Is The Late Show cancellation Crony Capitalism's most recent assault on the Free Press?

Officially, network executives insist the move was “purely a financial decision” driven by the harsh economics of late-night TV, not by the show’s performance or content

However, the timing – coming days after Colbert lambasted a settlement that CBS’s parent company reached with Donald Trump amid a pending Paramount–Skydance merger – has led many to question whether political pressures also played a role . This report examines both angles, analyzing The Late Show’s profitability (advertising revenue, costs, ratings, and late-night trends) and the political/regulatory context surrounding its cancellation.

• Declining Advertising Revenue: Annual ad revenue for Colbert’s Late Show plunged from $121.1 million in 2018 to about $70 million in 2024, a drop of roughly 40% . An alternative estimate by iSpot.tv shows 2024 ad sales even lower (≈**$57.7 million**, down from $75.7M in 2022) . This collapse in ad dollars reflects a broader trend – total ad sales across all broadcast late-night shows fell from $439 million in 2018 to just $220 million in 2024, as younger viewers drifted away . A CBS insider bluntly noted that “late night advertising fell off a cliff” around 2021, leaving Colbert’s show “losing money despite its strong ratings”.

• High Production Costs and Losses: Running a nightly 11:30pm franchise is expensive – from host salary and writers to a full crew and band. A former TV executive said that 15 years ago a hit late-night show might net $100 million annually, but today the economics have flipped . According to a person briefed on CBS’s finances, The Late Show had been losing on the order of $40 million per year recently. In other words, its annual costs outstripped revenues (now ~$60–70M) by tens of millions. CBS described the late-night business as “a challenging backdrop,” implying the Colbert show was no longer financially viable under a traditional network model. Indeed, insiders acknowledge the cancellation of such a high-profile, Emmy-nominated show was an “agonizing decision,” but one made to stem further losses .

• Viewership Trends: While Colbert remains the most-watched host in his slot, the absolute audience has shrunk along with all linear TV. The Late Show peaked at ~3.1 million nightly viewers in 2017–18 (early in Trump’s presidency), but averaged only ~1.9 million by the 2024-25 season . (For context, as recently as a decade ago Jay Leno or David Letterman could draw 4–5 million nightly). Even though Colbert led the pack in 2023–25 with around 2.4 million viewers for new episodes , that “#1 in late night” audience is a fraction of what late-night shows once delivered. Crucially, the coveted 18–49 demographic is eroding even faster – The Late Show lost about 20% of its young adult viewers since 2022 , cutting into ad rates. Much of Colbert’s fanbase now consumes his sharp monologues as viral clips on YouTube and social media the next day. But those digital views, while in the millions, don’t translate into equivalent revenue for CBS. Online ads and YouTube monetization haven’t offset the loss of traditional TV ad income . In short, the show’s reach remained culturally significant, but its profitability had evaporated – a point CBS management emphasized in justifying the shutdown.

Bottom Line: On pure financial grounds, The Late Show’s cancellation fits the pattern of late-night contraction. The show had a loyal audience and cultural impact, but its advertising revenue plunged and it was reportedly running tens of millions in the red annually.

Political Context: Colbert’s Content and the Skydance–Paramount Merger

Although the economics explain why CBS might consider ending Colbert’s show, the timing and context of the announcement raise the question of political influence. The cancellation came on the heels of several politically charged events involving Paramount (CBS’s parent company), Stephen Colbert’s on-air criticism (over the $15M settlement over a Harris interview on 60 minutes), and the Sundance merger, which requires FCC approval.

The Writers Guild of America (WGA), which represents Colbert’s writing staff among thousands of others, has gone so far as to label the cancellation a potential “bribe” to the Trump administration . In a statement, WGA said it has “significant concerns” that Paramount sacrificed a free-speech platform “to curry favor with the Trump Administration” in hopes of winning the merger’s approval . The guild urged New York’s Attorney General to investigate whether the cancellation itself violated any laws or public trust by trading content decisions for regulatory leniency . Such stark language from the WGA highlights how unprecedented this situation appears – creative professionals see it as a chilling example of government pressure potentially silencing a prominent voice.

Media commentators also weighed in on the significance. TheWrap’s analysis argued that while late-night economics have shifted, dropping Colbert – the highest-rated host – feels like a damning blow to free speech. It described the move as “further capitulation to Trump to silence one of his loudest critics”, calling it “a damning blow to free speech” if indeed done under political duress . The Los Angeles Times likewise noted the “poor optics” of the situation and said it “will draw even more scrutiny” because it occurred “amid a politically turbulent climate for free speech” . However, some analysts cautioned that the simplest explanation remains the financial one – that CBS, facing a bleak TV advertising market, made a cold business calculation. Rich Greenfield, a media analyst, wrote that legacy media firms should probably not be funding expensive scripted programming (outside of live sports and news) in this environment. “Ending ‘The Late Show’ is the tip of the iceberg,” Greenfield warned, predicting more deep cost-cutting to come across networks . In other words, even absent any politics, Colbert’s show might have been doomed by the balance sheet sooner or later.

Frankly, after researching a good piece of Paramount's business, and their very serious concerns around debt and declining revenue, I do think that Occam's razor could apply here (the simplest explanation is usually the right explanation). However, my eyebrows are raised around the timing, especially when you consider that deep cost cutting measures like this normally happen AFTER M&A. But there is no clear evidence of this right now. If it comes out, I won't be surprised.

This was a fun one to research & I think it shows how actually studying businesses helps you see the chessboard better.

(This post was written with the help of ChatGPT's Deep Research)