”The advertising agencies are quite aware of the network slowdown in advertising spending over the last couple of years,” he says. ”The business investment community is very much aware of that, as are shareholders and Wall Street analysts who make recommendations on investment decisions. There has been a gradual slide in constant dollar income of the three network companies, and the view has been that they`re losing audience share and they`re losing income and that the margins of profitability are narrowing. Now how do you turn that around?”
Wright answers his own question: with caution.
”The easiest thing for us to do is cut ourselves down to a very tiny shell of ourselves,” he says. ”We`ve got to be careful that before we take our structure apart prematurely, we understand where we`re going. There`s a temptation in downsizing that has got to be tempered by the fact that we might end up with a smaller-cost show, but a smaller-viewed show. That will lead to an even smaller-cost show and a smaller-viewed show, and before you know it, you`ll be out of business.”
Wright says he never has insisted that his news division produce a profit but that all television news divisions are overdue for a bit of slimming.
”It has to be rational and it has to operate under some kind of budget constraints,” he says. ”The cost of news gets a lot of attention. The contrast is, the affiliates are making lots of money on news, and we`re losing lots of money on news. It`s a strange dichotomy that the rest of the world seems to make money from news, and here we lose money. You sort of ask yourself, `Did God predestine that we should lose money and everybody else should make money from news?` Maybe you don`t have to be a profit center, but do you have to lose 100 million dollars a year? What does our audience want us to do? What is our service? What is the right use of our resources? There are no clean, obvious answers.”
Wright makes light of published views that a businessman with minimal broadcasting experience is in no position to run a network.
”Many of the elements are precisely the same,” he says. ”Anybody who`s had experience in dealing with people and with expenses and budgeting and financing can do it anywhere. The implication is we`re getting into programming, which would be a rather absurd thing to do. The question for someone like myself is knowing what to stay out of. This is a 3-billion-dollar-a-year business, and programming is the crux of it. We have some very, very good people doing that, so I tend to gravitate toward areas where my skills and background make me comfortable and rely on other people`s strengths in other areas.”
Wright admits, however, that the transition from the relative obscurity of General Electric to the goldfish bowl of television was accompanied by a bit of culture shock, particularly when two of his internal memos found prompt headlines in the print press.
”I don`t think coverage (of television) is unfair in the sense that it`s untrue,” he says. ”I think it`s just more heavily focused. My argument would be that the media don`t cover steel as much as (they cover) the media, but the fact is that we`re more visible, and the visibility and the coverage are pretty well matched. Those memos were tough to take. When you write a letter to seven people and it ends up in a magazine article a short time later, well, you get so you just don`t write memos.”
The aspect of a business executive with minimal broadcast experience running a network is nothing new. CBS founder William S. Paley consistently brought his presidents into the boardroom from outside firms–Wyman came from Green Giant Corp., which later was swallowed by Pillsbury–but in those days Paley exercised imperial control, leaving doubt in nobody`s mind as to who really was in charge. Today`s network chieftains suffer no such restrictions, and views of how well they will do in the long term vary widely.
Burton ”Bud” Benjamin, former vice president of CBS News and, with NBC`s Reuven Frank, one of the most respected documentary makers in the business, says the taking of journalism away from journalists and broadcasting away from broadcasters was inevitable, and he offers an automotive analogy to support it.
”In the old days at General Motors, if they had a brake problem and they started getting recalls, they`d bring up four guys in their greasy overalls from the floor and say, `Hey, guys, something`s wrong with this brake,`
” Benjamin says. ”In about a day they`d figure it out. Now they bring in four MBAs and a task force, and it takes them three months. Corporate types control not only broadcasting, but everything. That`s why kids are getting MBAs. They`re not getting that journalism degree any more.”
rank, twice president of NBC News, was dropped from the network`s payroll when his contract came up for renewal early this year, but he stayed on as a part- time consultant and documentarian. He sees nothing alarming in having a bit of financial acumen in the front office.
”So far, they haven`t done anything about the editorial content,” he says. ”They`ve made life a little more difficult, but journalistic purity has nothing to do with living frugally. `Poor, but honest` is a phrase in our society. Journalism is not a closed order. I don`t think any honest person, protected by not being quoted by name, would say to you that there is no overstaffing at any of the network news operations. It happens over the years. The barnacles gather on the hull, and these people come by and say, `Why?` You either justify it or say, `Yeah, maybe you`re right.` ”
Wall Street, which has seen network stocks ride a roller coaster in the last year, counted pluses and minuses in the new management.
”The pluses are short-term, the minuses are long-term,” says Shearson Lehman`s Good. ”The short-term plus is that they probably can look at the income statement and take a lot out of the cost structure, thereby making it more efficient. If there are long-term negatives that show up, it will be because they haven`t made the kinds of investments they should have made in news programming and other programming activities that don`t necessarily affect revenue immediately. They`re building long-term reputation and long-term following, and when advertisers come back (from the depressed market), they`re going to go to the quality programming source.”
Quality, or rather the loss of it, is what worries Rosenfield.
”I happen to believe that it is infinitely better to have strong management with experience in the industry being managed than it is to have strong management with experience in other industries,” he says. ”I lived through five presidents of CBS who brought great management skills that were missing from the home-grown management environment.
”It was a necessary change in CBS`s culture, but that missing factor of only transferring management skills and not truly understanding the nature of the business it was managing has caused CBS to lose its very heart. It has lost its leadership position, it has lost its will to be a leader. It has lost its vision completely as it copes with the short-term problems of downsizing and getting a handle on a fast-changing economic environment. I`m sick at heart as I look at the lack of farsightedness that is evident.”
Even with that bleak prognosis, few would predict the ultimate demise of network television, though all agree that its audience will continue to erode under the abrasion of increasing competition and technology. Rosenfield sees the increasingly affordable back-yard dish antenna, down sharply from its original $10,000 cost, as the next major entertainment wave of the future.
”Direct television, pay-per-view, not via cable, but one stop–satellite to home dish,” he says. ”It will hit about 1990. We`re talking about two-foot dishes as easily installed as a television antenna on the roof, and we`re talking about $300 to $500 a dish. It`s going to offer more competition to the networks, but it will have a far more profound effect on the other media.
”Networks are going to remain the avenue of distribution for mass product, whereas the other services–cable, VCRs and other two-step distribution media–are going to have to compete with each other. They`ll all find niches, but the market is going to be further fractionalized. The audience pie isn`t infinite, but the opportunity to reach it is infinite.”
Benjamin predicts a change for the better in network news, even as local stations` coverage expands and deteriorates on the wings of a technology permitting them to send camera crews anywhere in the world.
”I think you`re going to see longer stories, in more depth, more serious stories, less fire- and ambulance-chasing on the networks,” he says. ”The economics may drive them to that. Right now you`ve got the idiocy of local stations sending correspondents to cover the arms talks in Geneva just so they can advertise at 11 that `Action News` was there, yet in their own communities they don`t cover city hall because that`s dull.
”In the next presidential election, every local station in the country will be sending their own people to New Orleans. They`ll have their own satellite dishes. I see an increasing specialization where the networks will be doing longer, more significant stories, abandoning the kinds of stories that make good pictures but don`t mean anything because they`ll no longer have exclusivity on pictures, nationally or internationally.”
With heavy cutbacks in network news staffs and the growing predilection of local news divisions to expand coverage, however, ABC, CBS and NBC soon may find themselves increasingly dependent upon affiliates for pictures and stories. In his speech, INN`s Corporon even suggested that they subscribe to a ”nonexclusive, nonprofit electronic wire service” similar to the one set up by Conus, thereby affecting ”cost savings in the tens of millions of dollars.”
Such a move, however, might make network evening newscasts little more than clearinghouses for news gathered by affiliates and independent stations that would be supplementing their coverage much as AP and UPI supplement daily newspapers.
MacNeil, whose ”MacNeil/Lehrer NewsHour” always has concentrated on the longer, more analytical approach foreseen for network news by Benjamin, says it could happen sooner than most network executives believe.
”Marty Rubenstein (former president of the Corporation for Public Broadcasting) made a speech last summer in Washington in which he said he could see the day in the not-too-distant future when the `MacNeil/Lehrer NewsHour` would be the only national television news show because the other shows would have declined into syndication services for the local stations,” he says. ”He said, more graphically, that they would become dinosaurs devoured by their own offspring–the affiliates.”
Things may not be all that feral. It took nearly 100 million years for the dinosaurs to march into oblivion. The networks are not likely to follow them in the near future, but like any other hard-pressed species, they surely will evolve under the spur of a mutating technology that already has produced instant news transmission, wall-sized screens and interactive programming that involves the viewer. New wonders are on the horizon, and network competitors are not the only ones capable of using them to woo and win viewers, both for news and entertainment.
As Yogi Berra once observed about a baseball game, ”It ain`t over till it`s over.” Stay tuned. It ain`t over yet.
