Company Town : NBC Grants McDermott Leave to Pursue ABC

Showing surprising magnanimity, NBC Entertainment has granted Jamie McDermott, one of its highest-ranking female executives, a four-month leave of absence, allowing her to pursue negotiations with rival Walt Disney Co., which sources say is considering her for the top programming job at its ABC network.

McDermott’s sudden departure and surrounding intrigue could reverberate beyond her career move. Sources say top executives at NBC are furious with Disney and its new president, Michael Ovitz, who they believe approached McDermott less than a year after she had signed a new employment contract.

“This is agent ethics come to business and it’s not cool,” said a source close to the situation, referring to Ovitz, the former head and founder of Creative Artists Agency.

Hollywood sources also said they were surprised by the handling of Ted Harbert, who would be replaced by McDermott as president of ABC Entertainment and moved to a new job. Sources say Harbert learned ABC was wooing McDermott when a high-level NBC executive called him Sunday night while he was preparing a speech for the ABC affiliates meeting in Dallas that ended Thursday.

Though ratings at the network have taken a bad turn this season, Harbert has worked at the network for 18 years and presided last year over its first No. 1 ranking in 17 seasons.

Some executives said Harbert’s treatment reflects the tough Disney corporate culture. “This is the Disney influence showing its face,” said one entertainment executive. “ABC would never have handled it this way.”

Hollywood was also puzzled by NBC’s acquiescence, as entertainment executives are rarely released from their contracts so early in their term. “The big question is why they would let her out,” one executive said. “NBC is not the kind of place that just lets people walk at will.”

Sources at NBC suggested that depriving McDermott of an opportunity for such a top-level job would inspire resentment. McDermott, 31, would be among the youngest executives and the only woman ever to be president of network entertainment.

She signed a two-year contract with NBC in May as senior vice president of prime-time programs. Although details of the separation agreement were not made public, sources said her leave would last until mid-June to prevent her from sharing information about the current development season with a competitor.

At the end of the leave, they say, she would formally resign from the network, where she has worked for nine years and helped develop such comedies as “Friends,” “Frasier” and “Mad About You” that have been instrumental in NBC’s rise to No. 1 in the ratings, surpassing ABC.

Many sources speculated on the behind-the-scenes role played by Ovitz. Sources say some NBC executives believe Ovitz and Capital Cities/ABC Inc. President Robert Iger approached McDermott about the ABC job about three weeks ago--just after Disney gained approval for the merger. Sources contend Ovitz suggested an approach to obtain McDermott’s release from her NBC contract.

Sources say approaching McDermott while her contract was in force could be regarded as an illegal interference in an employment contract, although an NBC source said a lawsuit is unlikely.

In the tightly knit Hollywood community, executives who would like to hire someone under contract from a rival company often place a call to negotiate the release. No such call was made in this case.

Ovitz could not be reached for comment Thursday and Disney declined comment. McDermott also would not comment.

Some NBC sources suggested the move was timed--though without success--for the Dallas affiliates meeting. “ABC wanted to have McDermott signed to give affiliates assurances about next year’s schedule,” a source said.

At the Dallas meeting Thursday, David Westin, president of ABC Television Network Group, told affiliates the company has a high regard for McDermott and would pursue her if she became available.

ABC has fallen to third place in some key demographic ratings.

In Washington on Thursday, Iger told a reporter that the prime-time schedule developed by Harbert could use improvement.

Although McDermott is highly praised for her creative talents and her ability to deal with stars and writers, some in Hollywood wonder whether she is seasoned enough as an executive for the job as president.

Another executive suggested that as networks increasingly become just a cog in the wheel of sprawling entertainment giants, the job as entertainment president “isn’t what it once was, when network presidents made unilateral calls.”

“With Iger, Ovitz and Eisner over you, how much power will she really have?” he said.