JOHN YANG: Broadcast television's highest rated late-night talk show, "The Late Show With Stephen Colbert" is being canceled.

Last night, Colbert announced the change, which took him and many in the industry by surprise.

Paramount, CBS' parent company, called it purely a financial decision.

But, as our Stephanie Sy reports, the timing is raising questions.

STEPHANIE SY: If a bombshell can be casually dropped, he did it.

STEPHEN COLBERT, Host, "The Late Show With Stephen Colbert": Next year will be our last season.

The network will be ending "The Late Show" in may.

And... STEPHANIE SY: A chorus of boos when Stephen Colbert announced the cancellation of the long running "Late Show" at the taping for last night's program.

STEPHEN COLBERT: It's not just the end of our show, but it's the end of "The Late Show" on CBS.

I'm not being replaced.

This is all just going away.

STEPHANIE SY: Colbert, who took on politics and President Trump in sharp-tongued monologues, will end his 10-year run next may, this despite the show being nominated for its 33rd Emmy just this week.

In a statement, CBS and parent company Paramount called the change purely a financial decision, adding: "It is not related in any way to the show's performance, content or other matters happening at Paramount."

Despite being the highest-rated legacy late-night show, Colbert's program only averages 2.4 million viewers a night.

Declining ad revenue and a shift to streaming have upended broadcast network's traditional business model.

But, for many, the timing suggests there may be other reasons for "The Late Show"'s demise.

Paramount is in the midst of a multibillion-dollar merger with movie studio Skydance, a deal that will require the Trump administration's sign-off.

STEPHEN COLBERT: This settlement is for a nuisance lawsuit Trump filed.

STEPHANIE SY: And, on Monday, Colbert's monologue made no bones about his take on the company's $16 million settlement with the president over a "60 Minutes" interview.

STEPHEN COLBERT: Now I believe this kind of complicated financial settlement with a sitting government official has a technical name in legal circles.

It's big fat bribe.

STEPHANIE SY: Colbert took over "The Late Show" chair in 2015 after a 22-year run by the show's original host, David Letterman.

Last year, he told "News Hour" anchor Amna Nawaz he relished the work, even in trying times.

STEPHEN COLBERT: It's a gift to us that we get to go out there and do the jokes for the audience and we get to realize that we're not crazy and that these things that are driving us crazy or making us anxious are also resonating with the audience.

STEPHANIE SY: President Donald Trump today expressed his satisfaction with the cancellation, saying: "I absolutely love that Colbert got fired."

For more on all of this and the many questions being raised about this decision, I'm joined by NPR's television critic, Eric Deggans.

Eric, thanks so much for joining the "News Hour."

You just heard President Trump's gleeful reaction there.

How does that fit into the questions surrounding this move by CBS and whether it was truly just a financial decision or one, as critics say, to appease President Trump?

ERIC DEGGANS, National Public Radio: Well, CBS has insisted in statements that this was a financial decision.

And, of course, those of us who've been watching the late-night space for a while know that viewership has been dropping, ad revenue has been dropping.

And a lot of the shows have been trying to find ways to cut costs.

"Late Night With Seth Meyers," for example, let go of its in-house ban last year to try and save money.

And CBS wound up walking away from James Corden, and also the show "After Midnight," shows that aired after "Colbert," probably because they cost too much and they weren't making money So obviously there is some truth to this idea that there was a financial incentive here.

But the backdrop, of course, is that Paramount, the owner of CBS, is trying to complete a sale to Skydance Media.

They need federal approval for it to happen.

And, of course, everyone understands that the Trump administration can punish media outlets that abuse in opposition to their goals.

So there's always these questions about whether or not CBS and Paramount are taking action to appease Trump when they do things like this.

STEPHANIE SY: Eric, you have to wonder, if Stephen Colbert's late-night show can't survive, which ones can.

It's been the highest rated show, at least on the Big Three networks, for nine straight seasons.

Notably, FOX's 10:00 p.m. show, "Gutfeld," which Trump praised in his TRUTH Social post, has been beating all three of those programs.

But what does losing "The Late Show" portend for the other programs in this format?

ERIC DEGGANS: It'll be tough to prognosticate what might happen here, because it's entirely possible that some of Colbert's fans may wind up turning to some of these other shows in order to get their fix.

Also, when you're trying to figure out whether a show is profitable, you have to look at their expenses.

And Colbert -- there's some reporting that indicates that Colbert was earning at least $15 million a year as host of the show.

They had a wonderful, but also expansive in-house band on that show.

It's entirely possible that there might be a way for some of these other shows to streamline their costs so that they have a better chance of making money.

I think one of their big problems is that younger audiences, which used to be sort of the bedrock audiences for shows like "Late Night" back when Conan O'Brien was hosting it and when Jimmy Fallon was hosting it, they have shifted to streaming.

The question remains, can late-night TV shows reinvent themselves to the point where they might become profitable?

If you look at "The Daily Show," for example, Jon Stewart returned to hosting it once a week and its ratings have risen from the time that -- when they had guest hosts.

STEPHANIE SY: You know, I'm old enough to remember when David Letterman was hosting "The Late Show" and those were big shoes to fill for Stephen Colbert.

Speaking of "The Daily Show," can you see Colbert landing somewhere back once his stint at CBS is over next year?

ERIC DEGGANS: I think it's much more likely that Colbert may establish a separate media company, an independent media company, in the way that Conan O'Brien did once he left TBS.

Now Conan O'Brien has a company that does podcasts, does video podcasts, has a deal with SiriusXM, but he's in control of his own company and his own programs.

And I think that's something that you would expect from a talent like Colbert, creating a company where he has more control over what he's doing and the longevity of the programs that he's creating.

And I think this is something we might see other talents do as well.

If it gets to the point where NBC and ABC don't want to pay for these shows, I could easily see a Jimmy Kimmel or a Jimmy Fallon hanging out their own shingle, creating their own media company, putting their own programs on YouTube and on SiriusXM and on Instagram and on TikTok and creating their own little mini-media empires where their fans can more directly connect with what they're doing.

I think it's a shame that network TV and these big media companies have not found a way to make these shows more profitable and keep these talents on the major platforms that they have been on.

But I don't expect these people to go away.

Many of them are relatively young and they just may have to establish their own media companies, create their own media platforms and speak to their audiences that way.

STEPHANIE SY: Eric Deggans, TV critic for NPR, it's a pleasure having you on the program.

ERIC DEGGANS: Thank you for having me.