Management upheaval at NBC Universal's broadcast network during the all-important advertising sales season could prove to be the biggest challenge yet for newly installed Chief Executive Jeff Zucker.
On Sunday, Zucker and top NBC Universal executives were negotiating with Kevin Reilly, president of NBC Entertainment, to terminate his three-year contract that was renewed in March, said two people close to the negotiations who asked not to be named because of the sensitivity of the situation.
Just two weeks ago, Reilly unveiled NBC's new prime-time fall schedule, including four new shows, to hundreds of advertisers gathered in Radio City Music Hall in New York. In the coming weeks, NBC sales executives will try to sell the bulk of the network's commercial advertising inventory for the season that begins in September.
Neither Reilly nor NBC would comment Sunday. One person close to the situation said the issue should be resolved by Tuesday.
The shake-up comes after months of rising tensions between Reilly and his New York bosses. NBC finished the TV season last week in fourth place in the prime-time ratings, a big disappointment for the onetime network leader.
Assembling the right programming team in Burbank will be a closely watched and crucial decision for Zucker, who in February was named CEO of the media conglomerate owned by General Electric Co.
In addition to Reilly's departure, the head of NBC Universal Television Studios, Angela Bromstad, is expected to leave her position for another job within the company, according to three insiders.
Further complicating the matter, Katherine Pope, another fast-rising star within NBC Entertainment who also is Reilly's second-in-command, expressed frustration last week over proposed changes in the management structure, according to two executives. NBC has been weighing whether to combine the television studio with the network to create one programming team -- an effort in part to cut costs.
Bromstad, whose production unit was behind NBC's biggest new hit, "Heroes," declined to comment Sunday. Pope could not be reached for comment.
The situation with Reilly came to a head late last week after he learned that his boss, Marc Graboff, the top television executive on the West Coast, and Zucker were talking to candidates for a new position they planned to create that would usurp much of Reilly's authority, according to two people with knowledge of the matter.
Then, on Friday, these people said, an e-mail was anonymously sent to Reilly and others in Hollywood saying that he would be replaced by Ben Silverman, a young producer who is behind such popular shows as NBC's "The Office," ABC's "Ugly Betty," and "The Tudors" on Showtime.
Reilly called his boss and asked to be let out of his contract. The NBC Entertainment leader felt he didn't have Zucker's full support and that other executives were undermining his authority, according to two people familiar with his thinking.
Reilly, 44, was successful in finding new hits that struck a chord in pop culture, including "Heroes," "My Name is Earl," and "The Office." But he also tangled with his bosses by going out on a limb for several costly duds, including Aaron Sorkin's "Studio 60 on the Sunset Strip" and "Kidnapped." Both shows have been canceled.
Despite developing a new crop of promising shows last year, NBC fell further behind Fox, CBS and ABC after the professional football season ended, which had buoyed NBC's ratings in the fourth quarter.
Silverman told The Times on Friday that he was not taking Reilly's job. "I'm involved in something else," he said via e-mail.
But there was speculation Sunday that he was talking to NBC about overseeing both the network and the television studio.
Silverman did not respond to an e-mail inquiry Sunday.
Times staff writer Scott Collins contributed to this report.