08/23/2012 01:19 pm ET Updated Oct 23, 2012

Cutbacks at Jay Leno's 'Tonight Show': It's Not Just About the Money

Recent cutbacks at The Tonight Show with Jay Leno claimed about 20 staff jobs -- 10 percent of its 150-plus employees. Jay himself volunteered to take a salary reduction of about 20 percent, averting even more layoffs and lowering his annual income to about $20-million.

Reports of the downsizing said Comcast, which acquired NBCUniversal last year, was simply trying to make back its investment, but I don't think it's that simple. Why would Comcast gut the annual budget of its one-and-only consistently number-one franchise by $25-million, and no other show?

Comcast is dealing with a dismal primetime schedule on NBC, which even the Olympics has not been able to revive. "NBC Nightly News" and "Meet the Press" have been losing ground to their competitors, while MSNBC's numbers have been anemic.

The latest Nielsen ratings figures indicate GMA edged out the "Today" show the first week after the Olympics when "Today" took home ratings gold. GMA also prevailed in the five weeks prior to the Olympics.

Despite "Today's ratings struggles, Comcast awarded its host Matt Lauer with a reported $8-million raise, boosting his annual salary to $25-million. NBC News president Steve Capus proudly announced "Matt is the franchise, and our franchise player has decided to keep leading our team."

But there was no public vote of confidence for Jay Leno coming from an NBC executive following "Tonight's" cutbacks, nor was there a private expression of support. Leno felt the chill, and shot back at Comcast with thinly-veiled jokes in his Monday monologue following last Friday's bloodbath: "Welcome to 'The Tonight Show,' or as Comcast calls us, 'The Expendables.'"

Just to make sure the audience -- and Comcast -- understood his position, Leno explained: "As you may have heard, our company has downsized 'The Tonight Show.' And we've consistently been number one in the ratings. And if you know anything about our network, that kind of thing is frowned upon." Not a particularly funny punch line, but it wasn't meant to be.

No doubt, this is only the beginning of a barrage of jokes from Leno aimed at Comcast and NBCUniversal CEO Steve Burke, who personally eviscerated "Tonight's" budget. But I fear Leno's humor will do little to stop Burke from what I suspect he is really up to. For him it's all about the future, which may be shaping up to look like Jimmy Fallon.

"Late Night with Jimmy Fallon, which premiered in March 2009, has built up a respectable following. Since Fallon's show follows "Tonight," Leno's top ratings have bolstered Fallon's success.

But Burke doesn't see it that way. To him, Fallon's annual salary is only a reported $5-million, and his show's budget is smaller than Leno's. Besides, Letterman's current contract is up at the end of 2014, and the last thing Burke wants is to lose Fallon, a rising, young star of 37 to CBS or another network.

In another development, in January ABC will move Jimmy Kimmel's late-night show from midnight to 11:35, bumping "Nightline" to follow Kimmel and moving the highly-rated news program to 9 pm on Fridays.

Kimmel's nine-year show has had tepid ratings, amounting to half of Leno's, but has had small growth this year. So why all the fuss? Kimmel's contract is up in February, and ABC doesn't want to risk losing its young (44) host.

They're willing to dump "Nightline," so Kimmel is up to speed when Letterman and Leno are out of the picture in a few years. Burke and Comcast are, no doubt, watching ABC's moves closely.

Leno has been the undisputed, number-one, late-night host since 1995, despite the fact that NBC primetime has occupied the network ratings cellar for more than a decade. That doesn't just happen. Leno and his writers produce the most political and topical monologue in late night, which never crosses the thin line into commentary. It's considered the monologue of record among politicos in Washington, and is quoted more than any other monologue.

Leno and his producers consistently book the most compelling and newsworthy guests. In this presidential election cycle, his bookings were way out in front of all his competition, including Letterman and Jon Stewart. Leno got President Obama and Michele Obama first. The First Lady made a return visit just last week. Leno also had all the major Republican presidential hopefuls, including Mitt Romney, who did an exclusive late-night interview with Leno.

Leno has a long history of prevailing despite foolish decisions imposed upon him by his NBC bosses, but he is not invincible. He has never fully recovered from "The Jay Leno Show," aptly described by "Entertainment Weekly" as network television's "biggest bomb of all time." The four-month show, which debuted in 2009, was the brainchild of NBC's then president Jeff Zucker.

Leno's number-one position in late-night has become tenuous, indeed. One would have to be naïve to believe a $25-million cutback won't affect the quality of "Tonight." Slick, produced, high-profile comedy bits done on location at places like the Olympics, the Super Bowl and the political conventions will eventually disappear.

Top guests are essential to late-night ratings, and there are numerous shows to pick from. But now press secretaries, publicists and agents will think twice about booking their clients on a show whose own executives have very publicly withdrawn their support.

Then there is the great intangible: staff morale. Once you lose it, as "The Jay Leno Show" did when I was there, it's very difficult to recover.

My issue with Burke is not that he wants a return on investment, but that he's so short-sighted about it. His actions could very likely result in irreparable consequences to NBC's iconic "Tonight Show" franchise, which will be 60 years old in 2014. I can only hope those consequences are unintended, but it's a nasty business.

Dave Berg was a co-producer at "The Tonight Show with Jay Leno" and "The Jay Leno Show" for 18 years. He's writing a book about the two programs.