Why ABC wants a 20 percent cut before Jimmy Kimmel signs on again

Jimmy Kimmel and ABC are negotiating what comes after his current contract runs out in May 2027, and the holdup is money. Debra O'Connell, chair of Disney Entertainment Television, has asked the show to cut its budget to keep it on the air, according to TheWrap; Puck's Matthew Belloni reported, in an account relayed by AOL, that a source close to the situation called a 20 percent reduction in the current budget "a fair estimate." Jimmy Kimmel Live already costs about $100 million a year to produce, the same figure that had been attached to Stephen Colbert's Late Show before CBS canceled it in 2025.

Neither side has walked away. Kimmel has told Disney and ABC he wants to keep going, and Puck's Matthew Belloni reported, as relayed by TVInsider, that the show "isn't fired" and "isn't canceled — not yet, at least." But the shape of any deal beyond 2027 now runs through a budget fight that mirrors what has already happened elsewhere in the format, and through a regulatory episode from a year earlier that has not fully faded.

A Contract That Keeps Getting Shorter

Kimmel's talent deals used to run three years at a stretch. His most recent one, signed in 2025, ran only one — through May 2027 — a length TheWrap and Variety both flagged as unusual, given that Kimmel has hosted the show since January 2003. Variety reported the one-year extension was actually finalized in the summer of 2025, before Kimmel's later suspension, and that he announced it on Instagram with the line "I am pleased to announce another no-talent year!"

The short renewal left the bigger question — what happens after 2027 — unresolved, and that is the question now on the table. AOL reported that ABC has publicly rejected claims that this season would be Kimmel's last, calling such reports "purely speculative" and "inaccurate," even as the network presses him on cost. Variety's reporting also noted that producers across the format now track YouTube subscriber counts alongside overnight Nielsen ratings.

What $100 Million a Year Buys, and Why It's a Target

TheWrap and AOL both put Jimmy Kimmel Live's annual production cost at approximately $100 million, matching the figure reported for The Late Show With Stephen Colbert. CBS canceled Colbert's show in July 2025, ending it entirely at the close of the 2025-26 season rather than replacing him, and said the move was "purely a financial decision" that was "not related in any way to the show's performance, content or other matters happening at Paramount," according to PBS NewsHour's reporting. Colbert's show was, by PBS's account, the highest-rated legacy late-night program even as it drew only about 2.4 million nightly viewers.

PBS NewsHour also laid out why the timing drew scrutiny: the cancellation came days after Colbert criticized Paramount's $16 million settlement of a Trump lawsuit as a "big fat bribe," and while Paramount was separately pursuing a merger with Skydance that needed approval from the Trump administration. President Trump said publicly, "I absolutely love that Colbert got fired." NPR critic Eric Deggans, quoted in the same piece, acknowledged that real financial pressure existed on the show while also noting that "everyone understands that the Trump administration can punish media outlets." That ambiguity — genuine cost pressure entangled with political sensitivity — is the same terrain ABC and Kimmel are negotiating on, given that his own show was briefly pulled off the air roughly a year earlier over political remarks.

Set against that backdrop, a Disney executive asking for cuts on a show that costs the same as one CBS just shut down is, in effect, arguing that the current cost structure of network late night is no longer sustainable on its own terms.

The Ratings and Ad Math Behind the Squeeze

The financial pressure is not limited to one show. Adweek, citing data from Guideline, reported that linear ad spending across ABC, CBS and NBC's late-night programming fell from $439 million in 2018 to $220.6 million in 2024 — a roughly 50 percent drop over six years — before ticking up 6.1 percent in the first half of 2025. TheWrap's reporting on the format put more detail behind that decline: ad revenue for The Late Show dropped about 25 percent from 2022 to 2024, while The Tonight Show Starring Jimmy Fallon fell even further, down 35 percent over the same span. The Late Show's own nightly audience, meanwhile, shrank from 3.81 million six years earlier to 2.4 million by the second quarter of 2025.

Kimmel's own numbers have moved in the same direction. Fox Business reported that Jimmy Kimmel Live's share of the 18-49 demographic, the audience advertisers pay the most to reach, fell from 0.68 in the 2013-14 season to 0.16 in 2024-25, and cited LateNighter estimates that the show has lost 70 to 80 percent of its viewers since 2015. A network analyst quoted in that reporting said 2022 was likely the last year most or all traditional network late-night shows turned a profit.

TheWrap's reporting points to a structural mismatch behind those numbers: production costs have stayed high — one former producer described the shows as "bloated" with staffing and salaries that no longer match what they earn — even as the audience that generates broadcast ad revenue keeps shrinking. Digital reach has not closed the gap. The Tonight Show has amassed 76.3 million social media subscribers and generated 9.2 billion views in a single year, but as a CBS insider put it in the same reporting, "YouTube is digital dimes versus network dollars."

A Suspension Still Hanging Over the Talks

The budget dispute is unfolding against the backdrop of Kimmel's suspension in September 2025. Disney pulled Jimmy Kimmel Live off the air on September 17 after Kimmel's monologue about the killing of conservative activist Charlie Kirk, following pressure from Federal Communications Commission Chairman Brendan Carr, who called the remarks "the sickest conduct possible" and raised the prospect of revoking ABC affiliate licenses.

Nexstar, which operates more than 200 television stations nationwide and had a pending $6.2 billion acquisition awaiting FCC approval, preempted the show in response. According to a Wikipedia account of the episode, Disney executives Bob Iger and Dana Walden then negotiated with Kimmel's team over the weekend of September 20, with talks concluding on the morning of September 22; a source close to the negotiations said the understanding for Kimmel's return was that "Jimmy will say what Jimmy wants to say." The show returned to air on September 23. TVInsider's reporting notes that Belloni flagged potential FCC and political complications as separate obstacles that could still affect the show's future, distinct from the budget question now on the table.

What Late-Night Shows Still Buy a Network

The pressure to cut costs does not mean networks see no value left in the format. TheWrap's reporting on late night's future notes that shows like Kimmel's still function as promotional platforms for a media company's films and other products, help cultivate on-air talent, and provide a nightly venue for cultural and political commentary that other programming doesn't offer. Those functions are part of what any renewal negotiation is weighing against the raw production-cost math.

Industry observers cited in that reporting suggested the format's future may lie less in preserving the traditional broadcast format and more in shorter digital formats or podcasts, pointing to Conan O'Brien's podcast as an example of a host finding a viable audience outside the network structure. No comparable successor format has clearly emerged for a show the size of Kimmel's.

What Kimmel Wants, and What Happens Next

AOL reported that Kimmel, 58, is not looking to leave and reportedly hopes to remain on the air through the 2028 election, feeling what the outlet described as a sense of responsibility to continue as late night's political commentator. TVInsider's sourcing suggests Kimmel still holds a ratings edge over competitors like Jimmy Fallon's Tonight Show, even as the overall audience for the format shrinks.

No new deal has been announced, and neither Disney nor ABC has confirmed the specific 20 percent figure publicly. What is confirmed, across multiple outlets, is that a budget cut of some size is now a condition Disney has attached to any extension past May 2027 — the same condition, in different proportions, that has already reshaped or ended other network late-night shows.