ELTON RULE’S TAKEOVER RULES

Elton Rule agrees with Irving Berlin’s musical dictum “There’s no business like show business.”

The problem is, as takeover fever hits the television industry, not to throw out the show when acquiring the business.

Rule, former president of ABC Inc.--soon to be Capital Cities/ABC Inc. providing the merger wins federal approval--had the attention of a couple dozen Hollywood executives and a roomful of Academy of Television Arts & Sciences members and guests Tuesday as he spoke about the pluses and minuses of Hollywood’s new corporate ownership.

“The corporations that are now being attracted to TV and motion pictures as investments should recognize that if this is one of 50 businesses they run, it is altogether different from the other 49,” Rule, now an independent producer, said during his keynote speech before the TV academy’s Forum lunch at the Century Plaza hotel.

The infusion of new money into the industry is a definite plus, Rule said, as are such “corporate disciplines” as long-range planning and market research. “We need to have people in our program departments whose only concern is the 1987-88 season and beyond,” he said.

But he also warned against “people coming into our industry just to make a fast buck” and the threat that poses to creative thinking. Strict bottom-line planning, Rule noted, would never have gone along with something like “Roots.” “All the research in the world told us why you couldn’t do a show about blacks and get a rating. What happened, of course, made history.”

Rule, 67, who left ABC last year after three decades with the company, spoke favorably of the pending merger with Capital Cities Communications. “It is one of the best examples of a concerned broadcaster,” he said of Capital Cities.

Queried following his speech, Rule said that he did not expect Capital Cities’ management to meddle in third-place ABC Entertainment’s programming woes. “They are very practical people,” he said of Thomas S. Murphy and Daniel B. Burke, Capital Cities’ top executives. Rule said the ratings race was cyclical and that the best thing ABC can do is “continue to experiment to find the right programming.”

Rule’s keynote remarks seemed particularly significant in light of broadcast entrepreneur Ted Turner’s continuing interest in acquiring CBS Inc. Rule said that CBS is “lining up a team of investment bankers, lawyers and PR men to stave off what looks like serious takeover threats.”

During the speech, many of Rule’s listeners nodded knowingly as he contrasted today’s corporate-run entertainment companies with the regimes of such visionary entrepreneurs as Walt Disney and Louis B. Mayer and television pioneers William Paley, David Sarnoff and Leonard Goldenson.

On the two-tiered dais were a number of executives who have personally felt the conflicting pressures of Hollywood’s creative and corporate sides. Among them:

Frank Rothman, chairman of MGM/UA, whose stock is controlled by businessman Kirk Kerkorian; 20th Century Fox chief executive Barry Diller, who left the chairmanship of Paramount Pictures in part because of differences with corporate heads at owner Gulf & Western; MCA/Universal’s Lew Wasserman and Sidney Sheinberg, regarded as show business’s most stable and successful conglomerate executives; independent producers David Gerber and Leonard Goldberg, the latter of whom this week turned down a top-level ABC programming position; Jeff Sagansky, who left a programming slot at NBC to become production chief at Tri-Star Pictures, jointly owned by Time Inc., CBS and Columbia Pictures Industries Inc., a unit of Coca-Cola, and ABC Inc. top executives Leonard Goldenson and Frederick Pierce, who will receive new titles in the new company formed by the Capital Cities/ABC merger.

Also on the dais were former ABC executives Martin Starger and I. Martin Pompadur, partners with Rule in the Rule/Starger Co., whose activities include feature films, TV programs, stage presentations and broadcasting station ownership.

Starger, producer of “On Golden Pond” and “Mask,” exemplified Rule’s point about the uniqueness of decision-making in show business.

“If a corporate committee was asked to make a decision about producing a picture about an aging couple facing their mortality or about a young deformed boy who dies at the end of the movie--they wouldn’t,” Rule said.

“We certainly don’t object to these new forces reaping the rewards of being in broadcasting and entertainment--provided they sow the fields just as we have done these past three decades,” he concluded.

Rule himself took to ABC’s fields in 1953, when he became general sales manager of KABC-TV. Rising steadily through the ABC ranks, he became general manager of the network-owned local station, then president of ABC Television and, in 1972, president of ABC Inc. During his tenure, ABC went from being an unprofitable venture to a solid communications conglomerate that, until this year, surpassed NBC in viewer popularity.

Rule was vice chairman of ABC Inc. when he resigned in January, 1984.