Driven by a need to overhaul its program development process and cut costs, Walt Disney Co.'s ABC has finalized a complex consolidation of its ABC Entertainment and ABC Studios operations.
The restructuring and creation of the ABC Entertainment Group, announced in January but completed only Thursday, will combine many of the business and creative functions of the two units.
The move follows a similar restructuring at NBC Universal, which late last year also combined its NBC network programming operations with its production studio and reduced staff. CBS and News Corp.'s Fox continue to operate their network and production studios as separate divisions.
As part of the merger, ABC is cutting 35 positions from the unit, which has between 300 and 400 employees. Those cuts follow 400 jobs that ABC eliminated across the network in January. Stephen McPherson, who was president of ABC Entertainment and is now president of the new entity, said the reorganization would "make us a stronger, more efficient team."
Hollywood, long immune to economic downturns, has not been so lucky in the current recession. Disney's cable sports behemoth ESPN is eliminating 200 positions, and late last year Viacom Inc.'s MTV Networks, which includes cable channels MTV, Nickelodeon and Comedy Central, cut 800 jobs. MySpace, News Corp.'s social-networking website, shed more than 400 employees this week.
ABC and NBC hope that a streamlined programming process will help turn the networks around. Both are coming off tough seasons, in which ABC finished third among viewers 18 to 49, the age group that advertisers most desire, and NBC finished fourth.
A major factor driving ABC's reorganization is a desire to get more shows that it owns on its schedule. The network noted when it first unveiled the plans that the new unit's "primary mandate will be to develop and produce compelling programming for broadcast on ABC."
That has been an issue as of late because ABC did not get many new shows out of its sister studio for its upcoming fall lineup. When the network unveiled its fall schedule to advertisers last month, eight of its 11 new shows came from outside suppliers.
Although that may save parent company Disney some money in the short term if the shows fail, it also means that if any become hits, the company won't be in a position to profit as much as it would if it owned the shows. Also, if a network has an ownership stake in its programming, it has a better shot at keeping costs in line than it does if a show is produced by an outside supplier.
Probably the most significant change as a result of the new structure is the elimination of the current programming units at both the network and the studio. Current programming departments usually take over the day-to-day management of a series after it is developed and put on the schedule. Under this structure, the development teams who worked on cultivating new shows will now stick with them through their run on the network.
Under the new structure, McPherson's top lieutenant is Executive Vice President Jeff Bader, the network's scheduling guru, who will now also oversee distribution for the unit across all platforms. Barry Jossen, who had been a key executive at ABC Studios, will also serve as executive vice president with oversight over creative production, while Executive Vice President Suzanne Patmore-Gibbs will be responsible for scripted programming.
Kim Rozenfeld, ABC's senior vice president of current programming, is leaving his post but is expected to sign a production deal with the network.