Stephen Colbert’s announcement on Thursday night that “The Late Show” was being canceled by CBS stunned the entertainment industry, the public and even his staff.
But the writing had been on the wall for some time.
“The Late Show,” a fixture of the network for over three decades, was racking up losses of tens of millions of dollars a year, and the gap was growing fast, according to two people familiar with the show’s finances. Like other late-night shows before it, “The Late Show” was canceled when the network could not figure how to make the finances work in an entertainment world increasingly dominated by streaming.
So as CBS executives mapped out the schedule and budget for next year, George Cheeks, CBS’s president, decided in recent weeks that the network couldn’t take those losses any more, the two people said. Mr. Colbert learned of the decision on Wednesday night. Shari Redstone, the controlling shareholder of Paramount, CBS’s parent company, learned about it on Thursday, according to two other people.
The cancellation underscores just how rapidly the late-night genre has fallen. Not even “The Late Show,” the highest rated of those network talk shows, was safe, as many in the entertainment industry assumed it was.
Nevertheless, questions lingered on Friday about whether political calculations — not strictly financial ones — had played a role in the decision as well.
Paramount is closing a multibillion-dollar merger with the movie studio Skydance, a deal that still requires approval from the Trump administration. Early this month, Paramount agreed to pay President Trump $16 million to settle a lawsuit over an interview on CBS’s “60 Minutes.” Mr. Colbert, a longtime critic of Mr. Trump, called that settlement “a big fat bribe” on his show this week.
Mr. Trump celebrated the news of the show’s cancellation on Friday. “I absolutely love that Colbert’ got fired,” he said on social media. “His talent was even less than his ratings.”
Senator Bernie Sanders, independent of Vermont, said on social media on Friday: “Stephen Colbert, an extraordinary talent and the most popular late night host, slams the deal. Days later, he’s fired. Do I think this is a coincidence? NO.”
The Writers Guild of America, the union that represents thousands of TV and movie writers, said on Friday that it had “significant concerns that ‘The Late Show’’s cancellation is a bribe, sacrificing free speech to curry favor with the Trump administration as the company looks for merger approval.”
CBS executives said in a statement on Thursday that the cancellation was “not related in any way to the show’s performance, content or other matters happening at Paramount.”
Even five or six years ago, many network and late-night shows remained comfortably profitable.
That began to change around the Covid-19 pandemic and has accelerated since. Last year, the network late-night shows drew an estimated $220 million in advertising revenue, 50 percent less than seven years earlier, according to Guideline, an advertising data firm. “The Late Show” alone lost $50 million in ad revenue over that period, Guideline said.
In part that’s because during their heyday, late-night shows were propelled to profitable heights by their popularity with younger audiences, the most appealing demographic for advertisers. But many of those younger viewers were the first ones out the door as digital and streaming options proliferated.
Although many genres of American television have successfully made the leap to streaming — sports, prime-time scripted shows, reality series, even soap operas — far fewer people watch entire episodes of topical talk shows on platforms like Paramount+, Peacock and Hulu. Instead, people increasingly consume the shows in bite-size clips on YouTube and social media platforms.
The hosts themselves have not been shy about the difficult landscape. “I don’t know if there will be any late-night television shows on network TV in 10 years,” Jimmy Kimmel, the ABC late-night host, said a year ago.
In May, the “Daily Show” host Jon Stewart likened himself to the manager of a Tower Records store in an era with Spotify and YouTube. “People are always going to want music, but I’m still the guy who’s like, ‘Come into my giant building and let me show you the new CD rack,’” he said on a podcast.
Over the past couple of years, many of the surviving late-night shows cut their budgets. Network late-night shows now generally produce four new episodes a week, down from five, in an attempt to save money. “Late Night With Seth Meyers” now frequently tapes two episodes on Mondays to limit filming to three days a week.
“The Late Show” began losing money at least three years ago, two people familiar with the finances said. Like “The Tonight Show Starring Jimmy Fallon” on NBC, it cost more than $100 million a year to produce. CBS executives weighed the possibility of trying to find ways to sharply reduce its budget but, amid the mounting losses, concluded that there was not a viable path to profitability, one of the people said.
On Thursday, Mr. Colbert completed taping nearly the entire episode before he convened a staff meeting where he broke the news, leaving the employees floored. Mr. Colbert then went back onstage and told his audience the news, remarks that would be the new opening to that edition of “The Late Show” and soon ricochet all over social media.
“I’m just as shocked as everyone,” Mr. Fallon, the NBC host, posted on Friday. “Stephen is one of the sharpest, funniest hosts to ever do it.”
He continued: “I really thought I’d ride this out with him for years to come.”
Benjamin Mullin contributed reporting.
John Koblin covers the television industry for The Times.
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