Editor’s note: This post was originally published on 8/5/25. It was updated on 8/22/25 to include an addendum on retransmission fees (see bottom of post)
When CBS announced that it was cancelling The Late Show with Stephen Colbert after the 2025–26 season, the decision stunned most industry observers. The Late Show is still the highest-rated program in its time slot, outperforming The Tonight Show Starring Jimmy Fallon and Jimmy Kimmel Live! in total viewers and in the key demos more often than not. To even most insiders, Colbert’s Late Show seemed untouchable.
So why would CBS cancel it?
The timing, of course, is impossible to ignore. Colbert has been a known thorn in the side of Donald Trump, who himself called for Colbert’s termination last fall. And at the time that CBS announced The Late Show’s cancellation, the network’s parent company, Paramount, was in the final stages of seeking regulatory approval for its merger with Skydance from the Trump-controlled FCC. (That approval was granted a week later.)
CBS, in its announcement, termed its decision to cancel The Late Show as “purely financial.” Subsequently, insiders at the network leaked that the show was losing money—to the tune of $40 million dollars.
We asked a network TV research analyst familiar with the financial realities of late night television from the inside (at networks other than CBS) for their thoughts on whether that number rang true.
Their response was a qualified yes: “I would believe anywhere between $25M-$40M.”
“Revenues have dropped at a pace that far outstrips the speed at which costs can be reduced,” added the analyst, who asked to remain anonymous but shared financial modeling with LateNighter for this story.
Though the analyst is bound by non-disclosure agreements from sharing any proprietary network research data, using blended Nielsen ratings, ad pricing estimates, and reported historical production costs for The Late Show, The Tonight Show, and Jimmy Kimmel Live!, they built a hypothetical but (based on their experience) realistic model that lays bare the harsh economic realities faced by the average 11:35pm talk show. Their conclusion: 2022 was the last year most (if not all) of the traditional network late-night television shows likely turned a profit.
As for how we got here, the story begins and ends with the decline in linear ratings.
According to Nielsen Live+7 data, all three network 11:35pm shows—CBS’s The Late Show, NBC’s The Tonight Show, and ABC’s Jimmy Kimmel Live!—have seen declines of 70–80% in the key 18–49 demographic since 2015. That year marked the beginning of a new era: Colbert took over from David Letterman, Fallon had just succeeded Jay Leno, and Kimmel had moved up to 11:35pm.
By 2018 the writing was on the wall that the time period that was once a cash cow was in free fall. According to one frequently cited report from the advertising data firm Guideline, brands spent $439 million advertising on network late-night television that year. By 2024, that number had been cut in half.
YouTube views and digital extensions helped fill the void for a time, but they weren’t nearly enough to stop the bleeding. “Digital is a band-aid, not a cure,” the analyst explained. “It helps, but it doesn’t scale at the level that network TV would need to backfill for what has become a significant loss of traditional ad revenue.”
Another problem unique to the time period: late-night talk shows have almost no library value. Unlike procedural dramas, sitcoms and even some reality programming, they aren’t easily syndicated, streamed, or licensed internationally. “Last year’s jokes about Mitch McConnell aren’t going to be binge-watched in Thailand,” the analyst notes. “You make it, you air it, and it’s done. That’s a very expensive way to run a TV show in the current climate.”
While the production costs of network late-night shows have historically paled in comparison to primetime scripted shows, as audiences and ad revenues have contracted, even those budgets that were once perceived as relatively modest have a largesse that’s out of step with the economic realities of the time period.
Viewing those costs in the context of shrinking ad revenues, a clear tipping point emerges.
In 2015, the typical 11:30pm talk show brought in well over $200 million in revenue and made a healthy profit. By 2023, the same show was underwater, and by 2025, losses are well into the tens of millions of dollars—even with cost controls that have been put into place by most of the major shows in recent years (in aggregate, those cuts have done little to offset the usual salary bumps and other annual cost increases of a long-running show).
Looking ahead, the picture looks even more dire.
Using standard exponential smoothing, the analyst forecasts that losses for a typical 11:35pm network show could reach $70 million annually by 2030. While it’s easy to dismiss this year’s losses as chump change for a television network that sees other benefits from having a successful late night franchise, as that number grows, it becomes harder to justify.
“This isn’t about Colbert, or Fallon, or Kimmel,” the analyst told LateNighter. “The platform economics have changed across the board. It’s like trying to sell newspapers in 2009.”
Update (8/22/25): Since this article was first published, there has been considerable discussion about the role retransmission fees play in the economics of network television. These fees are paid by cable, satellite, and streaming providers to local stations in exchange for carrying their signals.
Retransmission fees have grown sharply in recent years, with total broadcast retransmission revenue exceeding $14 billion in 2022.
National networks typically receive about 50% of those fees from their affiliates, based on the rationale that national programming—particularly major sports events—is the primary driver of viewership and, in turn, retransmission payments to local stations.
With billions of dollars flowing annually to each network through these arrangements, critics—including most prominently Jimmy Kimmel—argue that it’s misleading to judge the profitability of a late-night show by advertising revenue alone, since networks also derive significant income from retransmission fees.
Determining what portion of these fees should be attributed to a single show is far from straightforward. Networks receive the money as a lump sum, though they do attempt internal allocations for accounting purposes. For example, as Puck‘s Dylan Byers reports, CBS values its entire News division—which includes the top-rated 60 Minutes along with three to four hours of additional daily programming—at about $50 million in retransmission revenue.
What value, if any, the broadcast networks assign specifically to their late-night shows remains unclear.
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These shows need to stay out of politics and focus on entertaining us through other avenues. Politics is not entertaining as there will always be one side or another. I used to love watching Jimmy Kimmel, but after his continuous every single day, Trump rant I’m over it I’m bored with it he just comes across as being a person who wants continuous revenge. Leave your personal feelings aside and focus on and entertainment show if you can’t do that sayonara let someone else take place.
Colbert’s ratings didn’t take off until he went after Trump.
This is pretty much what’s happening with all of linear television. It’s the younger viewers and streaming.
Before Jimmel KImmel went on a his daily “Trump rant” that you dislike was before we had an authoritarian, sexual assaulter as the President. His job is to talk about the world. He’s doing it. What should he talk about instead? Clipping his nails? Funny videos of animals?
Exactly. It gets old after you hear it every single night. It becomes not funny anymore. Give me something to laugh about that doesn’t involve freaking politics. It’s late at night, I want to unwind and forget about everything that happened in my long day.
So Colbert and all those liberals/Democrats claiming his show wasn’t losing money were lying.
So, when will they apologize for being wrong yet again?
Also, about half of the advertising revenue goes to the local affiliates, most of them aren’t owned by CBS, so the losses are more extreme for CBS.
Did Colbert say his show wasn’t losing money? I don’t recall that.
Do you really expect “those liberals/Democrats” know the broadcast business?
I think these are all the dollars the networks are pulling in.
This is what I was looking for in terms of late night as a whole and the financial trends, not just some leak from CBS that randos parrot at me in social media. I think that even if there were a network late night TV show that didn’t focus on politics (even though politics has pretty much infused everyday life, and the “horse in the hospital” just keeps getting all the attention), it still wouldn’t really make a dent in the ratings overall.
This is more about the fact that fewer and fewer people are watching network late night television live as it airs. The views on YouTube are substantial, but YouTube numbers do not provide the ad dollars that live television does. What really kills my efforts here in LA to watch late night TV shows as they air is that the entire monologues for all the shows are on YouTube after the show premieres on the East Coast, so I could wait until 11:30 to see the monologue, or listen to it while running errands in the evening. I’m not a Nielsen household, so my viewership is sort of insignificant, but it’s probably more telling of a trend around here in particular. As I heard on the “Inside Late Night” podcast, the shows should put out half the monologues, and then have a graphic saying “Want to see more? Check out the show on TV or on streaming the next day!”
If anyone is going to come back with figures from a show that airs on cable at 7pm in the West Coast (and 5pm in Alaska), spare me. I’m talking about shows on network television at 11:30pm (10:30pm at the earliest) in every time zone. I know that time slots could be considered meaningless, but sleep isn’t. More people are awake and watching television in the early to late evening. Any cable show would get the same or lower numbers if they were to compete with the network shows, but even at its latest, it ends 30 minutes before the network late night shows begin. It’s apples and crabapples.
Nobody cares about Pacific time zone.
According to Nielsen, 81% of TV viewing for Q2 2025 total day viewing came from Eastern and Central time zones.
Well, that’s just reflective of the population. About 76% of the U.S. Population are in the Central and Eastern Time Zones. However, if one of the shows could find a way to get more people in Seattle, Portland, SF, and especially LA to tune in, that could be substantial. I think that was among the reasons “SNL” went to simultaneous broadcasting across the country (aside from the fact that NBC’s Saturday evening schedule aside from “SNL” is pretty abysmal). It gave the West Coasters a reason to see the show live instead of seeing clips of the show as they were being released on YouTube before the west coast feed went out at 2:30 AM ET.
Someone is lying, I know it is the person who put together this Data for you. Late Night is still the most profitable (non-sports) hour on TV. ABC has the View which is only the hour that compares. NBC has SNL, which is the most profitable “show” on TV, but that is 90 minutes. Trust me, I work for CBS and before the “insanity” with the merger. We (the people making decisions) would have given away our entire families to have The View or SNL on our schedule.
NBC acknowledges that their late night staples of Fallon, Seth Meyers, and SNL loses $100 million per year.
Are you sure you haven’t been played by this “mystery analyst?” I don’t view Paramount as a particularly honest entity, given the bribe they just paid Trump.
Also a lot of the time on the Late Show seems to be promoting other Paramount products, such as this week with their movie “Weapons.” With both Garner and Brolin on the show in two consecutive nights, it’s going to be hard to make up for that lost publicity. It’s like the film had a 20 minute infomercial.
Nobody is being played. CBS also got rid of “After Midnight” and the whole 12:35am hour well before the “bribe.”
Lily Singh was cancelled by NBC and Fallon was reduced to four nights per week and Seth Meyers had budget cuts.
Never mind, that’s a Warner Bros. film.
I miss the days of Carson, Leno and Letterman. They didn’t get political every single night. They had fun, joked about everything not about one single person every single night.
I was burned out on Kimmel, Colbert and Fallon. They became boring. Not amusing anymore. It got old fast.