It would appear, at first glance, that there are two intertwined strands of logic to the abrupt canceling of Stephen Colbert’s late-night show by the brass at Paramount Global, the parent company of CBS.
On the one hand, there’s an economic reality: “The Late Show With Stephen Colbert” employs roughly 200 people, costs $100 million annually to produce and was reportedly losing $40 million a year. That’s a lot for a struggling television network to absorb in an era of rapidly declining fortunes. In 2024, Paramount’s broadcast and cable television business had an operating income of about $4.3 billion, down roughly 9 percent from the $4.8 billion it made the year before. The trajectory for network television has been going in only one direction, and not just at Paramount. Why else is Comcast spinning off a significant portion of its cable television networks and Warner Bros. Discovery splitting its streaming and studio from much of its television business?
Then there’s the juicy conspiracy theory: that Paramount is caught in a realpolitik vortex involving Donald Trump’s F.C.C., which has yet to approve Paramount’s $8 billion recapitalization deal. In this telling, jettisoning the man who has made Mr. Trump the brunt of his late-night jokes for years would be a small price to pay for closing what might be a much more lucrative deal. Mr. Colbert, it must be said, hasn’t been shy about criticizing the network; last week, he unabashedly called Paramount’s $16 million payment to the Trump presidential library “a big fat bribe.” He might have been joking, but still.
The political overtones of the Colbert ouster kicked up a notch when Mr. Trump proclaimed on social media: “I absolutely love that Colbert got fired. His talent was even less than his ratings.” Mr. Colbert responded to that taunt on air, by telling Mr. Trump what he could do, using an expletive, to himself. The contretemps became even more political when Democratic Senators Elizabeth Warren, Bernie Sanders and Ron Wyden jumped into the fray with a pointed letter to David Ellison, the chief executive of Skydance Media, which is being merged into Paramount as part of the pending deal.
They wrote that the series of events raises “fresh questions about corruption in the Trump administration and President Trump’s willingness to accept payments from entities with significant policy interests before agencies he controls.”
Despite the atrocious timing of CBS’s announcement, I suspect Mr. Colbert’s demise had more to do with the increasingly challenging economics of traditional late-night television than it did with bending the knee, yet again, to the Trump administration. After all, why would Paramount keep Mr. Colbert on the air for another 10 months or so if he was meant to be a sacrificial lamb? (His unrenewed contract ends in May.) He’d be removed immediately if that were the case. Instead, until his show ends, he’ll have free rein to bash Mr. Trump every night if he’s so inclined. I’m sure he’ll do just that.
It has escaped nobody’s attention that Paramount Global has been on an essential cost-reduction program. Last year, the company aimed to cut costs by $500 million and said it would reduce its work force by 15 percent, or by 2,000 employees. Just last month, it announced a work force reduction of an additional 3.5 percent. Mr. Colbert surely wouldn’t have been outside the blast zone of these cuts, especially considering the show’s losses. As Dave Portnoy, the proprietor of Barstool Sports, correctly pointed out: “Buddy, you’re losing $40 million a year, and then you have the arrogance to go hammer your own company? What did you think was going to happen?”
What remains a mystery, though, is why Paramount didn’t take a more dignified approach to the economic realities of late-night television. Why not concede Mr. Colbert’s immense talent and figure out how to provide him a different Paramount platform at a reduced salary? At 61 years old, he might not have agreed, but it sure would have been far less of a public relations disaster than the path Paramount chose.
Regardless, there is the undeniable economic reality of network television. Mr. Portnoy said he also has 200 or so people working for him at Barstool. They are producing many shows, not one, and the “bigger ones,” he said, “draw bigger audiences than Colbert. So, like, what are we talking about?”
While Mr. Colbert may still be No. 1 in late-night, many of us are not watching him on CBS at 11:35 at night. We’re busy sleeping, or glued to TikTok or X or YouTube or whatever. The numbers prove that reality — the ratings for late-night shows across the board are way down in recent years. You can be sure that what happened to Mr. Colbert is a harbinger of what’s to come for Jimmy Fallon, Jimmy Kimmel and Seth Meyers, I’m sorry to say.
This is Capitalism 101. David and Larry Ellison and RedBird Capital Partners are putting some $8 billion into Paramount Global after the F.C.C. approves their deal. You can bet they will want — or even demand — a return on that investment, even if they are already among the richest people in the world. The new Paramount owners will almost certainly hold Hollywood to the same economic rules as every other industry. I suspect they will take a page out of the Fox playbook, focusing on prime time and live sports, both of which are proving to be the only hope for TV’s bottom line.
Late-night doesn’t fit in their new world because late-night doesn’t pay for itself anymore. It’s that simple.
William D. Cohan is a founding partner of Puck and a former Wall Street banker.
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