subject: The Network Takeovers Why Abc Survived Best [print this page] DAVID W. BURKE WAS A formal man. A vice president of ABC News, he was renowned for his starched white shirts with gold zentai ,Latex Sports Catsuit round tortoise-shell glasses and fastidiously trimmed sandy hair. High-minded and exacting, the son of a Brookline, Mass., policeman, he was known around ABC News as "the headmaster." But here he was at the Arizona Biltmore in Phoenix, on his feet, clapping like an Amway salesman. He looked down at his hands, and willed them to stop. "Christ, what the hell am I doing?" he remembers thinking. He glanced around and saw 160 fellow executives, more than half of them from ABC, hollering like cheerleaders at this, the first management retreat since Capital Cities Communications officially swallowed the network on Jan. 3, 1986.
For three and a half days in late January, officials of the two companies met in the Arizona desert. When David Burke looked up at the Biltmore's stage, he saw Thomas S. Murphy, the lanky, avuncular chairman of the merged companies, winking at familiar friends, flashing a perfect row of white teeth. He listened as Murphy singled out the Cap Cities divisions that had had great years. "He was like a politician playing to his old constituency," Burke later remembered.
"Stand up and give them a round of applause," Murphy urged everyone -- especially, Burke felt, the folks from ABC.
So Burke, like everyone else, jumped up and, a moment later, felt miserable.
He was not alone. Employees at all three networks were feeling anxious. Ownership of ABC, CBS and NBC would effectively change hands within nine months. ABC was first, acquired by Capital Cities Communications, a notoriously "lean and mean" company that owned radio stations, TV stations (several of them ABC affiliates), cable systems, newspapers and magazines. In June 1986, NBC's parent company, RCA, would be acquired by General Electric, an industrial giant that had shed 25 percent of its work force in the past five years. And in September, Laurence A. Tisch's Loews Corporation, a holding company known for rigorous cost cutting, would gain control of CBS, William S. Paley's "Zentai " network.
The adjustment to Cap Cities was difficult for many old ABC hands. Indeed, the month of January had been one prolonged insult. It was unnerving enough to be taken over Latex Suspender Catsuit by an affiliate, but even more so by a company whose local newscasts were among the first to billboard sensationalist crime stories. Employees took a punch in the nose when Frederick S. Pierce, president of ABC, was replaced by a Cap Cities executive, John B. Sias, a ramrod-straight for-mer paratrooper with a fondness for peculiar practical jokes -- he once bounced through ABC's network newsroom on Lincoln's Birthday disguised as the former President.
A second jolt came when Sias informed Roone Arledge that he would no longer be president of ABC Sports, a title he had held for 18 years. Cap Cities said it wanted him to concentrate on managing the network's news division, which he had run since 1977. Arledge wasn't buying it. He knew Cap Cities abhorred his chauffeured Jaguar, thought he was the exemplar of what Sias and Murphy and Daniel B. Burke, the president and chief operating officer of Cap Cities, referred to as ABC's "limousine mentality." The line on Arledge was damning. As Sias put it, "He likes to spend money."
Like much else at ABC, the limousine mentality was a holdover from the flush era when the networks enjoyed a monopoly. Ten years earlier, in 1976, 90 percent of American viewers watched evening shows on ABC, CBS or NBC. On a typical night, the average household received just seven stations, and TV Guide listed only 14 viewing options. Neither Showtime nor ESPN nor CNN nor the Disney Channel nor MTV was included among the 14 -- aside from services like the struggling HBO, cable programming barely existed. Only the Big Three could afford to exhibit recent Hollywood movies. There were few if any syndicated shows, and none bulldozed a time period the way "Wheel of Fortune," "Jeopardy" or "The Oprah Winfrey Show" does today.
There were, in early 1976, few commercially available VCR's or cordless remote controls, no satellite distribution of programs, no backyard dishes, no superstations, no Fox Latex Vest and Trousers Two Pieces Dress Catsuit network and just over 100 non-network commercial independent TV stations in the entire United States. Advertisers wishing to reach mass audiences were held hostage by the networks, whose revenues swelled by 324 percent between 1976 and 1984. The network was king.
