News They Can't Use

By Josh Tyrangiel With Reporting by Jess Cagle and Jeffrey Ressner/Los Angeles, Benjamin Nugent and Heather Won Tesoriero/New York

No one knows how to torture a television executive quite like David Letterman. At NBC his bosses were "pinheads"; at CBS he has saluted his current boss, network president Les Moonves, with embarrassing footage from Moonves' days as an actor. But Letterman's most recent bit of mischief--threatening to leave CBS, his late-night home of the past eight years, for rival ABC--deserves a lifetime-achievement award: He has managed to make executives at both networks miserable.

Letterman's latest contract talks with CBS have been so fractious that, according to a source involved with the talks, the normally smooth and polished Moonves at one point barked, "Fine. Let him go!" He also exclaimed, "I've never had a more difficult negotiation in my entire life." Meanwhile, ABC, sensing an opportunity, was seriously wooing Letterman, promising the 11:30 p.m. time slot. Trouble is, that slot is already occupied by Nightline. And nobody told host Ted Koppel of the discussions until shortly before the New York Times called him for comment. He held back until an anonymous executive was quoted as saying "the relevancy of Nightline just is not there anymore." Then, in a typically sanguine response, published in the Times last week, Koppel insisted that he did not mind ABC's negotiating with Letterman. "But I have one complaint," he wrote. "And that is about the anonymous suggestion...that Nightline has lost its relevance...It is, at best, inappropriate and, at worst, malicious to describe what my colleagues and I are doing as lacking relevance."

ABC News is known as a place of lively intramural rivalries and intrigue (Barbara and Diane? They just love each other!), but almost everyone scrambled to rally around Koppel. Walters condemned her corporate overlords from her perch on The View, and Sam Donaldson asked listeners of his radio show to contact ABC in support of Nightline. Diane Sawyer said nothing but backed out of a planned appearance on Letterman's show. You can call journalists sensational or intrusive--their weirdly tuned ears just hear "Keep up the good work!"--but "irrelevant" is a shot to the heart, and Disney chairman and CEO Michael Eisner and president and C0O Robert Iger both know it.

"The comment about [Nightline's] relevance was unfortunate and inaccurate," Iger told TIME. But that doesn't change ABC's plan. "The company has made it very clear," says a top network executive, "that if Letterman wants to move to ABC, we would be willing to have him in the 11:30 time period. That's been made known to the news division."

If ABC lands Letterman, it will provide the network--whose prime-time lineup had fewer viewers than the WB's one night last week--with a much needed infusion of buzz. What Letterman wants is to beat Jay Leno's Tonight Show in the ratings again before he retires, and he feels that CBS and its parent, Viacom, have failed to promote Late Show to 18- to 34-year-olds and to provide suitably hip and well-watched programs to lead into his show. "When Dave watches NBC," says a source close to Letterman, "he sees beautiful promotions saying repeatedly 'Tonight on Jay...then on Conan...' It runs like clockwork, and CBS just doesn't do it." CBS executives answer that it would help if Letterman would make more of a personal effort at promotion, like actually taping a new CBS promo, something they say he has not done for some time.

ABC is offering a promotional blizzard on its ESPN networks and upcoming NBA basketball telecasts. CBS is countering with promises of promotion across the whole Viacom spectrum, including its NFL football and NCAA basketball telecasts and MTV. CBS argues that it has made inroads with the 18-to-34 age group and is in a better position to reach a mass audience than ABC, which trails CBS and NBC in overall ratings. Both networks are offering Letterman about $31 million a year; CBS is also reportedly paying his company at least $40 million a year for license rights to the show.

Letterman, who spent the week vacationing at his hilltop retreat on the Caribbean island of St. Bart's, has reportedly made some demands that sources inside ABC and CBS say they are unwilling to meet, notably a guarantee that his company will continue to produce whatever show fills his time slot for as long as a decade after he leaves it. But what Letterman seems to want most is respect and some coddling. "The entire history between Dave and CBS is negative. From Day One, they never treated him importantly," a former Letterman associate says. "He needs people to talk to him, and Les went the other way and ignored him. I'll give you an example of stupid CBS tricks. Dave's people used to try to get a company plane to take him to St. Bart's. He's their No. 1 guy, but getting the plane was like pulling teeth. You'd think they'd take him down whenever he wanted to go." On the other hand, Letterman is said to worry about the appearance of job hopping. "By trying all three networks, won't he appear too mercenary, too insatiable or just too weird?" asks a Late Show staffer. "Believe me, David thinks about these things constantly."

If Letterman stays at CBS, is Nightline marked for extinction anyway? Iger told Koppel in a meeting last week that Nightline is safe if the Letterman bid fails or ABC can't land another A-list entertainment show, but few people within ABC News believe that. Trust between the news division and the bosses at ABC/Disney is at an all-time low--and there is no shortage of previous lows. All the major TV news organizations--ABC, NBC, CBS, Fox and CNN--are owned by huge corporations for which news is not the primary product. But the marriage between Disney, an entertainment company, and ABC News, once considered the top network-news outfit, has been particularly bumpy. In 1997 Good Morning America did a series of jingoistic broadcasts from Orlando trumpeting Disney World's 25th anniversary; Washington Post media reporter Howard Kurtz compared the program to an infomercial. The next year Disney killed an embarrassing ABC news story on hiring practices at Disney World. Both incidents enraged members of the news department.

But nothing can compare with the insulting treatment of Koppel, a broadcast-news aristocrat. He has worked at ABC for 39 years, collecting 37 Emmy awards. He built Nightline into a paragon of television journalism and the news division's signature program. "What's frustrating," says an ABC producer, "is that Nightline beats Letterman in the ratings, has beaten him every night since this came out. The show is doing well, and it's frustrating to have to defend it."

Ratings aren't everything, however. Nightline's demographics have aged into Matlock territory, and annual profits have declined from a reported $30 million in 1997 to $13 million last year. (Letterman's show brings in an estimated $25 million in annual profits.) ABC corporate executives also grumble that Koppel makes $8 million a year and is contractually obligated to work just three nights a week.

Though it hurts ABC News staff members to hear it, especially from the lips of a powerful and secretive (or at least anonymous) network executive, Nightline does have a relevance problem. Television has changed significantly since the show debuted during the Iranian hostage crisis 22 years ago. Cable news provides a 24-hour outlet for wonky debate, and the Internet brings headlines home in something akin to real time. Koppel and his producers have wisely adjusted the show's format, shifting from headline news to more in-depth, prerecorded pieces. "The result has been a set of brilliant programs," raves Iger.

But as sacred as Nightline is to news junkies and journalists, the ABC News folks know which way the wind is blowing. They aren't naive, just depressed. "I believe in the capitalist system," says Sam Donaldson, whose future as the host of This Week is up in the air after the retirement announcement of his co-anchor, Cokie Roberts. (According to press reports, ABC is grooming a replacement team of Claire Shipman and George Stephanopoulos.) "We are owned by a company that wants to make money, and I believe that the people who run these companies have to try to do that." But Donaldson thinks subbing Late Show for Nightline would cause a ripple effect. "If the news department is seen as being less serious about the news, it could affect the advertising dollar throughout the news department."

One of the people it might affect, although not necessarily adversely, is ABC World News Tonight anchor Peter Jennings. If Koppel departs, Jennings, as one of ABC's last superpower anchors, could have serious leverage when his contract expires this summer. Industry estimates place his salary at about $10 million a year. ABC could not afford to lose both him and Koppel. In his first statement since being cuckolded by his entertainment-division bosses, ABC News president David Westin declared, "We have every hope, expectation and wish that Peter Jennings will be the principal anchor at ABC for years to come."

While its current melodrama gets the headlines, ABC News shares the same fate as its rival news divisions. All are expected to perform alchemy--to increase market share while cutting the budget and, oh yeah, delivering the news in a lively, interesting and accurate manner. Iger insists that he and Eisner give ABC News their full support. "We cheer them on," says Iger, "on a regular basis. We're constant and avid viewers. We oftentimes suggest things that are attempts to help news grow versus contract: we've urged on many occasions for more programming...so I take exception to any notion that there's a lack of support." The proof may well be in the time slot.

--With reporting by Jess Cagle and Jeffrey Ressner/Los Angeles, Benjamin Nugent and Heather Won Tesoriero/New York