Company Town: Ovitz Joins Disney : THE NETWORK : Ovitz Expected to Exert Broad Influence at ABC : Television: Many are speculating about what will happen to top executives.

The news that super-agent Michael Ovitz will become president of Walt Disney Co. sent shock waves through the ranks at Capital Cities/ABC Inc. and is seen as a possible blow to the top-management ambitions of Cap Cities/ABC President Robert A. Iger.

Ovitz is expected to exert his broad influence on Cap Cities/ABC, which earlier this month agreed to be acquired by Disney in a $19-billion deal. Some speculated he might cut loose some executives, consolidate some operations and alter ABC’s relationships with program suppliers and others.

“Anybody who has been aligned with ABC will be feeling a little heat,” said the president of one production company.

“Michael will have a definitive impact at ABC,” said a source close to Ovitz, who has been in contact with him about his new post. “He will access his relationships to help forward that network. I’m not able to tell you specifically how, but I can tell you that it will be different.”

Most of the speculation in the TV industry centers on what will happen to ABC’s top executives. Ovitz’s assignment comes as an apparent blow to Iger. He was in line for Thomas S. Murphy’s chief executive job at the broadcasting company, before the Disney merger derailed that plan.

Now, instead of reporting directly to Disney Chairman Michael Eisner, he must report to Eisner’s top man, Ovitz.

One entertainment executive said: “Iger appears to be the big loser in this. It’s amazing, considering how close he was to the finish line.”

Iger offered a more upbeat appraisal.

“Michael [Ovitz] is a person of enormous talent and experience who will be a great addition to the company,” he said in a statement released by ABC. “I’m thrilled about the appointment.”

Iger was signed to a five-year deal with Cap Cities/ABC before the Disney deal was announced, as a symbol of confidence in him.

“Ovitz was in the movie business, really,” observed former Walt Disney Studios President Rich Frank, who would have been a likely candidate for the Disney presidency before he left the company earlier this year. “So I think he has a learning curve to leap on at Cap Cities/ABC. It will be Iger calling the shots on an everyday basis.”

There has been speculation that Ovitz may consolidate or phase out positions at ABC.

“I think Mike Ovitz will put his stamp on ABC, or Cap Cities, and part of that stamp might involve stamping out executives,” said the head of one TV production company.

As possible casualties, some point to Stuart Bloomberg, the network’s executive vice president of prime time who recently confused many entertainment executives by moving to New York from where, many say, his job will be more difficult to conduct. Others point to Brian McAndrews, executive vice president of production for ABC, which is expected to be overshadowed by Disney’s TV division.

But Disney has maintained all along that ABC’s management team will remain intact. Iger, along with network group president David Westin and network entertainment president Ted Harbert, turned ABC into the highest-rated network last season.

“I don’t see Michael Ovitz coming in and dismantling what is a successful division,” said one studio executive. “That’s the day’s craziness speaking.”

Those expected to be hardest hit by Ovitz’s entrance into the Disney equation are the entities that have producing deals with ABC, including DreamWorks SKG and Brillstein-Grey Communications. Ovitz brings his own set of industry relationships and contacts with him. Add to that the fact that Disney expects to produce a large amount of ABC programming, and there’s not much room left for other cooks in the kitchen.

In fact, there are reports that Brad Grey is being wooed by MCA/Universal Chairman Edgar Bronfman Jr. to join Universal’s TV division, and by Ovitz to join Disney.