Tightening the Belts at ABC

By Richard Zoglin

Stopping at the employee cafeteria for a morning cup of coffee, staffers at ABC's midtown Manhattan headquarters are apt to find an unlikely table mate these days: the big boss. Unlike his predecessors, new ABC President John Sias often mingles with the troops at breakfast rather than repairing to the 40th-floor executive dining room. "It's not good to use all the executive perks and ask others to cut back," says Sias, 59, a former paratrooper known for his practical jokes and the Captain Marvel T shirts he sometimes wears under his suit and tie. "It's important for executives to set an example."

There can be no one left at the network who has failed to get the message. Since Capital Cities Communications assumed control of ABC in January, the newly merged company has embarked on a stringent cost-cutting campaign, an alien notion in the high-living world of network television. Layoffs have hit nearly every part of ABC's TV operation. More than 70 people were let go in the news division; some 300 positions were cut at ABC-owned stations in New York, Los Angeles, Chicago and San Francisco. Such familiar trappings of the executive life-style as limousines and liberal expense accounts are now frowned on. Programming, too, may soon feel the knife. The network known for such blockbuster mini-series as Roots and The Winds of War is now shying away from these extravagant ventures. Cheap game shows are not about to invade prime time, and Joan Collins' Dynasty finery appears safe, at least for the time being; but it is clear that more frugal times are ahead for ABC, and perhaps for the other two networks as well.

ABC's belt tightening has come as no surprise to industry watchers. Capital Cities, a successful owner of magazines, newspapers and broadcasting stations, is known for running lean, and extremely profitable, operations. ABC, meanwhile, has been floundering financially. As NBC last week celebrated its first victory ever in Nielsen's cumulative annual prime-time ratings, ABC chalked up a last-place place finish for the second year in a row. Capital Cities/ABC executives told stockholders three weeks ago that the network may post a net loss this year for the first time since 1971. Nor is the situation likely to improve quickly, as all three networks face growing competition from cable, videocassettes and independent stations. "The landscape is changing," says Sias, the former head of Capital Cities' publishing division. "We want to shape a company that survives and prospers. ABC is going to be a new entity; I don't know yet what it will be like."

Signs are starting to appear. In sports ABC has long been the most aggressive and free-spending of the three networks. But the company's new managers declined to match CBS's bid of $173 million for rights to the next four seasons of N.B.A. games, and they are balking at the hefty fees being demanded for major league baseball and N.F.L. games. "We aren't conceding anything to the competition, but we are getting out of the red ink," says Dennis Swanson, the new president of ABC Sports. One casualty could be Monday Night Football, a once lucrative ABC mainstay, which lost $25 million this past season. (Two of the show's high-priced analysts, Joe Namath and O.J. Simpson, have already been dropped from the broadcast, though Simpson may remain with ABC as a commentator on college games.)

The bottom line is also coming under closer scrutiny at ABC's news division. Most of the layoffs so far have been in lower-echelon production jobs. Says Washington Bureau Chief George Watson: "We have not cut into the teeth of the news-gathering and producing-operation." Yet staff morale has plummeted, and some insiders claim that personnel are being spread too thin. "It will reflect in the quality of the show," predicts a staffer at ABC's newsmagazine 20/20, which lost four positions in the cutbacks. "We are already burnt out." Says a New York City-based producer: "I don't know if the new management understands the need for bench strength."

ABC News President Roone Arledge, 54, who gave up his second hat as president of ABC Sports when Capital Cities took over, argues that the cutbacks are simply an effort to streamline operations, and were initiated by the news division itself as the result of a study begun in late 1984. "When I first came to ABC News," says Arledge, "by and large it was not a competitive force in network journalism. We had to get people's attention. Our needs are different now. We have more depth than the other two networks."

The new regime may actually bring fresh projects to the news division. Arledge's group is developing ideas for a new hour-long prime-time show, possibly to air in the Thursday time period opposite NBC's top-rated The Cosby Show; several soft news/entertainment shows are also being considered for that slot. Other news programs in development include a weekly half-hour business show for Sunday afternoons and a health series for Saturdays.

On the entertainment side, the new economy kick is taking many forms. Actors and other on-air talent for such ABC-produced daytime shows as Good Morning America and the afternoon soaps will, according to a recent company edict, be limited to 5% salary increases, except in special cases. Producers are also feeling the pressure. Esther Shapiro, executive producer of Dynasty, decided against Arledge hiring a high-priced actor for her show this season when the task of get ting company approval proved too onerous. Before the takeover, ABC gave its top-rated sitcom Who's the Boss? $50,000 to shoot part of one episode at a softball field. "I don't think we could do that now," says Producer Robert Sternin. "I really think the money has dried up."

Still, new ABC Entertainment President Brandon Stoddard insists that the network will not cut corners in trying to reconstruct a winning prime-time schedule. "We've got to protect what goes on screen," says Stoddard, 49, who was named programming chief last November after running ABC's mini-series and theatrical-films operations, "because what goes on the screen will make us succeed or fail." The network has ordered 27 pilots for potential fall series, more than either of its two rivals. Lucille Ball will star in a new sitcom, and other prospective series include a sci-fi drama based on the 1976 film The Man Who Fell to Earth. "Some of the shows may be expensive, some of them may be less expensive; that's a secondary consideration," says Stoddard. "The cheapest program is the program that works."

At least one kind of expensive program, however, is on the endangered list: the mini-series. Though ABC is going ahead with production of War and Remembrance, a 30-hour sequel to The Winds of War, such lavish projects will become rarer, Stoddard says. The network is also looking to save money by producing more shows in-house, as it does with Moonlighting, the successful romantic comedy starring Cybill Shepherd and Bruce Willis. Though the series is one of the most expensive on TV, ABC, as the show's owner, will be able to recoup much of the cost through sales of reruns in syndication.

ABC's new frugality could have other consequences for programming, not all of them bad. ABC programmers may be less apt to cancel a series that is struggling in the ratings, figuring that it is cheaper to stick with a show already paid for than to scrap it and start over. In the past such tenacity has yielded late-blooming hits like NBC's Hill Street Blues and Cheers. The cost-cutting mentality also may boost the amount of news and information programming, which is usually less expensive than entertainment shows.

Even disgruntled ABC staffers admit that many of the recent cutbacks have been justified. ABC-owned and-operated stations, for instance, were regarded by many as oversize and appropriate targets for trimming. As the TV environment grows more competitive, ABC's moves may begin to look prescient. "All the networks are going to have the same problems," says Richard MacDonald, a media analyst for First Boston. "It's just that ABC is taking the lead." Cafeteria dining, it seems, may soon be the rage all along Broadcast Row. --By Richard Zoglin. Reported by Kathleen Brady/New York and Michael Riley/Los Angeles

With reporting by Kathleen Brady/New York, Michael Riley/Los Angeles