Economy, industry changes drive ABC Studios move



ABC executive Stephen McPherson talks with a reporter before participating in a panel discussion at a meeting of the Hollywood Radio and Television Society in Beverlyy Hills, Calif. Reed Saxon, The Associated Press

By Lynn Elber

LOS ANGELES – ABC Entertainment President Stephen McPherson is taking charge of ABC Studios in a corporate reorganization intended to meet industry changes and a bleak economy, the Disney-owned TV division announced Thursday.

Besides his current programming duties for ABC, McPherson will oversee ABC Studios’ production of shows.

ABC Entertainment and ABC Studios will operate as ABC Entertainment Group, a newly formed business unit of Disney-ABC Television Group headed by McPherson, said Anne Sweeney, co-chairwoman of Disney-Media Networks and president of the Disney-ABC TV group.

She said the move is intended to “streamline the creative process” in an entertainment industry that’s being reshaped by digital technology and facing the worst economy in decades.

ABC’s parent, Walt Disney Co., always has been known for “continuing to evolve our business,” she said.

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“We really do believe it’s going to present a cohesive and unified structure” that will efficiently create the best programming for ABC, she said. The changes are effective immediately.

Although some operational details remain to be worked out, Sweeney said the goal was to put the reorganization into place as the network decides on its shows for the 2009-10 season.

She lauded McPherson’s passion for creating programs as well as his business acumen.

Named ABC entertainment president in 2004, McPherson previously headed the studio when it was called Touchstone Television. He developed series including the ABC hits “Desperate Housewives,” ”Grey’s Anatomy” and “Lost.”

“The hallmark for the Walt Disney Co. is great content, and this is a way to focus even more on great content creation and to build on our success,” McPherson said. (The studio makes shows for non-Disney outlets.)

ABC Studios President Mark Pedowitz has been named senior adviser to Sweeney, handling issues including business, labor relations and new media. In his four years as studio head, Pedowitz oversaw development of ABC series and cable shows including ABC Family’s “Kyle XY” and Lifetime’s “Army Wives.”

Pedowitz, who was involved in the deal to sell ABC shows through Apple Inc.’s iTunes service, will play a critical role in analyzing the platforms available to distribute programming in the altered entertainment landscape, Sweeney said.

Such a reorganization is to be expected in an industry rocked by the sour economy, said analyst Larry Gerbrandt of Media Valuation Partners. Disney’s cost-cutting move will mean layoffs along with a reduction in overhead, he said.

The advertising-supported market that drives $70 billion of cable, broadcast and network TV business is in for its toughest year ever, Gerbrandt said, and more corporate cutbacks are likely, barring an economic turnaround.