Troubles at ABC May Leave Disney Vulnerable

ABC television chief Lloyd Braun stood before a crowd of financial analysts in Orlando, Fla., on Thursday and succinctly explained why his network’s ratings have languished in fourth place.

“We still don’t have a truly dominant series or night,” said Braun, chairman of ABC Entertainment Television Group. But stay tuned, he said. “We are going to surprise some people and sooner than anyone thinks.”

Wall Street and Hollywood have heard the network’s turnaround talk before -- and for now, the surprises seem at ABC’s expense.

In making its bid for network parent Walt Disney Co. this week, cable giant Comcast Corp. blamed the long-suffering ABC for dragging down Disney’s fortunes. The network, the industry’s most profitable when Disney agreed to buy it in 1995, lost by some estimates as much as a half-billion dollars last year.

The failures of ABC have provided Comcast executives with perhaps their strongest ammunition in what looms as a contentious corporate takeover battle.

On Thursday, Disney Chairman Michael Eisner continued to defend the company’s strategic decisions and financial well-being. Sources said Disney has hired a prominent takeover defense specialist, New York lawyer Martin Lipton.

What’s more, the company’s stock continued to climb, suggesting that investors believed that Disney was worth more than the $51 billion in stock that Comcast was offering.

But the seemingly chronic problems at ABC suggest that all is not well in the company’s management suites.

ABC has suffered through a series of strategic blunders and bad luck, including the death of actor John Ritter, who was the star of the network’s fledgling hit, “8 Simple Rules for Dating My Teenage Daughter.” A plan to revive Tuesday and Wednesday night comedies was short-circuited by Fox’s monster reality hit, “American Idol.” When the network had a hit in 1999 -- “Who Wants to Be a Millionaire” -- it exhausted viewership by running the program up to four nights a week, failing to develop new shows in the process.

Many in Hollywood’s creative community complain of having trouble figuring out who has authority over the network, making it difficult to pitch ideas with any degree of certainty.

“The decision making at ABC involves so many creative executives that there isn’t always one voice coming out,” said longtime talent agent Bob Levinson, head of television at International Creative Management.

On any given project, there be may as many as six executives weighing in to greenlight or reject a show. Braun and Entertainment President Susan Lyne, for example, sometimes are countermanded by Eisner and/or Disney President Robert Iger, who ran ABC when Disney acquired Capital Cities/ABC.

Last May, Braun had considered putting a crime drama, “10-8,” on the fall schedule but decided against it. Eisner, however, had seen the pilot in a private screening and made a strong push for it, according to one executive familiar with the situation. So “10-8” aired on Sunday nights last fall. Viewers mostly ignored it.

Disney has also had trouble fostering synergy between ABC and its other corporate divisions. Prime-time programs designed to promote Disney feature films have delivered mixed results. The movie staple “Wonderful World of Disney” has sunk in the ratings since moving from Sundays to Saturdays this season, but the company still considers the shift a qualified success.

Several studio executives and producers who sell programs to ABC said the network simply has been unable to find a programming identity.

Last year, the network gambled heavily on the reality genre -- and ended up with a cache of cheesy, much-ridiculed offerings such as “Are You Hot?: The Search for America’s Sexiest People.” The shows scared off advertisers, failed to connect with viewers and were ultimately disowned by a contrite Lyne.

“Some of this requires a little luck,” said Jay Sures, co-head of TV at the United Talent Agency. “The one thing that ABC is missing is their big hit, an ‘American Idol’ or ‘The Apprentice.’ They need a real breakout hit show.”

They’ve lost a few to the competition, each one raising questions about the judgment of decision makers at the network. ABC executives declined on Thursday to discuss the shows.

Disney’s in-house production facility, Touchstone Television, nearly five years ago developed a crime show about the work of forensic detectives, and scripts were delivered to the network. But network executives (no longer at ABC) didn’t think the show would work. Touchstone executives shopped the show around and CBS chief Leslie Moonves and bought it. Disney executives, however, refused to help finance the show, contending it might have limited international appeal that would cut down on the potential to recoup their investment.

Moonves pressed ahead instead with successful movie producer Jerry Bruckheimer. The show, “CSI: Crime Scene Investigation,” is now television’s most-watched.

Disney executives also had the rights to produce the unscripted show “Survivor,” but decided to pass because ABC’s then-entertainment president didn’t like the concept, sources said. Others at ABC began worrying about liability issues, fearing someone might starve to death on a remote island.

The show became a big hit on CBS.

ABC lost out on Donald Trump’s hit unscripted show “The Apprentice,” produced by Mark Burnett, who took “Survivor” to CBS.

When Trump agreed about a year ago to star in a so-called reality show, he told Burnett to go to ABC, where Braun had previously tried to lure the mogul.

After Burnett presented the concept, Braun, according to executives in the room, exclaimed: “I love it. Let’s do it.”

But some in the company questioned whether the show, which pits ambitious young entrepreneurs against each other, would appeal to a broad audience. Negotiations stalled when the network tried to whittle down costs. Burnett was demanding about $1.5 million an episode, said senior ABC executives, with about half that in fees for himself and Trump. ABC executives balked.

Burnett headed to NBC. Last month, he told reporters that ABC had “dropped the ball.”

For their part, Braun and other ABC executives said they were in negotiations and were blindsided by the NBC deal.

Last spring, ABC faced an unusual snafu on the eve of unveiling its fall schedule. It had picked a comedy called “The Big House” and flew cast members, including the show’s star and creator, Kevin Hart, to New York to meet advertisers.

While attending a weekend party, Hart accepted congratulations from well-wishers. The next day, he and the others were told to pack their bags and head back to Los Angeles.

“It was horrible,” said one person close to the show.

ABC executives declined to say why the “The Big House” was pulled but said they planned to launch it April 2.

One of ABC’s most publicized missteps came a year ago when executives gambled by scheduling three dramas on Mondays following the season finale of “Monday Night Football.” That lineup included “The Practice,” a legal drama that had long earned dependable ratings for ABC in its usual Sunday berth.

The move backfired, though, when ratings for “The Practice” tanked and its creator, the powerful writer-producer David E. Kelley, publicly excoriated the network for its “stunning stupidity” in moving his show.

ABC executives subsequently admitted that they had made a mistake and this season returned “The Practice” to Sundays, where it has rebounded.

During presentations in Orlando on Thursday, ABC executives insisted that, this time, they are on the way to recovery. They said that ABC should be profitable by next year.

ABC Television Network President Alex Wallau said Touchstone will soon have as many seven shows in syndication, potentially bringing ABC more than $1 billion.

“We have no illusions about how tough that future will be, and believe me, we are a long way from declaring victory,” he said. “But, for the first time in a long time, we feel like we are on track to make the ABC television network one that meets the expectations of our shareholders.”