Entertainment chief’s exit ends a stormy era at ABC

Former ABC Entertainment President Steve McPherson had been known in Hollywood over the last six years for his hair-trigger temper, tussles with his bosses and taking big swings to find the next ratings juggernaut to replace " Lost.”

ABC Entertainment: An article in Thursday’s Business section about the resignation of Steve McPherson as president of ABC Entertainment included photos of three key ABC series. The caption with a photo from “Modern Family” erred in calling the show “Modern Town” and saying it came from a rival network. The series was created by a rival studio, 20th Century Fox Television, as was noted in the article. —

Along the way, ABC spent more than $500 million producing TV pilots, buying scripts and signing deals with writers and producers to create new shows. Yet despite numerous splashy prospects — including " Dirty Sexy Money,” “Flash Forward,” “V” and “Pushing Daisies” — McPherson never hit one out of the park.

He finally struck gold with “Modern Family,” an unconventional comedy about an extended family that became one of last season’s biggest hits. The so-called mockumentary helped ABC launch a block of successful comedies, but it wasn’t enough to offset the declining audiences for the network’s onetime stalwarts “Grey’s Anatomy,” “Desperate Housewives” and " Extreme Makeover: Home Edition.”

ABC owner Walt Disney Co. declined Wednesday to say what precipitated McPherson’s abrupt departure, which came just two months before the start of the new fall season.

Representatives for McPherson did not return requests for comment.

Paul Lee, president of Disney’s buoyant ABC Family channel, is expected to be named the new president of ABC Entertainment. The former BBC executive will be in charge of programming at the broadcast network as well as overseeing ABC’s TV production studio, according to knowledgeable people.

McPherson’s exit couldn’t come at a less opportune time for ABC. This week more than 200 TV industry journalists are gathered in Beverly Hills to preview the new fall season. McPherson was scheduled to promote ABC’s shows to the group Sunday. Meanwhile, behind the scenes, Disney executives have been trying to negotiate a new contract with the nation’s No. 2 cable operator, Time Warner Cable, and win higher fees for its programming. An appearance of disarray could weaken its bargaining power.

More problematic, however, McPherson’s hasty resignation brings to the surface a host of problems at ABC and Disney’s broadcast TV operations.

Nightly newscasts, once the face of the network, have lost cachet and viewers to the 24-hour news outlets. This year, the network slashed more than 20% of its news staff as its signature newscasts, including “Good Morning America,” fell further behind NBC in the ratings. Long dominant in daytime, ABC is facing a future without the queen of talk television, Oprah Winfrey, who is signing off next year to build her own cable channel. And its soap operas, including the venerable “General Hospital, have lost steam as reality shows provide more voyeuristic viewing for audiences.

The cumulative effect has led some to question how committed Disney, and its technology-savvy chief executive, Bob Iger, are to the mature broadcasting business that only a few years ago was considered a keystone of the company.

“In a company that is doing very well across multiple fronts — the movie studio is on fire with huge hits and the theme park business is recovering — the one area of the company that remains challenged is the ABC network,” said analyst Richard Greenfield with BTIG Research. “ABC has become an incredibly less core part of Disney. There are people who would love to see Disney not be in the broadcast business. But I’m not sure who the buyer is, or how do they get that done.”

McPherson took over ABC in 2004, during another period of turmoil. The network was struggling for an audience and Disney sacked its two top programmers. Within a few months, it caught fire with such colossal hits as “Lost,” “Desperate Housewives” and “Grey’s Anatomy.” ABC hoped that it could use those shows to launch a new generation of hits.

Then, just as ABC appeared to gain momentum, the writers went on strike — disrupting two TV seasons and robbing audiences for the new shows. ABC suffered more than other networks from the strike because it relied more heavily on scripted programs.

Indeed, in recent years more drama has been playing out at ABC’s headquarters in Burbank than on the small screen. McPherson clashed with his boss, Anne Sweeney, president of the Disney ABC Television Group, as well as the head of the ABC Studios production unit. McPherson lobbied for control over network programming, including the studio. Last year, Iger relented and granted McPherson his wish — but this season’s biggest hit, “Modern Family,” came from a rival studio, News Corp.'s 20th Century Fox Television. That undercut McPherson’s standing.

ABC ended the most recent TV season tied with NBC for third place in the important demographic of viewers 18 to 49, a sore point for Disney.

In April, when top company executives previewed McPherson’s development for the upcoming season, they liked a few prospects, including “No Ordinary Family,” but found the balance of the slate underwhelming, according to people familiar with the meetings. McPherson complained to talent agents that he was under tighter financial restraints and had to seek budget approval from the company’s chief financial officer. In e-mails he mused to his allies that he was soon going to be fired.