MORE NETWORK CUTS TO COME, SAUTER PREDICTS

CBS News may be getting its hackles whacked to the tune of $30 million this week, but it’ll be CBS Entertainment next.

After that, the entertainment divisions at ABC and NBC will be made to suffer painful cuts in their operating budgets.

And, ultimately, the accountant’s ax is going to fall on the Hollywood studio system too.

So says Van Gordon Sauter, the former CBS News president who was forced out last September after he himself had earlier had a hand in eliminating 214 jobs.

On Friday, more than 200 additional layoffs at CBS News that were announced a week ago became effective. On the eve of the layoffs, the gruffly eloquent 50-year-old Sauter predicted that the CBS Inc. cutbacks aren’t over yet.

Appearing as guest speaker at Cal State Northridge, Sauter predicted a sobering future for young, would-be broadcast journalists. Currently, he said, about 10% of the remaining 1,000-or-so employees of CBS News earn more than $100,000 a year.

Such salaries will soon be a thing of the past, according to Sauter.

He said that those who are contemplating a glamorous, high-salaried career as a TV network correspondent need to understand that the gravy days, when networks could command 10% to 15% commercial rate increases every year, are over and, as a partial result, so are the fat paychecks.

“The urgency of all this is underscored by the fact that two of the broadcast companies may lose money this year on their network operations,” Sauter told an audience of about 200. “Only NBC, with its secure prime-time ratings, is guaranteed black ink.”

The bloodletting will not stop at the networks’ New York headquarters, he said.

“At some point, the networks will also be obligated to impose equally astringent cuts to the entertainment programs they commission from the Hollywood studios,” he said. “That will be even more difficult, though ultimately more profitable, than muscling the news media.”

The well-publicized decline of the networks’ stranglehold on television is part of the reason for lagging revenues. Sauter cited the growing popularity of Cable News Network and the increasing sophistication of local TV news operations as examples of programming that has eroded audiences for CBS, ABC and NBC.

But equally important to the reductions that have taken place at all three networks over the past 18 months are the profit-motivated businessmen who have taken over the reins, he said.

“They are worldly men,” Sauter said. “They perceive news as an important, sensitive business of significance to society. But they really see it as a business. And for years, television news has been a perfectly wretched business at the network level.”

Like new CBS Inc. President Laurence A. Tisch, the hard-nosed executives from Capital Cities Communications Inc. (ABC) and General Electric (NBC) won’t tolerate money-losing divisions at any level of their newly acquired broadcast empires, he said.

“The hard-news broadcasts and documentaries at CBS, for instance, lose tens of millions of dollars a year--a loss barely offset by the staggering profits of ’60 Minutes,’ ” Sauter said. “There is little in Tisch--or for that matter his counterparts--to suggest that he is inclined to spend nearly $300 million a year on any kind of business that (only) breaks even, particularly when that break-even point is dependent upon a single prime-time broadcast that may someday run out of steam.”

A former newspaper reporter and Paris bureau chief for CBS News, Sauter was president of CBS News from March, 1982 to September, 1983, when he was named executive vice president of the CBS Broadcast Group. He took the helm of the news division again in December, 1985.

Sauter would not comment specifically on the propriety of the recent cutbacks, contending that he remains in a peculiar position because, despite his abrupt departure, he is still under contract to CBS Inc. Shortly before he and former CBS Inc. President Thomas Wyman were forced to resign last fall in the shake-up that brought Tisch to power, Sauter said, he negotiated a five-year, no-cut contract with the network that obligates CBS to continue paying him into the 1990s, whether he works for it or not.

He did quote some positive advice for young journalists from the likes of Cicero, James Agee and F. Scott Fitzgerald in an attempt to bolster their hopes, but not before he had painted a “worst case” scenario of post-cutback life at CBS Inc.

“The real impact of cost reductions at the networks is on the pride and self-esteem of the news people themselves,” he said. “It is compounded at CBS News because the people there played a key role in supporting Mr. Tisch’s efforts to oust the prior management.

“Many of the news division were convinced, and Tisch did nothing to dissuade them, that his arrival would mark the end of financial cutbacks in the news bureaus. And after he took over, the news people in effect danced to the Place de la Concorde to watch him dismantle the guillotine.

“To their horror, they discovered that he had really ordered more blades. . . .”

Now, said Sauter, their complaints fall on deaf ears.

“Owning 25% of CBS, Mr. Tisch says he can take the heat, and he has,” he said. “While journalists lament their fate and his perfidy, CBS stock prices soar to more than $160 (a share).

“At one time, the journalists who went out to cover the layoffs at steel mills and oil fields and auto plants returned to their offices with a rich, reassuring sense of ‘it will never happen here.’ But it has happened at the network, and many of those people are faced with the reality that they are dispensable employees just like those featured in the stories with datelines such as Lackawanna or Midland or Dearborn.”

The glee with which many people greeted reports that well-paid TV journalists were getting fired is misplaced, he said.

“These people are ultimately driven by a conviction that their work is of importance to the society and that they are members of a unique fraternity,” he said. “The new owners will share that sentiment at industry dinners and when they bask in the glow of those who perform distinguished journalism.

“But under their green eyeshades, the tube to them--be it news or soap operas or the NFL--is a business. And in their opinion, you can’t be a business still within reason and meet what they consider to be the general expectations of a news employee. The tube, as Howard Beale (the fictional newsman in ‘Network’) said, may be an awesome force, but for the news people who service it, the tube has lost some of its focus.

“The owners don’t think that (is) adverse and the viewers don’t care.”