ABC-CNN Merger Talk Has Troops Spooked

On election day, CNN staffers looked up to see their larger-than-life founder, Ted Turner, sweeping through the newsroom on a pep-rally mission of handshakes and waves.

“When Ted walked in the room, it really crystallized for me where I am, what we are, how we changed the business,” said anchor Aaron Brown, who left ABC News for the 24-hour cable news network. “These guys had a vision. This is really why we’re here, for big nights.”

But it might well be Turner’s last big night in an independent CNN newsroom. His once-renegade baby is negotiating a merger with the oh-so-establishment ABC News in a new company 70% owned by CNN parent AOL Time Warner Inc. and 30% owned by ABC parent Walt Disney Co.

Turner has been publicly silent on the possible deal (although he is set to appear on Brown’s “NewsNight” tonight, where he surely will be asked). People familiar with the situation say he is supportive one day, opposed the next. That apparent ambivalence sums up the feelings of many far down the food chain at both news organizations.

The deal has obvious, major financial benefits, at a time when news gathering costs are soaring and competition for ad dollars is fierce. But there is a rapidly building fear of a serious culture clash between the two sides and the prospect of sizable layoffs, as the two seek to pare $200 million from their combined costs.

On election night, Turner said he had been told not to comment. “I can talk about bison burgers and the weather,” he joked. When pressed, he quoted from “Bambi”: “As Thumper said, ‘My mother always taught me, “If you can’t say anything nice, don’t say anything at all.” ’ “ Laughing, he turned and said, “And you can write that he walked away humming the tune ‘Oh, we ain’t got a barrel of mon-ey....’ ”

In other words, the merger is necessary -- but not necessarily welcome.

With deal points being swapped every couple of weeks, executives are adamant that a pact, if any is to be made, won’t come together before the first quarter of 2003 and could take a year to implement. Some tens of millions of dollars in savings on overlapping satellite time would be instant, but larger savings in job cuts and infrastructure would be imposed gradually over three to five years, some insiders say. Others argue that the cuts would have to be made more quickly because dragging out the integration of two corporate cultures only makes it more difficult.

That both AOL Time Warner Chief Executive Richard Parsons and Disney Chairman Michael Eisner want to see a deal happen has propelled the discussions. But the reality is that both companies have more urgent priorities, including ABC’s poor prime-time ratings and AOL’s struggling online division.

So far, company insiders say, the two sides haven’t even agreed to make the talks exclusive, and either one of the companies’ boards could ultimately shoot down a merger. Eisner recently said chances of a deal were “50/50,” odds echoed by other executives.

“We are exploring an opportunity, but there are benefits and risks that must be considered,” said Jamie Kellner, chairman and chief executive of Turner Broadcasting System Inc., which oversees CNN. “I’m committed to continuing to explore this, but at this point there isn’t enough information to commit to a deal.”

Executives said that while there is no one sticking point, issues of control must still be worked out, including what the head of the new organization can decide unilaterally and what must be cleared collaboratively. There are also decisions to be made about such things as the promotion time each side would commit to and what compensation would be paid if, say, ABC cut back on a newsmagazine hour.

There also is skepticism among some rivals over how the two sides can find $200 million in cuts. Merely closing overlapping bureaus, they say, won’t do it -- a fact not lost on CNN and ABC executives who are looking for creative financing models.

At the moment, only one thing seems certain: The troops are growing increasingly unsettled and scared.

Rumors are rampant. The fact that Kellner and Disney President Bob Iger shared a Halloween day lunch set off so much speculation of an imminent deal that their companies had to publicly disavow it. CNN News Group Chairman Walter Isaacson and ABC News President David Westin, whose homes are kitty-corner in Bronxville, N.Y., jokingly accused each other’s companies of fueling the talk, as their children went trick-or-treating that night.

Yet another rumor, which recently swept ABC News, was that a list already had been made of staffers targeted for layoffs.

“Search my desk,” Isaacson said during an interview, pointing to a relatively clean desktop in his office overlooking CNN’s Atlanta headquarters newsroom. “We’re not at that stage.”

Still, ABC employees, who are generally paid more than their CNN counterparts, say they are particularly worried that on beats and in cities where CNN and ABC have overlapping producers and correspondents the higher-paid person will get laid off, regardless of who is more qualified. Employees say Westin has been telling the troops that they should wait and see, but that a deal could be positive.

“I think [a merger] can work,” said David Bohrman, executive producer of CNN’s “NewsNight,” as well as the election coverage. He has worked at both networks, in addition to NBC. He recalled that when TWA Flight 800 crashed, it was MSNBC’s third day on the air. The cable station provided NBC with immediate benefits.

But, Bohrman said, “part of it is easy and part of it I can’t begin to think about.”

Though the two sides have different cultures (ABC News is more focused on programs; CNN targets straight news gathering), Bohrman said, there is also “a lot of cross-pollination.” CNN long ago passed the news renegade mantel to Fox News Channel. The CNN newsroom is populated with former network newsies: Brown, Bohrman, Connie Chung, Jeff Greenfield and Anderson Cooper from ABC alone.

Sources at both companies said anchors have been supportive and even signed off on the deal. But colleagues said ABC’s Peter Jennings, for one, has questions about what effect this will have on the journalism. He declined to comment.

The talent glut that could result from a merger has been a source of intense questioning.

ABC’s Barbara Walters and Diane Sawyer already compete for big interviews. At CNN, its successful efforts in the last two years to improve its once stodgy on-air image means it, too, must grapple with that problem. That was apparent on election night, when Brown, Judy Woodruff, Paula Zahn and Jeff Greenfield were all on the anchor desk using hand signals to vie for air time, with 10 minutes each hour also carved out for Larry King. Connie Chung had the night off.

Each year, there are fewer CNN staffers who were there 22 years ago, when Turner had his crazy vision of 24-hour news that shunned stars and programs for getting facts on the air fast. A pre-election-night party in Isaacson’s two-level, stark-white Atlanta loft, with trays of sushi and goblets of red wine, had an energy and hipness that would have been inconceivable in CNN’s scrappy early days.

Several people familiar with the situation said the current thinking is to keep ABC and CNN editorially independent, with producers choosing material from a shared pool of correspondents and video.

CNN is negotiating from a more confident position than it had even two years ago, when employees were demoralized by dropping ratings, layoffs and management turnover as the network tried to determine its future course. Today, while Fox News has the ratings lead on cable, CNN is focused and employees are pulling together, staffers said.

“We have more reporters out there doing more journalism than ever before. Sometimes it’s not the flashiest thing out there, but it goes right to the core of CNN’s mission,” Isaacson said.

What’s more, CNN has the air time that will be so crucial in the future.

Election night in the state-of-the-art CNN control room was a scene of controlled chaos, as producers debated if they had enough information to make predictions of winners, tried to squeeze in reports from field reporters and monitored the competition -- all except ABC News.

ABC’s local Atlanta station preempted the network’s national coverage for its own reports. To some, that was proof enough of ABC’s need to hook up with a big cable partner to keep its best reporting on the air.

“Most employees I talk to aren’t paranoid,” just curious, Isaacson said. “People have said to me that they truly see the logic here.”