Over the last 18 months, ABC, NBC and, finally, CBS have undergone ownership changes or endured power struggles from within or without. Everyone in the broadcasting industry seems to agree that these are fundamental changes, ones that will alter the way television conducts business in the years to come.
What no one seems to understand is what these corporate maneuverings will mean to the viewer, to the millions of Americans who get most of their information and entertainment from the blue light in the living room.
Some recent vignettes from a wonderland in transition:
— During the week of July 4th and television`s Statue of Liberty extravaganza, the CBS Broadcast Group announced the elimination of nearly 700 jobs.
— Dennis Swanson, the new head of ABC Sports, said that his commitment to ”Monday Night Football,” a prime-time staple for almost two decades, is contingent on a better contractual deal for the network with the National Football League. ”I could turn more of a profit if I took the money across the street and put it in the bank,” Swanson said.
— The producers of NBC`s ”Miami Vice,” a ”hot show” in TV parlance, agreed to pare down the number of scenes shot on the water. The $1.4 million cost of each episode is the reason for the decision.
— A public-relations representative for cost-conscious ABC in New York was asked to ship a video cassette to Chicago by overnight service. ”Honey, it`s been a while since anybody used the words `Federal Express` around here,” she replied, laughing.
— At a recent convention of radio and TV news directors in Salt Lake City, the talk was of ”satellite news gathering” and the purchase of $400,000 vans equipped with truck-mounted satellite dishes. The vans give local network affiliate stations the capacity to cover breaking news stories in much the same way the networks do. At the networks, there is concern that local stations may set about doing just that. Meanwhile, the ABC owned-and-operated station in Chicago sends a reporter to southern Africa with Rev. Jesse Jackson and offers nightly reports on the trip.
— In 1985, the combined advertising revenues of the three commercial networks declined by 3 percent. It was the first time that had happened since 1971, when cigarette advertising was dropped.
These days, it seems everybody in television carries a tale of woe. Caution and talk of the ”new economic realities” have replaced the bluster and bravado that characterized the medium in the days when CBS`s William Paley and RCA`s David Sarnoff were defining it, and beyond.
Television is living in a self-proclaimed era of limits. The problem is no one knows what those limits will mean for the future of the medium.
In March, 1985, a merger of ABC, Inc., and Capital Cities Communications, Inc., was announced. The $3.5 billion maneuver, at the time the largest merger without an oil company involved, ushered in a bottom-line orientation, an era where the concerns of the stockholders and a laissez-faire approach by the government to the machinations of the broadcast industry were the dominant elements.
A headline in ”Channels,” a magazine devoted to the broadcasting industry, told the tale: ”Frugal Cap Cities Never Owned a Network. Free-Spending ABC Never Had a Budget.”
Later in the year, RCA, the parent company of NBC, announced a $6.5 billion merger with General Electric. The pacific state of the network–it dominated prime-time ratings for the first time in 30 years during the 1985-86 season–made this transition a relatively calm affair. But earlier this month, Robert Wright, a GE executive with no experience in network television, replaced Grant A. Tinker as NBC`s chief executive officer.
The decision to elevate Wright roiled the waters. Tinker and programming chief Brandon Tartikoff, who signed a new contract with NBC this summer, are given the lion`s share of the credit for NBC`s recent success.
And this week, the third corporate upheaval in network TV was played out. On Thursday, Paley, now 84, and Laurence A. Tisch, the largest stockholder in CBS, wrested control of the company from chairman Thomas H. Wyman. Wyman and Van Gordon Sauter, the president of CBS News, departed within hours of the announcement.
Tisch, who got into the game last October at Wyman`s behest, as a
”friend” of the company and an ally to keep Atlanta mogul Ted Turner and other raiders at bay, was named acting chief executive officer.
Again, these are interesting Wall Street sagas. Larry Tisch and Thomas Murphy, the chairman of Cap Cities/ABC, are legends in the financial community. What they intend to do with television, however, other than creep along the bottom line, remains a mystery.
American television is first and foremost a business. But the baronies of television are unlike other media, and other corporations with stockholders to worry about, in that they are licensed in the public interest. Those air waves you keep hearing about still belong, on the books and in the bureaucratic mind of the Federal Communications Commission, to the public.
Deregulation of the broadcast industry, the encroachment of cable television, the growth of viewing alternatives like Turner Broadcasting, Fox Television and myriad numbers of other ambitious players all have made an impact.
Economic reality, as defined by the new managers at Cap Cities in particular, meant television would have to be run like a business, like any business. But any casual observer of the staggering power of this privileged medium can see that the rhythm of the marketplace is hardly a sufficient check on television.
In terms of prime-time programming, Cap Cities has evinced an early philosophical interest in low-balling, in making money without spending money. And there is evidence that going on the cheap will work. Before it got into the network business, when it owned seven TV stations and five cable operations, Cap Cities was getting comfortable with outsized profit margins.
After all, in the words of former CBS News executive Fred Friendly,
”Television is a medium which makes so much money doing its worst, it cannot afford to do its best.”
Can television make money with quality prime-time programming?
The answer is as plain as the results Tinker and Tartikoff wrought in three years at NBC. In 1983, the prime-time lineup at NBC featured the utterly forgettable sitcom ”Gimme a Break” on Thursdays at 7 p.m. (Chicago time). In 1984, ”The Cosby Show” assumed that time slot, with ”Gimme a Break” moving elsewhere.
”Cosby” anchored a lineup of high-quality, highly-rated programs
(”Cheers,” ”Family Ties,” ”Night Court”) that allowed NBC to raise ad rates in an advertising recession. For $400,000 a minute, you could advertise your automobile or copying machine on a program that garnered ratings numbers generally associated with Super Bowls.
”If you`re getting two or three times the ad revenue out of a time slot than you were getting with a lesser program,” Tartikoff said, ”that seems like a positive and sensible way to do business.”
One of the first questions likely to be answered by the new high sheriffs in television is whether or not that point of view will prevail.
Cable and videocassette recorders and incipient ”fourth networks” like Fox Television have marginally, but significantly, reduced the share of the audience reached by the major networks. That reality is an element in the hard times in the broadcasting business. But, at the same time, it is a window of opportunity for viewers.
Viewing options are available in increasing numbers, and the networks will have to compete harder than ever for those viewers. Whether the networks can do more with less, and whether they choose to, is the million-dollar question in this new environment.
Television news is a dicier affair. The networks have been losing money with evening news shows for more than a decade, while local news operations have generated handsome returns.
The trend in TV news has been to follow the technology, to make profitable and attention-getting use of the revolution in video equipment. And nowhere is that tendency more in evidence than in local TV news.
Some voices in the news business contend that the prestigious network offerings of Dan Rather, Tom Brokaw and Peter Jennings are bound for the elephant graveyard. The 90 minutes or two hours of local news offered by affiliate stations may already be the linchpin of television`s news-gathering efforts.
For the moment, the questions are moot. The answers are the property of the new television barons, the Larry Tischs and Robert Wrights and Tom Murphys. In the free-wheeling marketplace that is network television these days, nothing is revealed.
