CBS canceling Colbert raises questions about late night

There are two schools of thought around CBS’ decision to end “The Late Show with Stephen Colbert.”

The first says the cancellation is a one-off exit from the storied time slot — that Paramount was trying to push through the red tape to finally merge with Skydance Media, a deal that was approved by the Federal Communications Commission Thursday after more than a year in limbo.

The other says it signals the beginning of the end of late night TV.

The entertainment industry will have a better sense of where the truth lies next year when Disney decides the fate of Jimmy Kimmel’s late night show, “Jimmy Kimmel Live.”

While NBC recently extended the contracts of its two late night hosts, Jimmy Fallon and Seth Meyers, into 2028, Kimmel’s contract is set to lapse in 2026.

“Jimmy Kimmel Live” has been a late night staple since 2003, acting not only as a typical talk show on the circuit, but as a valuable marketing hub for Disney’s slate of theatrical and television content. In addition to traditional one-on-one interviews, Kimmel will also frequently host several stars from the same project, often for blockbuster titles from Marvel, Star Wars and the company’s animated franchises.

Clips from these chats are fed onto Kimmel’s YouTube channel, which has more than 20 million subscribers, and across social media, helping to generate buzz for upcoming Disney projects.

For comparison, Fallon’s show account has around 32 million subscribers, while Colbert’s stands at 10 million and Meyers’ at just over 5 million.

Kimmel is also a frequent host of the Academy Awards, which airs on Disney’s ABC, and is currently the host of ABC’s celebrity edition of “Who Wants to Be a Millionaire.” These ancillary assignments, as well as his annual job closing out Disney’s Upfronts presentation for advertisers, may make Kimmel more important to Disney’s long-term future than Colbert was for Paramount or CBS.

Still, while the next test of media’s commitment to late night is months off, the end of “The Late Show with Stephen Colbert” is calling attention to the mounting pressures on traditional TV and raising questions about the whether the time slot can survive the evolving viewing landscape.

The cost of producing late night programs has risen as the media industry has been upended by streaming and shifting consumer habits. The traditional pay TV bundle has lost millions of customers in recent years, and as they’ve disappeared, so too have advertising dollars.

The shifting equation has forced media companies to rebalance.

At a large scale, companies like Comcast’s NBCUniversal and Warner Bros. Discovery have opted to split off their cable TV networks into separate corporate entities.

At the programming level, big shows are increasingly greenlit for release on streaming services rather than traditional networks. Salaries of highly paid news anchors have moderated, with some stepping away from traditional networks entirely and starting out their own ventures. And much of the money spent on bulking up both linear TV networks and streaming services is earmarked for live sports.

That leaves familiar titles in flux.

“The Late Show with Stephen Colbert” employed around 200 people and recorded annual losses of around $40 million, according to a person familiar with the matter, who declined to be named speaking about nonpublic matters. The suite of NBC’s late night shows — “The Tonight Show Starring Jimmy Fallon,” “Late Night with Seth Meyers,” and “Saturday Night Live” — lose more than $100 million per year, said a person familiar with the shows’ finances. An NBC spokesperson declined to comment.

“Jimmy Kimmel Live” employs around 250 people and loses money based on cost relative to traditional TV advertising, according to a person familiar with the matter. Still, the show is profitable if more than just traditional TV advertising revenue is taken into account, according to a second person directly familiar with the show’s finances. “Jimmy Kimmel Live” helps ABC boost affiliate revenue when it strikes carriage deals with pay-TV distributors. The show’s YouTube viewership for the 2024-25 season was the highest among late night shows despite having fewer YouTube subscribers than “The Tonight Show,” according to Tubular Labs. A Disney spokesperson declined to comment.

While the pay-TV bundle still rakes in the highest share of profits for legacy media companies – much of which stems from the fees that pay-TV distributors hand over to the networks to be included in the bundle – that figure is in decline.

Linear TV advertising revenue has also been on a steady downward slope. Industry analysts and experts expected the ad market to stabilize in 2025 after tumultuous streaming-centric years, but macroeconomic uncertainty has hampered the recovery.

In quarterly earnings that were reported in May, Paramount, NBCUniversal and Disney each reported lower ad sales on a year-over-year basis.

Paramount reported in May that its first-quarter TV advertising revenue was down 21% to $2.04 billion, mainly due to comparisons to the prior-year period when the company had the Super Bowl. That championship beckons the most ad dollars of any live event on TV. Without the Super Bowl, ad revenue would have been flat, the company said. Overall revenue for Paramount’s TV segment was down 13%.

Of the traditional TV ad spend that does remain, the biggest share has gravitated to live sports, which draw the biggest audiences. NBCUniversal recently touted its record ad sales volume during the most recent Upfront cycle due to an upcoming slate of NBA, the Super Bowl, Winter Olympics and other sports.

Disney reported in May that quarterly revenue for its domestic linear networks was down 3% to $2.2 billion, attributing the decline to lower ad revenue. Still, Disney noted ad revenue for ESPN and sports in general saw an increase in ad revenue.

These headwinds help legitimize Paramount’s decision to cancel “The Late Show with Stephen Colbert,” but the timing of the program’s end has raised suspicions.

The announcement that Colbert’s show would take its final bow in May 2026 came just days after the tenured host publicly called out Paramount for its $16 million settlement with President Donald Trump over the editing of a “60 Minutes” interview with former Vice President Kamala Harris.

Colbert called the settlement a “big fat bribe” during one of his show-opening monologues, referencing the then-pending merger between Paramount and Skydance Media, which required the approval of the Trump administration to proceed.

Paramount and CBS executives released a statement last week saying the cancellation was “purely a financial decision against the challenging backdrop in late night.” Skydance executives weren’t involved in the decision making or aware of the show’s cancelation, according to a person familiar with the matter.

“It is not related in any way to the show’s performance, content or other matters happening at Paramount,” the company continued.

While ratings for Colbert’s show have declined over the last decade, the program has consistently achieved the highest views of any show in the 11:35 p.m. hour, outdrawing ABC’s “Jimmy Kimmel Live” and NBC’s “The Tonight Show Starring Jimmy Fallon,” according to Nielsen.

Still, Colbert’s ratings have been declining each season. For the most recent September-to-May time period, Colbert averaged roughly 1.9 million viewers, with the majority of viewership coming in the age demographic of over 65, according to Nielsen — a telling data point about the state of TV viewership.

Kimmel’s viewership paints a similar picture, with viewership dropping from the September-to-May time period in 2019-2020 to the most recent in 2024-2025, when the average was nearly 1.6 million viewers, according to Nielsen.

When Paramount listed its slate of highly rated TV shows during its last earnings report, including “Tracker,” the top rated series and “Matlock,” the highest rated new series, it also listed Colbert’s “The Late Show” as the highest rated broadcast late night show. “The Daily Show,” also from Paramount, was the top late night show on cable TV.

Some industry experts have questioned whether CBS could have explored other ways to save money — or save late night — besides outright canceling “The Late Show.” NBC cut costs by eliminating the band on Meyers’ late night show and shifting Fallon to four nights a week instead of five.

CBS tried to bring a younger demographic into the hour with “After Midnight,” a late night show that ran after Colbert. The show was hosted by comedian Taylor Tomlinson and was centered on viral internet phenomena.

Though CBS intended to renew the show after its first two seasons, Tomlinson decided not to extend her contract, and the show was canceled.

Disclosure: Comcast owns NBCUniversal, the parent company of CNBC.