Letterman Bid Reflects ABC’s Shift From News

ABC’s dramatic bid to bring David Letterman’s late-night talk show over from CBS to replace “Nightline” marks only the latest slight to ABC News--once the network’s crown jewel--since Walt Disney Co. acquired the network. The proposed deal underscores a power shift from the network’s high-profile news anchors to its entertainment side.

Despite heightened interest in national and world events after the Sept. 11 terrorist attacks on the World Trade Center and the Pentagon, ABC insiders, competitors and critics say the news operation that former ABC News President Roone Arledge assembled is being undermined as Disney seeks to rehabilitate the struggling network amid tough economic times.

ABC has made a lucrative, undisclosed offer to Letterman, whose contract with CBS expires in August. Reaching a deal would displace “Nightline”--the prestigious news program anchored by Ted Koppel that ABC has broadcast at 11:30 p.m. for more than 20 years--and the discussion show “Politically Incorrect With Bill Maher.”

Reacting to reports of the talks that leaked out Thursday, Letterman’s representatives issued a statement saying the host is negotiating with CBS and it would be “inappropriate at this time to discuss any inquiries we may have received from other networks.”

Still, Letterman’s courtship has come from the highest levels at Disney--including Chairman Michael Eisner, who made a reference to “Nightline” in testimony Thursday before the Senate Commerce Committee, even as his staff pursued a deal that would eliminate the show from the nightly schedule.

Beyond the overtures to Letterman, other decisions reflecting the power shift toward entertainment include moving Barbara Walters’ newsmagazine showcase “20/20” from the Friday time slot it occupied for more than a decade, replacing it with a Disney-produced drama; and ordering an entertainment program featuring U.S. soldiers in Afghanistan--”Profiles From the Front Lines,” under the aegis of “Top Gun” producer Jerry Bruckheimer--despite news division objections.

At this point sources say the decision regarding Letterman’s move rests with the mercurial host. Letterman taped two shows Thursday before heading off on a scheduled vacation that will leave the show in reruns next week.

Although “Late Show With David Letterman” trails NBC’s “The Tonight Show With Jay Leno” in the ratings, it remains highly profitable for CBS, which clearly wants to retain the franchise.

CBS declined to comment, while ABC issued a statement saying that “Nightline” “has been and continues to be a valuable contributor to ABC. . . . We are hopeful that ‘Nightline’ and Ted will continue to make significant contributions to ABC.”

The ratings for “Nightline” eroded somewhat this year as competition from 24-hour cable news channels has grown increasingly fierce. Additionally, over the last year Koppel has reduced his role on the show. Still, ABC news division President David Westin reminded the staff Friday that the show made $13 million in profit last year and that its ratings had dropped much less than the network has in prime time. However, critics who monitor news saw the latest development at ABC as illustrative of a telling shift in priorities.

“It’s a fundamental change, [and] symbolically, it’s important,” said Carroll Doherty, editor of the Pew Research Center for the People and the Press in Washington, D.C. “If it occurs, the statement from the network no doubt will be, ‘This doesn’t represent a diminution in news in any way,’ but the facts are pretty obvious. . . . This show hasn’t trimmed its sails at all. It presents serious news and didn’t lighten up like some of the morning shows.”

Beyond high-stakes corporate gamesmanship, the situation highlights the tensions TV news divisions face as part of companies such as Disney--which have grown larger in recent years through consolidation and are driven by profit-and-loss statements. While that has been true at all the networks, TV industry sources see the battle shaping up at ABC as particularly fractious.

In fact, an agreement would have benefits for Disney far and above ABC, given that the studio has a major investment in New York City theater, where its “Lion King,” “Beauty and the Beast” and “Aida” are running on Broadway. Letterman’s show has always acted as something of an advertisement for New York City, which still is suffering from a tourist downturn after Sept. 11.

Word of the proposed deal completely blindsided ABC’s news division and Westin, who was said to have learned about the talks Thursday night.

Sources who heard Westin on Friday morning’s staff conference call described him as upset as he discussed what would be a “tremendous blow.”

As for Koppel, he could be offered other opportunities, perhaps in prime time, but any move out of late night would likely breach a new five-year contract he signed in December 2000.

ABC News and “Nightline” officials declined to comment, but in his daily e-mail to viewers, executive producer Leroy Sievers called it “a difficult day for all of us at ‘Nightline,’ the first, I fear, of many difficult days to come.”

Sievers said the staff learned Thursday that the New York Times was going to report on ABC’s negotiations with Letterman to replace the show at 11:35 p.m. “This came as a complete shock to all of us. Ted has returned from what was to have been a long weekend, but to this point, no executive from ABC or Disney has spoken to him. . . . For now, we are going to let our work speak for itself.”

Complaints from the news division to Disney have largely gone unheeded, a departure from the relationship news talent enjoyed with management before Disney acquired Capital Cities/ABC in 1996. Under the previous regime, ABC Entertainment executives for years were thwarted in their attempts to secure valuable prime-time real estate by the network’s powerful news anchors, including Walters and Diane Sawyer.

Stewardship of ABC News passed in 1998 to Westin, the network’s former general counsel and onetime right-hand man to Disney President Robert Iger. Westin has labored to overcome his lack of journalistic credentials. Some staffers fault Westin for not being in a position to argue forcefully against ABC’s desire to boot “Nightline” from its current slot.

Peter Jennings, anchor of ABC’s “World News Tonight,” expressed support for “Nightline” but declined to discuss the broader issues.

“I didn’t know about this,” Jennings said. “But I do know this: Ted and ‘Nightline’ exemplify the high quality of ABC News and contribute to making us unique.”

Koppel has criticized the major networks’ lessened commitment to news gathering, particularly abroad. In an interview with The Times days before the Sept. 11 attacks, he said: “We have convinced ourselves . . . that the American public doesn’t care about foreign news. It’s so convenient for the industry right now to say the American public doesn’t care. That way, we can cover Congressman [Gary] Condit 24 hours a day. It’s easy, it’s cheap and people do seem to be watching.”

Whatever ill feelings exist at ABC News, Disney officials have made it clear that reviving ABC’s prime-time ratings and profits are a priority. Both have fallen dramatically this season, due in part to the failure of new series and the rapid ratings decline of the once wildly popular quiz show “Who Wants to Be a Millionaire.”

Other recent deals underscoring Disney’s commitment to ABC include signing Fox commentator John Madden to join “Monday Night Football” next season and paying a record fee for TV rights to “Harry Potter and the Sorcerer’s Stone” and its sequel.

As cable has poached on the franchise’s “news story of the day” territory and the famously contrary Koppel has cut his air time to three nights a week, “Nightline” has worked hard to reshape its identity. Increasingly, it has tackled neglected stories, such as a recent series on war in Africa.

Carl Gottlieb, the deputy director of Project for Excellence in Journalism in Washington, called “Nightline” “one of the most serious news shows on television” but acknowledged the various mitigating forces affecting TV news, including the sluggish advertising market and the glut of news on cable outlets.

“In the new media environment, if I’m Disney and I look around and see NBC and CBS are making money with Leno and Letterman, then I ask myself, ‘Well, why not me?’ ” he said.

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Times staff writers Dana Calvo and Paul Brownfield contributed to this report.