NBC Decision on Williams Crucial to Restoring 'Nightly News'

NEW YORK (TheStreet) -- The decision by Comcast's (CMCSA) NBC on whether to bring back suspended Nightly News anchor Brian Williams could have huge implications for the network's battered news division, according to industry insiders and news analysts who say restoring credibility is an essential first step to improving its ratings.

A determination on Williams's future at NBC is expected perhaps as early as this week though expectations are high that the network will decide to replace him with long-time NBC newsman Lester Holt, host of Dateline, the network's prime time newsmagazine.

Holt has filled in for Williams since he was suspended in February for embellishing his reporting during the network's prime time news show. In the ensuing months, NBC Nightly News' standing as TV's most watched prime time newscast has been dented by ABC's World News Tonight, hosted by David Muir.

For the season just ended, the broadcast from Disney's (DIS) ABC unit averaged 2.113 million viewers for adults aged 25-54, narrowly winning in the group that advertisers most want for news programming. The NBC show averaged  2.112 million viewers in that demographic, according to Nielsen numbers.

World News Tonight also closed the gap with Nightly News among total viewership with 8.543 million people tuning in, versus NBC's  8.910 million viewers. In 2012, NBC's Today Show also lost its long-time ratings title to ABC's Good Morning America.

Williams's future at the company is also being weighed by NBC and its parent company Comcast, because the integrity of the news operation is vital to landing high-profile interviews that can translate into higher ratings, according to industry experts and analysts.

"He became a punch line and would again, and that's fatal for a journalist, perhaps even more than for a politician because expectations of integrity are higher for a journalist," said Joseph Weber, a professor of business journalism at the University of Nebraska-Lincoln. "Every time he would be involved in a controversial story, the targets would likely raise the matter again."

Since taking over, Holt has stabilized the evening news program with his blend of quiet charm and solid reporting, according to former NBC entertainment programming chief Garth Ancier.  In  recent weeks  NBC Nightly News has occasionally won weekly ratings match ups  against ABC's David Muir and "World News Tonight."

Holt has also won admiration within NBC as well for his deft handling of onsite reporting in Baltimore after that city's recent riots.

"Lester Holt has earned the right to keep the NBC job," said Ancier. "As this controversy swirled, he kept his head down and did the job despite the noise. As for ratings, 'NBC Nightl News' has held remarkably steady as this unforeseen transition played out."

Williams was suspended on Feb. 19 for statements he made about his reporting in Iraq that proved to be inflated. An NBC investigation to determine whether he exaggerated other stories about his reporting will be completed "in the next few days, or weeks," according to one person.

The Washington Post reported earlier that the investigation, headed by NBC News senior executive producer Richard Esposito, turned up 11 instances in which the suspended anchor had publicly overstated details of his reporting for NBC Nightly News.

An NBC spokesman had no comment on that report, and would not discuss details of the investigation.

This article is commentary by an independent contributor. At the time of publication, the author held positions in Comcast and Walt Disney.

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