CBS News, Katie Couric

After two years of record-low ratings, both CBS News executives and people close to Katie Couric say that the "CBS Evening News" anchor is likely to leave the network well before her contract expires in 2011 -- possibly soon after the presidential inauguration early next year.

Katie Couric and CBS are prepared for her early exit from the network.

Ms. Couric isn't even halfway through her five-year contract with CBS, which began in June 2006 and pays an annual salary of around $15 million. But CBS executives are under pressure to cut costs and improve ratings for the broadcast, which trails rival newscasts on ABC and NBC by wide margins.

Her departure would cap a difficult episode for CBS, which brought Ms. Couric to the network with considerable fanfare in a bid to catapult "Evening News" back into first place. Excluding several weeks of her tenure, Ms. Couric never bested the ratings of interim anchor Bob Schieffer, who was named to host the broadcast temporarily after "Evening News" anchor Dan Rather left the newscast in the wake of a discredited report on George W. Bush's National Guard service.

In a statement yesterday, a "CBS Evening News" spokeswoman said, "We are very proud of the 'CBS Evening News,' particularly our political coverage, and we have no plans for any changes regarding Katie or the broadcast." In a separate statement provided by another spokeswoman, Ms. Couric said, "I am working hard and having fun. My colleagues continue to impress me with their commitment to the newscast, and I am very proud of the show we put on every day."

Adding to the pressure on CBS to improve the newscast is the faltering performance of CBS's prime-time schedule and CBS Corp. itself. CBS's stock price has slumped in recent months amid questions about the company's growth potential. Its broadcast network is a key revenue source for CBS -- more so than for most media companies, which tend to have a wider array of assets.

It's possible that Ms. Couric could survive if a major news event lifted the newscast's ratings or some other shift occurred at CBS.

Assuming the two part ways, it's unclear what will happen to either the "Evening News" or Ms. Couric. CBS executives are investigating which prominent news personalities are nearing the end of their contracts.

One possible new job for Ms. Couric: succeeding Larry King at CNN. Mr. King, who is 74 years old, has a contract with the network into 2009. CNN President Jon Klein, a CBS veteran with close ties to some at the network, has expressed admiration for Ms. Couric's work, and the two are friends. They had lunch in late January, and the anchor attended Mr. Klein's birthday party in March. Time Warner Inc.'s CNN said, "Larry King is a great talent who consistently delivers the highest profile guests, and we have no plans to make a change." Through a publicist, Mr. King declined to comment.

Mr. King's talk-show slot at CNN might be a better fit than evening-newscast anchor for Ms. Couric, who is 51. She made her reputation as a skilled interviewer when she was an anchor at the "Today" show on General Electric Co.'s NBC network.

CBS Chief Executive Les Moonves lured Ms. Couric to CBS with promises that the staid "CBS Evening News," once anchored by Walter Cronkite, would be remade in a format more suited to her skills. He vowed to dedicate more money to the broadcast and to build up its Web presence. People close to Ms. Couric complain that the network didn't follow through on all those promises.

When she started on the show in September 2006, Ms. Couric incorporated longer interviews, occasionally conducted in front of a fireplace, and chatty asides into the broadcast. For the first few days, curiosity drove more than 10 million viewers to tune in, but in the months that followed, Ms. Couric's ratings plummeted to a low for the broadcast, bottoming out to around five million in the spring of 2007 -- well below the seven million viewers the show was drawing before Ms. Couric's arrival.

Since then, the network has scaled back its ambitions drastically, returning to a traditional format. Ratings have ticked up modestly, but Ms. Couric's show is still placing a distant third. For the week of March 31, the "CBS Evening News" drew an average of 5.9 million viewers. By contrast, NBC's "Nightly News With Brian Williams" drew 8.3 million viewers and ABC's "World News With Charles Gibson" drew eight million.

All three broadcast-network evening newscasts have been losing viewers for years. In 2007, the total audience for NBC's "Nightly News," ABC's "World News" and CBS's "Evening News" was 23 million, a 5% drop from 2006, according to Nielsen Media Research.

CBS is in a particularly difficult situation because its affiliate TV station group is weaker than those of other broadcast networks, a result of the loss of some of its strongest affiliates to News Corp.'s Fox network in 1993 after Fox outbid CBS for the right to air National Football League's NFC games. (Last year, News Corp. bought Dow Jones & Co., publisher of The Wall Street Journal.)

With its profitability declining sharply, hurt by lower local-TV ad revenue, CBS's affiliate group has been cutting costs. It laid off 160 employees at sites scattered around the country several weeks ago.

As part of companywide cost-cutting efforts, CBS earlier this year discussed whether it could reduce the cost of Iraq war coverage by using CNN feeds out of Iraq, according to two people at CBS. CBS News spends about $7 million a year operating its Baghdad bureau, mostly to cover security costs. The discussions fell apart in March over what the people at CBS describe as a "rights issue." Both CNN and CBS sell news feeds to international broadcasters, and an overlap would complicate those arrangements.

Aligning Ms. Couric's exit with the end of the campaign cycle would make sense. CBS had hoped to recast Ms. Couric this year as a populist political anchor, but it has suffered a series of setbacks, including mixed reviews of her exclusive interview with former Democratic candidate John Edwards and his wife, Elizabeth, and the cancellation of a Democratic debate Ms. Couric was to host at the start of the primary season.

Write to Rebecca Dana at rebecca.dana@wsj.com

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