Struggling to Leave the Cellar

Mired behind its rival networks, NBC seeks a winning formula

The NBC brass reside under tight security on the sixth floor of the RCA Building in Manhattan. To one side are the offices of the chairman and the president, an area referred to by nervous underlings as "the court of the Borgias." The senior executive offices are on the other side, along a stark corridor lined with a tan carpet. With its plain white office doors and antiseptic ambience, a visitor observed last week, the place has the look of a hospital. "No," replied an NBC executive. "It is more like an insane asylum."

Paranoia has been running at a high level in the executive suite for months, and last week's events were hardly likely to reduce it. The final Nielsen ratings for the regular 1978-79 television season gave NBC its worst average in more than a decade. Johnny Carson, the brightest star in the insomniac firmament, was keeping network nabobs awake at night wondering whether he would indeed quit the Tonight Show before his contract runs out in April 1981. An embezzlement scandal was boiling, affiliate stations were restless and gossip was rampant. Parent Company RCA laid it all on the bottom line at its annual meeting last Tuesday. Referring to "the very low ratings of NBC programs over the past month to month and a half," RCA President and Chief Executive Edgar H. Griffiths reversed a more optimistic earlier estimate and declared: "Profit for NBC will be substantially below that of the prior year."

As RCA's most visible subsidiary, NBC does much to shape the public's perception of the $6.6 billion conglomerate (electronics, vehicle renting, communications, food processing, records). So far, despite NBC's long stay in the ratings cellar, the stockholders have shown restraint, probably because in the TV business even last-place networks do very nicely. Although pretax profits dropped 20% last year, NBC still earned $122.1 million.

But demands for higher earnings will undoubtedly grow during the fall season unless ratings are on the upswing. By then, Fred Silverman, 41, NBC's $1 million-a-year president, will have had ample opportunity to work his programming magic, if he has any left. For Silverman, who made his reputation at CBS and ABC, the task is formidable. Past NBC programmers failed to foresee the impact that the post-World War II baby boom would have on the industry. When the network belatedly went after the youth market in 1974, it managed to alienate a goodly portion of its once loyal older audience. Subsequent programming regimes sacrificed long-term ratings stability to score quick fixes with movies, miniseries, and other expensive ($1 million vs. $500,000 for a series episode) specials.

NBC had been a prodigious profit cow for RCA in recent years, regularly furnishing about one-quarter of pretax earnings and in 1975 supplying 31%. But the milk was growing watery. By the end of 1978, NBC's pretax profit contribution dropped to 17.6%, less than two other RCA divisions. So Griffiths--"Bottom Line Ed," as he is known at RCA--went out and hired "the man with the golden gut," Fred Silverman.

Last June, Silverman hit NBC like a springtime twister in Oklahoma. He reshuffled his programming executives, added 30 people to his West Coast creative staff and commissioned 45 new pilots and films. It was too late to overhaul the 1978 opening fall lineup, but at mid-season Silverman peremptorily canceled all nine new shows scheduled by his predecessors.

The results were catastrophic. For the first three months of 1978, NBC had an average weekly rating of 18.1; during the same period this year the ratings averaged 16.8, and in the last week of April they plunged even lower, to 14.3, a disastrous 4.9 points behind ABC and 4.6 in back of CBS. NBC ended with a season average of 17, down 1 point from 1977-78 and 4 points behind first-place ABC. Since each point translates into $30 million in pretax profits over a year's time, this means that NBC stands to gross $120 million less than ABC this year. CBS finished with a rating of 18.7, which would put it some $50 million ahead of NBC.

As if to bless its fall schedule, NBC will soon revive its famed peacock, replaced in 1976 by an "N" logo. Also returning this fall are five old standbys (Little House on the Prairie, CHiPs, Quincy, The Rockford Files and The Wonderful World of Disney) and five shows inserted at midseason (Diff'rent Strokes, B.J. and the Bear, Mrs. Columbo, Real People and Hello, Larry). Significantly, no sitcoms were among the six new shows announced by NBC: The Misadventures of Sheriff Lobo, a comedy-adventure starring Claude Akins as a sheriff with a touch of larceny; From Here to Eternity: The War Years, from last year's mini-series with William Devane; Buck Rogers in the 25th Century, another attempt to crack the prime-time jinx against sci-fi shows; Shirley, a family comedy-drama about a mother facing single parenthood; The Force, a spin-off from last year's mini-series To Kill a Cop; and A Man Called Shane, about a globetrotting secret agent.

Outside the network, the new schedule was greeted with puzzlement or disdain. "An abortion," declared one West Coast production executive. "Everybody is disappointed." Said Joel Segal, senior vice president at Ted Bates, a New York advertising firm: "Clearly they are willing to settle for less than strong numbers with a known quantity rather than gamble on an unknown."

In late-night programming, the network was buoyed Wednesday night when Johnny Carson told a cheering studio audience that he would remain beyond Oct. 1--his threatened retirement date--and possibly into 1980. "I feel I owe it to the show and to NBC," he said, and NBC seems prepared to pay whatever it takes to keep him. His contract already brings him at least $2.5 million annually. He's worth it: his ad-packed, low-overhead show accounts for nearly 10% of the network's pretax profits. After 17 years, Carson had said he "found it impossible to keep my energy level and do the kind of quality work I want to do." He denied any differences with Silverman, but he was reportedly piqued by pressure to increase his Tonight appearances, now about three a week.

The good news on Carson was balanced off by a continued slump in the news division. Weekend magazine, critically praised but sparsely watched, was scrapped. ABC's Good Morning, America continues to gain ground on the Today show, which once ate the competition for breakfast. Worse still, two weeks ago, the Nightly News briefly fell into third place in the ratings for the first time ever. The network partly attributed the drop to ABC's rejuvenated news operation. It also admitted that affiliate switches had hurt; in the past two years, NBC has lost ten major local stations to ABC, affecting the ratings for both news and entertainment shows. Nonetheless, there were some hopeful signs: the news budget is up 23% over last year, and Tom Snyder (host of the new magazine Prime Time) and Phil Donahue (with frequent appearances on Today) should bring ratings punch.

As if the network did not have enough to fret about, NBC has been trying since November to clear up a scandal that had been winked at for years, according to some NBC insiders. Under investigation are expense-account fraud and the embezzlement of hundreds of thousands of dollars by some NBC unit managers, who handle logistics for news, sports, and entertainment crews on location. So far 18 of the 55 unit managers, including their autocratic supervisor, Vice President Stephen Weston, have lost their jobs, and one has pleaded guilty to criminal charges.

A fair-sized army of company brass, auditors, accountants, lawyers and Government investigators are still sifting through records of the past five years. Each manager has been grilled individually. To safeguard possible evidence, investigators had Weston's office sealed by a carpenter. When they ordered typeface samples from all the unit managers' typewriters, one manager's machine disappeared after a mysterious 2 a.m. fire in his office.

The unit managers, who carried greenbacks by the briefcase to pay bills for travel, lodging, food and miscellaneous production costs, were not content with garden variety expense-account gamesmanship. They padded payrolls, cashed in unused airline tickets and accepted kickbacks from caterers, hotel managers and equipment salesmen. "Organized dishonesty," Griffiths told stockholders.

One of the first jobs undertaken by Jane Cahill Pfeiffer when she arrived last fall as NBC's new chairman, Silverman's second in command, was to get to the bottom of the scandal. The former IBM vice president has also stepped on toes trying to straighten out the network's tangled management structure. Said one executive: "She has a Mother Superior complex." Chipped in another: "I understand that at IBM they don't fire people, they just reorganize in such a way as to drive someone out. That is exactly what is going on here."

At least one high executive has been fired, others have been transferred to RCA, and more have left on their own steam, usually after their responsibilities were tapered. "When you have a company with as many difficulties as we have had, you have to adjust functions," said Pfeiffer blandly. "Sometimes able people have to paint on smaller canvases." She added: "There will not be a lot of firing in the next several months. But there will be additional key changes."

Pfeiffer answers to Silverman, but it is widely assumed that she has a clear line to RCA Chairman Griffiths. Her main areas of concentration are government relations, legal affairs and employee relations, and she has also been what Silverman calls a "third eye," or a disinterested critic, in prime-time programming. Naturally enough, Silverman has devoted almost all his attention to programming. Says an NBC executive: "Fred is like an eager little boy with a highly developed feeling and sense of how to fix programs, and he couldn't care less about all this monkey business about corporate skill and management."

Perhaps because they are so different, rumors are rife that Jane appalls Fred and Fred appalls Jane. But insiders say the relationship is perfectly correct and functional so far. Says one: "There is no needling or irritation between them. If there were, I'd see it." In a recent interview with TIME's Mary Cronin and Laurence I. Barrett, the NBC executives occasionally finished each other's sentences, like a cozy married couple. Still, in an atmosphere of crisis, the notion persists that one must eventually knife the other.

Griffiths unequivocally denied that he had lost confidence in his top tandem, and told stockholders: "They need your support." Says Silverman: "I don't feel even an unstated deadline." Some industry watchers think that Silverman will have through 1980 to turn things around. But others are not so sure. "I'll take the odds and say he won't be there after the fall," a former NBC vice president told TIME's James Willwerth in Los Angeles.

Silverman is already showing the strain. He has been working and living at a furious pace, and tales of his temper tantrums are common on both coasts. Says a sympathetic West Coast television consultant: "He's like the guy in the porno movie who has to deliver all the time. That's damn near impossible."

But all he really needs this fall is one runaway hit, a Charlie's Angels or a Mork and Mindy. With a smasheroo to help pull up other shows, and with the Moscow Olympics to build on in 1980, NBC could be right back in the thick of things in 18 months. ABC did it in 1976, and its pretax profits' vault would make even "Bottom Line Ed" proud: from $17 million in 1975 to $110 million in 1977.

But if Silverman's magic finally fails him, the mourning in television land will be decidedly restrained. "This is the most unforgiving medium in the history of Western man," says another former NBC vice president. "It makes its own heroes, and then if they don't keep delivering, it murders them."

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