Why CBS Canceled the Late Show (And What It Says About the Future of TV)

If you’ve ever wondered how TV shows live or die, here’s the inside scoop: the currency of media is ratings.

For decades, Nielsen has been the financial translator between media companies and advertisers. And as someone who worked at Nielsen for 15 years, I have a few thoughts about CBS pulling the plug on The Late Show—even though it was the top-rated show in its time slot.

But, first. A preface. This is not an opinion piece about Stephen Colbert, CBS, or the suspicious timing of this announcement. As a former employee of Nielsen, where I utilized ratings and worked with advertisers for 15 years, I wanted to provide an analysis of the current situation. Many people are speculating, and I understand why. Once I looked into the data, I could see the picture.

And here is how it looks.

Ratings = Money

In media, many employee bonuses are tied to performance. And that performance is measured in ratings.

Here’s a real-world example. Let’s say The Weather Channel sees a huge spike in viewership during a major event like the California wildfires (as it did in early 2025). If their Q1 ratings exceed performance expectations, employees may receive a bonus. That’s how closely ratings and compensation are linked.

Now, in the world of scripted entertainment, you can actually try to control those ratings by creating irresistible, binge-worthy shows, like Friends, Modern Family, and The Office. The better the ratings, the more advertisers are willing to pay for a slice of the viewership pie.

Here’s how that pie gets baked:

1. Advertisers pay networks to run commercials.

2. Networks use ratings to prove how many eyeballs are on a given show.

3. More eyeballs = higher ad rates paid to the network by the advertiser.

So, if you’re Procter & Gamble, you might pay one rate to advertise Tide at 2PM and a much higher rate to run that same ad during prime time. That’s the model. Simple in theory. Wild in practice.

But What If a Show Loses Money?

Here’s the interesting thing: even when a show is expensive, networks don’t always care—at least not right away.

Take Friends. In its final seasons, the cast famously negotiated that each of them be paid $1 million per episode. NBC was reportedly losing money on the show, but it continued nonetheless. Why?

Because it was a loss leader. People tuned in for Friends and then stayed for whatever came next. Plus, syndication was (and still is) a goldmine. Once a show is produced, reruns continue to generate ad revenue for years to come.

So What Happened to The Late Show?