer.”

Even before Lauer’s dismissal, the “Today” show’s television audience was down compared to last year, when a contentious 2016 presidential race caused ratings to spike across the board. The program’s total audience is down 10% so far and 15% in the key 25-54 demographic, according to Nielsen. A further decline in ratings would have a measurable impact on NBC’s asking price for ads on its flagship program.

NBC has yet to indicate who will replace Lauer alongside co-host Savannah Guthrie on “Today.” Longtime “Today” colleague Hoda Kotb sat next to Guthrie when she publicly addressed Lauer’s firing for the first time. Fox News reported that NBC fired Lauer without a clear successor in mind.

Lauer’s exit destabilizes “Today” in the short-term, but NBC’s swift action to part ways with its veteran host within hours of a wave of damning media reports was necessary to reassure sponsors, according to Adgate.

“If NBC kept Lauer on, scores of advertisers would have left,” Adgate said.

Variety’s report detailed Lauer’s purported misconduct with at least three women over a period of several years. A New York Times report later on Wednesday said two more women had accused Lauer of inappropriate behavior after his dismissal.

While Lauer’s firing could impact NBC Broadcast Television’s revenue stream, it is unlikely to have a major effect on Comcast Corporation, the telecommunications giant that owns NBC Universal, according to Craig Moffett, a senior research analyst at MoffettNathanson.

“It is hard to imagine that it will be material for the company as a whole,” Moffett said. “The bottom line is that this is an important news story, but not an important business story.”