NBC Bet $69 Million on Megyn Kelly Then Viewers Vanished [View all]

Megyn Kelly was supposed to bring star power to NBC News and a bigger, broader audience of morning viewers to its “Today” show franchise. Instead, the three-year, $69 million bet to woo Ms. Kelly from her conservative prime-time perch at Fox News is backfiring.

Since taking over the 9 a.m. hour of the lucrative morning show in September and rebranding it “Megyn Kelly Today,” Ms. Kelly has struggled to make the shift to daytime broadcast television, with its delicate balance of soft features and hard news. Her ratings declines and higher production costs have been a drag on a critical franchise for NBC.

“I need to introduce myself to people who don’t know me or know some bastardized version of me that they’ve gotten from a website or a TV show,” Ms. Kelly said in an interview. “There are definitely some who only know me through some caricature they learned about on ‘The Daily Show.’ ”

Some of NBC’s affiliate TV stations are unhappy with the drop in viewers, and staffers on other NBC News shows have been grumbling about Ms. Kelly’s lofty budget. Hollywood publicists started steering their A-list talent away from the program when a feud erupted with Jane Fonda after Ms. Kelly asked the actress on-air about her plastic surgery.

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In addition, Ms. Kelly’s Sunday night newsmagazine, which premiered to disappointing ratings last summer, has been reduced to occasional prime-time specials.

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The turmoil during Ms. Kelly’s first year at NBC—along with the high-profile exits of NBC’s Matt Lauer and CBS’s Charlie Rose due to sexual-harassment allegations—have shaken up morning TV news, underscoring the big risks of high-stakes wagers on celebrity news personalities.

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Ms. Kelly’s ratings are also hurting the 10 a.m. hour of “Today” with Hoda Kotb and Kathie Lee Gifford, according to Nielsen data. That hour of the show, which focuses on lighthearted lifestyle and celebrity news, is down 6% in viewers and 19% among adults 25-54.

The performance of “Megyn Kelly Today” has allowed its chief rival, Walt Disney Co.’s syndicated chat show “Live with Kelly & Ryan,” to more than double its lead over NBC in that hour to 747,000 viewers.

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The “Today” franchise is key to NBC News and its parent NBCUniversal, a unit of Comcast Corp. “Today” generates more than $500 million in revenue and profits of more than $100 million annually, people close to the show said. It is the most successful and important program on the network and is the main profit center for NBC News.

“Megyn Kelly Today” is vastly more expensive for NBC than its predecessor, which was more clearly an extension of the “Today” show with shared resources. The combined salaries of previous hosts Al Roker and Tamron Hall were less than half of Ms. Kelly’s $23 million-a-year payday, according to several people familiar with the matter. Ms. Kelly declined to comment on her salary.

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Other ungainly moments have taken place with celebrities, most prominently with Jane Fonda. Ms. Fonda took offense at Ms. Kelly asking about her plastic surgery during an interview about a new movie with her and Robert Redford. Ms. Fonda made jokes and mocked Ms. Kelly several times after that, including on a different “Today” segment, prompting Ms. Kelly to launch a Fox News-style attack on Ms. Fonda.

“This is a woman who is synonymous with outrage. Look at her treatment of our military during the Vietnam War. Many of our veterans still call her ‘Hanoi Jane’ thanks to her radio broadcasts, which attempted to shame American troops,” Ms. Kelly said on her show in January.

The “Hanoi Jane” rant, as it became known, was seen as an extreme overreaction inside “Today.”

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