CNN’S SUCCESS: ‘YOU DON’T DRIVE A CADILLAC TO THE STORY’

Last week, on the sixth anniversary of his ascension to the anchorship of the “CBS Evening News,” Dan Rather was approached by a Cable News Network reporter while Rather briefly joined a picket line of striking CBS news writers here.

“Are you with a union crew?” Rather asked. “Yes, I am,” said the reporter, Charles Feldman. He gave the same reply when Rather asked if he were a union member.

“But that’s not the issue,” Feldman continued. “The issue is CBS, what’s happening. . . .”

Replied the anchorman: “No, I think that is the issue. . . . Part of the problem here (at CBS) is that CNN by and large works non-union people. . . .”

It was a brief but telling encounter.

CNN was founded in 1980 as a 24-hour news service--a pesky, low-budget newcomer. And now here was Dan Rather accusing it and its largely non-union crews of being part of the woes at CBS News, which this month laid off more than 200 staffers as part of a $30-million budget cut.

In addition to making the troubled news division the butt of editorial cartoons again, the cuts touched off cries of anger and bitterness within the division, much of it directed at CBS chief executive Laurence A. Tisch.

Why would a Goliath of TV news take a swat at this David?

Because CNN airs news 24 hours a day on one-third the budget that CBS News enjoyed until a few days ago. Reaching 38.5 million homes via cable TV, it has a comparable number of foreign and domestic bureaus and nearly twice the number of employees, 2,250, as each of the news divisions at ABC, CBS and NBC.

CNN’s operating philosophy is simple, says Ed Turner, its executive vice president and a former CBS News producer:

“You don’t have to drive a Cadillac to the story. You can get there other ways and still have a decent story without compromise.”

That CNN apparently operates so much more efficiently than the networks may seem impressive. Indeed, it has been said that th% cost-conscious Tisch, who took over at CBS Inc. last September, is among the most impressed.

While news executives at the three major networks say there are extenuating circumstances that make their operations different from CNN’s, the cable upstart is increasingly being cited as a factor in the networks’ efforts to pare back costs in their news divisions.

There are others. ABC, NBC and CBS are trying to cope with flat advertising revenues, reduced viewership and competition from local TV stations and cable TV. CBS has an extra burden: the $1-billion debt it incurred when it successfully resisted a much-publicized takeover attempt in 1985 by CNN’s flamboyant founder, Ted Turner.

This month’s cutbacks at CBS News brought to more than 400 the number of jobs eliminated since 1985. Prior to the most recent trims, its budget this year was to have been $300 million, highest among the three networks. It had 100 correspondents and 22 foreign and domestic bureaus.

Now CBS lists 86 correspondents and 19 bureaus worldwide--and insiders say the latter figure is actually 17, because the bureaus in Boston and Bonn, Germany, are now reportedly manned only by someone to answer the phones and pick up the mail. CBS News’ current worldwide staff: 1,020.

NBC News and ABC News--whose parent companies, like CBS’, have been taken over in the last year by new managements that are said to be bottom-line oriented--underwent staff cuts last year, with ABC News losing 140 jobs and NBC News, 45.

With current staffs of just under 1,200 at ABC News and 1,250 at NBC News, and with respective annual budgets of $275 million and $273 million, those news divisions also face more cutbacks, although officials there say the cuts won’t be anywhere as large or sudden as at CBS.

“It’s not going to be any kind of big blood bath here, as opposed to our sister network,” one ABC executive says.

Meanwhile, Atlanta-based Cable News Network, which says it faces no cuts, marches on with a budget this year of $100 million for itself and its sister service, CNN Headline News. The latter was begun in 1981 and now serves 68 U.S. television stations 24 hours a day with a succession of half-hour, constantly updated newscasts.

Whether CNN represents the low-budget wave of the future for the Big Three networks is now being debated.

“The (low) Turner costs are not so much the result of astute management as they are of some very unique circumstances that the networks don’t enjoy,” says one former senior network news executive, who asked not to be identified.

“Turner would be out of business, I suspect, if he were unionized

to the extent that the networks are unionized, and if he had to pay network-competitive salaries, or even salaries that are competitive in major markets.”

George Watson, ABC News bureau chief in Washington, worked as a CNN executive in 1980 when it was just starting up. From his vantage point, he thinks a major difference between CNN and the networks--at least ABC News--lies in the quality of reporting.

CNN is fine as a headline service, he says, and “does a first-rate job covering business and economics.” But the networks tend to have more specialists covering given areas of news, whereas CNN has more generalists, and “I think there is a breadth and depth of reporting that we have and they lack.”

Watson also thinks that CNN’s lack of unionization, particularly with camera crews, is a “significant factor” in the company’s ability to run a 24-hour news operation at a comparatively low cost.

“That probably is the key to how they do it,” he says.

CNN’s Ed Turner, no relation to his boss, acknowledges that the company does not have a contract with the American Federation of Television and Radio Artists, the union that represents on-air correspondents and anchors at the networks. But it is not true that CNN has no union crews at all, he insists.

Unlike the networks, whose crews are staff members, CNN has contracts with subcontractors, who provide the company with union camera crews in Washington and New York, he says.

CNN’s seven other domestic bureaus also get camera crews from subcontractors, some of whom have union agreements while others don’t, he adds. It is a system that worked well when CNN was beginning, he says, “and that’s why we’ve stuck with it.”

However, says Turner, the union issue raised by Rather and others is “irrelevant, and it goes to show you the old way of thinking that the planners at the other places have. I’m not criticizing them, but they are straddled with yesteryear.”

He likens the networks to Victorian mansions built 50 years ago, to which “rooms and wings”--including news divisions--were gradually added. In contrast, he says, when CNN was begun seven years ago, it was built for news only and with specified limitations on budget.

“We had certain advantages of knowing what we wanted and what it would take,” Turner says.

A CNN spokeswoman said the company began with 600 staffers and a $23.2-million annual budget.

That the networks must pay as much as two-thirds more than CNN for news camera crews and other broadcast technicians is their own fault, he contends:

“That’s because they got themselves these (union) contracts when times were fat, and they bought labor peace. But that doesn’t mean we have to do what they did. There are a hell of a lot of good (news) people out there carrying cameras--more than ever before because there’s more television news.

“So you don’t have to strike that kind of (unionized) bargain and live with that kind of arrangement.”

Another factor, he says, is that when CNN was in the start-up stages, “we knew there were a lot of extremely talented journalists from print, the wire services and radio and television who wanted to come here . . . and we reached our own agreements with them.”

And, he adds, in a pointed reference to Rather’s reported salary, “you do not have to pay $2 million-plus a year to have a very good anchorman. You don’t have to spend that kind of money and you can still have a fine person on the air.”

Annual Budget Total Staff On-Air Personnel Domestic Bureaus CNN $100 million 2,250 165 9 ABC $275 million *1,200 80 11 CBS $270 million 1,020 86 8 NBC $273 million 1,250 89 9

Foreign Bureaus CNN 9 ABC 16 CBS 11 NBC 20

*Approximate number