Premature Obit   

The nightly newscast, indeed network news itself, is on the way out: That was the tenor of much of the coverage of the Letterman-Koppel brouhaha. Here’s why that conclusion is so wrong.

You would have thought the sky was falling.

ABC's efforts to woo David Letterman, and its ham-handed treatment of Ted Koppel and "Nightline," sparked outrage, shock and near bereavement among journalists. The editorial sages agreed: This was more than just a third-place network jockeying to improve its late-night profits--it was the death rattle for network news. Within days, epitaphs were being written.

The networks' supper-hour newscasts were "going the way that afternoon newspapers went, which is to say, going," Wall Street analyst Tom Wolzien of Sanford Bernstein Co. told the New York Times, a sentiment later echoed by Times op-ed columnist Frank Rich.

Former Timesman Alex Jones, now of Harvard's Joan Shorenstein Center on the Press, Politics and Public Policy, gloomily told USA Today, "If they will do this to Ted Koppel and 'Nightline,' they will certainly do it to Peter Jennings. And other networks will probably do it to their news operations without much concern--or at least they'll say, 'Oh, we'll take a little heat and then be done with it.' "

There was, of course, a certain superficial logic to all the hand-wringing. The litany was cited and recited: The audience for Jennings, Brokaw and Rather is aging and shrinking; cable networks provide 24-hour competition; costs are too high; young people don't care about news, nor do the giant entertainment corporations that control the networks.

All of which probably illustrates how journalists can lose their perspective when the news is about the news business. Chalk it up to heat-of-the-moment passions or an instinctive anticorporate bias, but few instances of pack journalism seem as woolly-headed as this one. The news-is-dead school is dead wrong.

Network news certainly has its share of problems, but none of them suggests the patient is terminal. Far from it. In the aftermath of the Koppel Affair, there's a stronger case for the exact opposite conclusion about broadcast news: It's one of the few kinds of programming that still works for the networks and their corporate overlords. "The business of [network] news remains fundamentally sound," says Koppel's boss, David Westin, the president of ABC News. He adds, "As long as there's a TV network, there will be a news division, and it will have to be a strong one."

As Koppel himself pointed out in the middle of the battle, it's an odd time for anyone to be questioning the value or "relevance" of "Nightline," or of network news in general. The events of September 11 and their aftermath have inspired some of the networks' finest moments. That much of America saw the events of that terrible morning unfold on ABC, CBS and NBC, that the three networks' feeds appeared all over cable on that day and for days afterward, says plenty about their relevance and value.

And months after the immediate crisis has passed, the Big Three's flagship news broadcasts are enjoying a mini-revival. Since September 11, they have collectively averaged 31.6 million viewers--per night. That's nearly 4 million more than were watching them last year at this time. Try it another way: Those added viewers alone constitute more than the entire audience watching CNN, Fox News Channel and MSNBC during an average hour of prime time. Try it still another way: 31.6 million viewers is more than any regular TV program of any kind attracts (TV's highest rated series, "Friends," is averaging 24.5 million viewers per week this season). "There are very few programs left on television that can consistently bring in as large an audience, night after night, as the [network] news can," says NBC News President Neal Shapiro.

Yes, many of those viewers are likely to go back to watching "Wheel of Fortune" when the news calms down. And, yes, it's true that the nightly news has been losing viewers for as long as Rather, Jennings and Brokaw have been in their anchor chairs, which is a long time indeed. But then, all kinds of network programs--sports, sitcoms, soap operas, children's shows--have been shedding viewers, as the number of available viewing choices has expanded dramatically. Relatively speaking, the network news has done a better job of retaining viewers than other kinds of programs the networks carry.

Consider some more numbers: Since the 1991-92 season, the collective rating for Jennings, Brokaw and Rather has fallen 17.5 percent. The audience erosion for the networks' prime time entertainment shows over the same period was greater, 21 percent, and that's including the shares of newcomer mini-networks WB, UPN and Fox. NBA games? They're off nearly 33 percent over that time. Regular-season NFL games? Down 18.3 percent overall.

Significantly, all three networks earn a profit on their news operations. Sports, by contrast, has been a disaster. Morgan Stanley estimates that the Big Three networks plus Fox will lose $619 million on their sports divisions this year, losses that will likely drag Fox's and ABC's network operations into the red. Meanwhile, the costs of carrying hit entertainment shows like "Friends" and "Frasier" continue to rise far faster than the networks' news costs. Yet no one has seriously predicted that NBC, CBS and ABC will soon stop broadcasting sitcoms or ball games.

Yet even if the networks lost money on the nightly newscasts, there would still be plenty of compelling reasons for keeping them around. The first is the nightly news' inseparable link to the rest of the network schedule. The reporters, producers and camera people that put "World News Tonight" and "The CBS Evening News" on the air each night also produce the networks' highly lucrative morning shows, such as "Good Morning, America," and prime time magazine programs like "60 Minutes" and "Dateline." These programs perform solidly in the ratings, earn millions for their parent companies, and can be produced relatively cheaply. They are, in a word, "franchises" not unlike a hit drama or reality program.

What's more, the network news is an irreplaceable part of the larger ecology of television. Hundreds of local stations affiliated with the networks rely on the networks to supply them with the "Today" show, "20/20," the Sunday morning talk shows and other news programming. It's doubtful that viewers in Des Moines or Denver or even Washington, D.C., would ever learn much about national or international events from their local ABC stations if ABC News didn't provide them with taped packages and live reports.

"Local stations have really only one profit center--the local news department," says Al Primo, who created the widely syndicated Eyewitness News format more than three decades ago. "These stations need the network news divisions for national and international content."

The conglomerates need their news divisions, too. Despite Disney's alleged heartlessness toward Koppel, the conglomeratization of the news seems to have as many benefits to journalists as drawbacks. Disney, General Electric (NBC's owner) and Viacom (CBS' owner) recognize that their news divisions provide them with intangibles like a public-relations halo in Washington--which means they tamper with the news at their own peril. Dumping news altogether would make the PR disaster of the "Nightline" affair seem like small potatoes.

In addition, the very bigness of these corporations may help insulate the news divisions from financial downturns. Here's a paradox: Despite ballooning war-coverage costs and a severe advertising recession, there have been few cutbacks at ABC, CBS and NBC in the past year. Why? Perhaps because the networks are part of diversified media corporations that can share expenses and generate additional revenues with little extra effort.

NBC News now spreads its costs over three allied networks (NBC, CNBC and MSNBC). NBC's rivals are learning to play this game, too. CBS News recently began coproducing "BET Nightly News" on the BET cable channel, which, like CBS, is owned by Viacom. CBS also is looking to produce news for another Viacom network, UPN, and has had joint productions with Viacom's MTV and VH-1 networks. ABC News has "repurposed" some of its best work, such as its series on Johns Hopkins Medical Center, selling it as a 10-part series to the Discovery Health network.

The conglomerates also seem to understand something about the value of brand names. NBC ponied up an unheard-of $65 million to keep Katie Couric precisely because the perky host so embodies its morning franchise, "Today." After more than 60 combined years as network anchormen, "Tom," "Dan" and "Peter" are among the most famous one-name brands on TV, each inseparable from the network he works for, and far better known than anyone on cable. The anchors are so closely associated with their networks that many wonder whether their successors (Rather is 70, Jennings 64, Brokaw 62) will command anywhere near the same level of gravitas and drawing power.

"Dan and Tom and Peter are unique in experience and symbolic value to us," says CBS News President Andrew Heyward. "There are plenty of other skilled people in the field, but the next generation will take some time to earn its rightful place."

News, acknowledges ABC's Westin, will "never be a big growth engine. It's just not big enough to be that in companies as large as Disney or Viacom or GE. It will never get 20 percent a year earnings growth and capture the imagination the way MTV or ESPN will. On the other hand, you'll never go bust with it, either. You won't have peaks and valleys, as you do in entertainment."

The end-with-a-whimper denouement of the "Nightline" story in early April probably reveals best of all how gaseous the commentary surrounding it truly was. Koppel's demand for "a clear and unmistakable symbol" of support from Disney was met with a new guarantee for the program, reportedly a two-year commitment to carry it in its familiar timeslot. Disney went away happy, and so did Koppel, saying he was gratified to have "questions of the future of the broadcast so warmly and enthusiastically resolved at the highest levels of the corporation."

So if there really were no dire portents in the Koppel-Letterman flap, what was it really all about? Heyward says it was less about the future of news than about the narrow dynamics of late-night TV. "Late-night is when young viewers are more available," which is why Disney sought an entertainment show to appeal to them at that hour, he says. "There are plenty of other time periods where news thrives and survives."

ABC couldn't lose, no matter which way its pursuit of Letterman turned out, says Andrew Tyndall, who's been following the networks' news divisions in his newsletter, The Tyndall Report, since the late 1980s. Had it succeeded in luring Letterman, ABC would have wound up with a highly profitable one-hour late-night entertainment program, he says. Despite stepping on Koppel's toes, Tyndall believes ABC succeeded in sending a message to its high-priced news talent: There are alternatives to paying anchormen $8 million per year. "It was a shot over the bow of these people and their agents," says Tyndall. "They are chipping away at the house that [former ABC News President] Roone [Arledge] built in the '80s and '90s with high-priced superstars. Yes, ABC will still be in the news business. But the question is, at what price?"

And where would Ted Koppel be if ABC had dumped him from his late-night perch for David Letterman? Koppel was insistent that "Nightline" not become a prime time show, lest its serious tone be watered down in the pursuit of giant Nielsen ratings. Nor was Koppel likely to be happy on one of the cable news networks, what with their tiny audiences. Tyndall thinks Koppel might have wound up instead on CBS, which would have coveted "Nightline" to fill a gaping hole at 11:30 each weeknight.

If so, that would have preserved the status quo. It's hard to see how that would be a net loss for the networks' news divisions--or for the people who watch them.