Fallout Beyond ‘Nightline’

The watershed moment for network news--when it was put on notice that budget concerns, not just public service, would henceforth be a priority--came in 1987 courtesy of CBS Chairman Larry Tisch. At the time, employees were blindsided by a report that Tisch planned a major reduction at the network’s news division. Tisch ultimately cut 10% of its $300-million budget and a sixth of its 1,220 jobs.

Echoes of 1987 reverberated through the recent revelation that ABC and parent Walt Disney Co. had been plotting to replace Ted Koppel’s “Nightline” with comedian David Letterman. “[It’s] even worse,” said Alex Jones, director of Harvard University’s Shorenstein Center on the Press.

The vulnerability of “Nightline,” one of television news’ most honored programs, has spurred an outpouring of support, from ABC’s Barbara Walters to CBS’ Dan Rather to 10,000 viewer e-mails, petitions and a “Save Nightline” Web site. As the initial shock fades, however, industry executives have been trying to decipher what, if anything, the change portends for network news.

Disney’s attack on “Nightline” is just the latest indignity for critics already bemoaning the declining state of TV journalism. They cite shrinking foreign bureaus, increasing hype and entertainment packaging, and obsession with celebrity to boost ratings, with actor Leonardo DiCaprio’s interview of President Clinton for ABC News representing a particular low point. The trend of news divisions being subsumed by ever-bigger entertainment giants with other priorities is unlikely to slow with a new wave of media consolidation imminent in the wake of a recent Supreme Court ruling.

Many in the industry trenches counter that network news has adapted to new budget realities and, as NBC News proves, can be highly profitable. The “Nightline” situation, they argue, is distressing for the callous way ABC handled it. But it is only indicative of the difficult economic state of Disney, a financial opportunity in Letterman that the company would be irresponsible not to pursue, and a reflection on Koppel himself, who has cut back on-air hours in recent years.

The one thing everyone agrees is that the incident reinforces the message that profitability matters and will increase the pressure for CBS or ABC to make a long-discussed deal with cable’s CNN to share news-gathering costs. So far, talks have languished because neither side is willing to cede control, with network executives insisting CNN-style news is shallow.

If “Nightline” goes away, it will have broad financial implications for ABC News far more damaging than the symbolic ones. Every program at ABC News has to absorb overhead costs for the entire operation, and other programs such as “Good Morning America” and “World News Tonight” will have to pick up the “Nightline” slack.

“The loss of air time will cause more difficulties for the division,” said Tom Wolzien, a media analyst for the investment research firm Sanford C. Bernstein.

In the critics’ camp, senior National Public Radio correspondents in a letter to the editor, called “Nightline” a “beacon of intelligent information in a TV landscape marked by increasing irrelevancies,” adding that anonymous Disney remarks about the show’s irrelevancy were “a sorry commentary on the vulnerability of serious broadcast journalism.”

Disney President Robert Iger has said those sentiments don’t reflect the company’s feelings. Still Disney’s willingness to trade away “Nightline’s” cachet so painlessly suggests the possibility of a ripple effect to those already decrying the erosion of TV news. “It would have seemed inconceivable that one of the three networks would take on one of the genuinely marquee news programs ... and simply give it a swift kick,” says Jones. “That suggests that the future of network news is very much in jeopardy.”

And former NBC News President Reuven Frank, in a commentary for USA Today similarly predicted that the demise of “Nightline,” if it comes, will be the first in a string of disappearing programs, with the dinner-hour newscasts “in their last days.”

So is the sky falling? Well before the “Nightline” imbroglio, the evening newscasts were hurting, as local stations grabbed pre-prime time hours for more lucrative game and entertainment shows pushing the network evening newscasts earlier. In the Central time zone, network news airs at 5:30 p.m., all but ensuring that the young working professionals advertisers covet won’t be home to watch.

The anchors have been aging along with their audiences: Dan Rather is 70; Tom Brokaw and Peter Jennings are in their 60s. Few potential successors have the same breadth of experience and stature, which leads many to conclude that when this generation of network news anchors retires, the shows will be reconfigured or dropped.

Nonsense, said one senior industry executive, who insisted the nightly news will be around for a long time to come, its value enhanced after the events of Sept. 11, when news-hungry viewers tuned in.

In fact, the audience erosion of the 1990s has largely stopped, said another, Paul Slavin, executive producer of ABC’s “World News Tonight.” He noted that during the week of Feb. 25, more than 30 million people tuned in on average to the three networks’ evening newscasts.

“That doesn’t feel irrelevant to me; it doesn’t feel like something dying to me. As long as people are voting with their fingertips and remotes, we’ll exist,” Slavin said.

Executives at competing networks said they have already adapted to being smaller divisions of profit-pressured conglomerates. At General Electric-owned NBC, one executive noted that although Katie Couric will earn $65 million over four years under her new deal with “Today,” she is on air more than 10 hours per week, gets recycled on MSNBC, and reports for “Dateline.”

MSNBC has inoculated NBC News from drastic reductions, said another senior executive there. Although the cable news channel, a joint venture with Microsoft, loses money, NBC News uses it to amortize millions in costs, asking correspondents in Afghanistan, say, to file around the clock on MSNBC as well as for “Nightly News.”

Though CBS doesn’t have a cable news channel, the network, more so than ABC, has also found ways to amortize its expensive news infrastructure by spreading programming around. There’s a co-production for “BET Nightly News,” projects for MTV and VH-1, perhaps even future news shows for UPN. All those networks, like CBS, are units of Viacom. CBS News, in fact, now has more employees than before the Tisch-mandated cuts, although fewer cover hard news.

That leaves ABC News in a category by itself. Still suffering from when Roone Arledge ran the division and put together an esteemed but expensive talent roster, ABC News already eliminated 125 jobs last year, and dozens of employees have taken pay cuts of up to 25%. Right after Disney bought Capital Cities/ABC in 1996, the company scrapped plans to launch its own all-news cable channel after Fox and NBC embarked on their own efforts, saying the start-up costs were too high.

In retrospect, that may have left ABC vulnerable. More recently, said media analyst Wolzien, it was a failure to invest in entertainment shows to eventually replace the quiz hit “Who Wants to Be a Millionaire” that has led to prime-time problems in a down economy. “If the network were doing well, odds are there wouldn’t be as much profitability pressure” in late night, which drove the bid for Letterman, he said. ABC is “reaping what was sown or not sown strategically.”