ABC

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ABC//dt1st/mark2nd

By FRANK SWERTLOW

Staff Reporter

Jamie Tarses might turn out to be the least of the controversies at ABC.

While most of the news coverage last week focused on the departure of Tarses as president of ABC Entertainment, the circumstances behind her exit could have far more significance: Walt Disney Co.’s decision earlier this summer to merge its in-house TV production unit with ABC.

To Hollywood’s independent production community, ABC is becoming another Disney Channel and that means producers may have lost a major outlet for their shows.

“It’s the death of the independents,” moaned a former network executive who is now an independent producer. “It’s also the death of ideas. Independent producers bring in the unusual ideas, and that’s why most hits have come from independents over the years.”

The union of ABC and Disney’s Buena Vista Television Productions is part of an economic revolution in the TV industry. All the networks have been consolidating their assets to reduce costs, as profits, revenues and audiences shrink. The Disney/ABC merger is simply the most aggressive example of this trend. Because Disney owns both a broadcast network and a production arm that makes shows for network TV, both divisions duplicate many of the same functions.

Even producers agree that merging them seems to make sense economically. “If you have a lawyer at ABC doing the same job as one at Disney, you don’t need two lawyers,” acknowledged an independent producer. “It would be na & #271;ve to fault them from a business standpoint.”

ABC officials did not return calls on the subject.

Cutting costs should help ABC, the No. 3 network, in its struggle to turn a profit for the first time in years.

“This is part of the whole Disney reevaluation of the company,” said Dave Davis, an investment banker at Houlihan, Lokey Howard & Zukin. “They are trying to kick the stock price up.”

But even if the merger of ABC with Disney’s production arm is pleasing to Wall Street, some warn that it could have negative repercussions.

The concern is that an outside producer who pitches a show to ABC will take a back seat to any show created by Disney. There is good reason for such fears; once a show by an independent producer hits the lucrative syndication market, the profits go to the producer, not ABC. But if Disney owns the show, those profits go back to ABC’s corporate parent.

Though the network has said it will maintain an open-door policy, many top producers are likely to feel the dice are stacked against them when dealing with ABC.

“I think any outside supplier that goes to ABC is out of his mind,” CBS Television President Les Moonves told a group of TV critics this summer.

Moonves scoffs at another aspect of Disney’s plans: The studio has said it will continue to try to sell Disney-produced shows to other networks. “I think that if any network expects to get a show from that company, they’re out of their minds,” he said. “God forbid (Disney) should have delivered a hit to CBS.”

Despite the rhetoric, CBS also has its own in-house production unit. So do NBC and Fox. The goal of all these divisions is the same as the Disney/ABC combine: to get as many network-owned projects onto their prime-time schedules as possible or to make shows in conjunction with partners willing to give up a large share of their equity to get their projects into prime time.

Some producers and analysts believe there is very little difference between what Disney did with ABC and what its rivals are doing with their in-house production companies. Others disagree.

“The difference at Disney/ABC is that the head of the studio is calling all the shots,” said a veteran producer of TV movies. “The head of NBC Productions isn’t hanging out in the office of the head of NBC Entertainment. That flimsy Chinese wall that used to exist between network and studio is now gone.”

Tarses bristled when Disney TV chief Lloyd Braun took over her operation, which bought only one series from the studio for the fall.

“Her biggest failure,” said a former ABC executive, “was not that she didn’t buy the best programs, but she didn’t buy the most programs from Disney. She is a victim of vertical integration. She didn’t get it. She thought she could treat Disney like just another supplier.”

Jerry Isenberg, a former ABC executive who teaches at USC’s School for Cinema-Television, is among those worried about the disappearance of the “Chinese wall” between the network and TV production.

“The history of the separation of financial and creative interests has always helped creativity,” Isenberg said. “What Disney has done with this merger is not good for creativity. The interference of the programmer has destroyed the natural balance between programming interests and creative interests.”

For example, if David Kelley, the producer of such ABC series as “The Practice,” and “Snoops,” has a creative disagreement with ABC over one of his shows, he can go to his partner, Twentieth Century Fox Television, to intercede for him. But if Kelley and Disney have a deal, there is no one to go to at ABC, Isenberg said, because they are one and the same.

“It narrows the field,” said financial analyst Harold Vogel. “Everything you see is inbred. These (programmers) all go to the same high schools and colleges; they live most of their lives in Southern California with an occasional trip to New York. They are all upper middle class and liberal. That’s why all the shows look alike.”

Not every producer is afraid of making a deal with the new Disney/ABC. One independent producer said she would rather deal with Disney than the in-house production companies at ABC’s rival networks because Disney, as a large studio, understands production issues better than NBC and CBS, which have a shorter history in the production business.

Ultimately, few producers can finance their own projects. That means they will have to make a deal with a production company, often a major film studio. Making a deal with Disney/ABC eliminates a middleman.

“There is one less pig at the trough,” said one producer. “Who would you rather do business with, the guy who owns the printing press or the guy who knows the guy who owns the printing press?”

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