Analyst: Network Late-Night Talk Shows Became Unprofitable in 2023 (Updated)

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.

Show some respect for the second coming!