As a result of its absorption into the Disney empire, ABC is now a highly diversified corporation with extensive U.S. and international interests in broadcasting and cable. The ABC Broadcasting group consists of ten television and 55 radio stations that are owned and operated by ABC, a television network with 225 affiliate stations, a basic radio network that provides programming for 4,600 affiliate stations, and two specialized radio program services—ESPN Radio and Radio Disney. The ABC Cable Networks group oversees a number of cable networks that are either wholly or partially owned by Disney: ABC Family, A&E Television Networks (which include A&E, Biography, and the History Channel), E! Entertainment Television, ESPN Networks (including ESPN International, which reaches 119 million households outside the United States), Lifetime and Lifetime Movies, the Soap Network, Toon Disney, and the Disney Channel and its international versions (seen in 56 countries). In addition to its own sports and news production, ABC now oversees all network and syndicated television production at Disney.

ABC was the firs-place network at the time of the merger, but its ratings soon began a downward slide. In just two seasons, ABC fell from first to third in the ratings, losing 23 percent of its target 18- to 49-year-old adult viewers, 35 percent of teens, and 45 percent of children ages two to 11. Unable to deliver its promised ratings, ABC has been forced to compensate advertisers with extra airtime, which cuts deeply into network profits. Operating income dropped from $400 million to $100 million in the first two years of Disney ownership, and the network has posted significant losses in subsequent years. Except for the improbable success of 1999–2000, when Who Wants to Be a Millionaire? (aired as many as four times a week) carried the network into first place, ABC’s prime-time ratings have never recovered—in part because the network has failed to use opportunities like the fluke success of Millionaire to develop new hits. As ABC has dropped into fourth place in the ratings, industry analysts have begun talking about the return to a two-network television universe, in which only NBC and CBS are actually capable of winning the race for prime time.

ABC was created by the U.S. government to address the inequities of a very real two-network universe that monopolized commercial broadcasting in the 1930s. Strictly speaking, there were three dominant radio networks in those days, but while one belonged to CBS the other two belonged to a single company, RCA, which operated both NBC-Red and NBC-Blue. RCA’s dominance of the broadcasting industry led to government scrutiny in the late 1930s when the Federal Communications Commission (FCC) investigated the legitimacy of networks—referred to as “chain broadcasting”—that linked together hundreds of local, ostensibly independent stations in national chains commanded by a single owner. The three-year investigation resulted in the 1941 publication of the FCC’s Report on Chain Broadcasting, which assailed RCA’s influence over a majority of high-powered stations and called for the divorcement of the two NBC networks. RCA challenged the decision in court but failed to overturn the FCC’s findings. In October 1943 RCA sold its Blue network for $8 million to Lifesavers candy tycoon Edward J. Noble, and he christened it the American Broadcasting Company.

Unable to match the financial resources of NBC and CBS, ABC could not compete in acquiring programs or attracting affiliates and advertisers. Into this dismal state of affairs relief came as a result of another government intervention into the media industries: the U.S. Supreme Court’s 1948 Paramount decision. Bringing to conclusion government antitrust proceedings against the major studios of the motion picture industry, the decision ended the industry’s vertical integration by requiring the studios to sell their theaters. Along with the other studios, Paramount Pictures was ordered to divest its theater chain and reduce the chain from 1,400 to 650 theaters within five years. In 1951 United Paramount Theaters (UPT), the newly independent theater company led by chairman Leonard Goldenson, offered Edward Noble $25 million for the ABC network.

When the FCC finally approved the merger in 1953, American Broadcasting-Paramount Theaters immediately committed $22 million to develop programming. Instead of competing directly with its rivals, ABC made an unprecedented decision to acquire filmed programs produced in Hollywood. NBC and CBS had a firm grip on TV’s big stars and the major corporate sponsors of its live broadcasts. Besides, ABC had a very specific idea of its target market: the “youthful families” of the postwar baby boom who were able to afford staple products and small items at the supermarket but not necessarily costly big-ticket items like a new car or a major appliance.

ABC gambled first on independent producer Walt Disney by committing $2 million a year over seven years for a Disney television series to debut in October 1954. ABC also spent $500,000 to purchase a 35-percent share of Disney’s ambitious theme park then under construction. With Disney’s name recognition, the television series Disneyland attracted nearly half of ABC’s advertising billings in 1954–55. The series was an immediate hit. The following season, ABC established its most profitable relationship of the 1950s with Warner Bros., whose initial series, Warner Bros. Presents, premiered in 1955 and launched the network’s first hit drama, the western Cheyenne.

In spite of this taste of success, Leonard Goldenson had never been satisfied with Robert Kintner’s leadership as president of the network. In October 1956 Goldenson brought in Oliver Treyz and James Aubrey to replace Kintner, who landed at the more prestigious NBC, where he served as president for another decade. Goldenson himself moved from an office at United Paramount to one at ABC, where he began to oversee the network’s day-to-day operations. (He would remain in the network’s top position until the Capital Cities merger in 1985.)

With Goldenson’s support, Aubrey and Treyz planned for ABC to get big fast, to attract large audiences as quickly as possible in order to establish credibility with advertisers and prospective affiliates. They had no interest in gradually building an audience or in balancing popular hits with prestigious offerings. Without the luxury of time or money for experimentation, their programming philosophy was to exploit proven strengths in an attempt to repeat success. Warner Bros. was happy to oblige. Following the success of Cheyenne, the studio delivered the westerns Maverick, Bronco, Sugarfoot, and Colt .45. In 1958 Warner Bros. introduced 77 Sunset Strip, a private detective series based in Los Angeles that featured an ensemble of young, attractive stars. ABC responded to the popularity of 77 Sunset Strip by ordering three nearly identical series that differed only in their sundrenched locales: Bourbon Street Beat, Hawaiian Eye, and Surfside Six. ABC’s programming strategy became so narrowly focused that, of the 33 series in its 1959–60 schedule, 12 were westerns and seven were crime series.

With the Kennedy-era FCC scrutinizing network television for failing to fulfill its utopian promise—this was the era of FCC chairman Newton Minow’s “vast wasteland” speech—and a Senate subcommittee investigating the influence of TV violence on children, ABC came under attack as the network most responsible for the shift to formulaic action series. ABC faced criticism not only for its own programs—the Warner Bros. series and the equally popular The Untouchables—but for its perceived influence on programming at NBC and CBS. To compete with the hard-charging ABC, the other networks had abandoned the New York–based, live formats of the 1950s and embraced filmed series made in Hollywood. Since both NBC President Robert Kintner and CBS President James Aubrey had supervised programming at ABC in the 1950s, critics argued that the ABC programming philosophy literally had taken over the airwaves.

The public relations crisis alone would have been a challenge for a network seeking greater credibility to go along with its growing audience, but the trouble was magnified by the near-simultaneous collapse of ABC’s ratings. By gambling so heavily on dramas, ABC lacked experience developing situation comedies and was utterly unprepared when public taste swung back toward comedy in the early 1960s. Goldenson fired network chief Oliver Treyz, the architect of ABC’s rapid rise, and replaced him with Tom Moore, but it was too late. Except for a few scattered hits over the coming years (Marcus Welby, M.D., The F.B.I., The Mod Squad), ABC posed no serious competition to NBC and CBS for more than a decade.

Several factors kept ABC from realizing its potential in the 1960s: its dismal ratings, which limited advertising income; the costly transition to color broadcasting, being driven by RCA, which stood to sell color TV sets, and CBS, which could not afford to fall behind; and the steep rise in programming costs. The network showed a net loss every year between 1963 and 1971 (although these losses were offset at the corporate level by income from AB-PT’s theaters, owned-and-operated stations, and other interests).

Given its unrealized potential, ABC was vulnerable to takeover attempts and spent much of the 1960s either fighting off or courting potential suitors. In order to defend against hostile takeovers, Goldenson turned to the International Telephone and Telegraph Corporation (ITT). ITT was a huge conglomerate with interests in international telecommunications, defense and space contracts, publishing, insurance, and car rentals. With nearly 200,000 employees in 52 countries, 60 percent of its revenues from outside the United States, and nearly 10 percent of its shares owned by foreign interests, ITT was one of the first truly transnational conglomerates based in the United States. ITT’s president, Harold S. Geneen, wanted to acquire ABC in order to raise his company’s profile—and therefore its stock price—in the United States, where ITT had only a murky corporate identity. In December 1965 the two companies announced plans for a merger. Over the next two years the FCC and the Justice Department scrutinized the deal in what became for ABC an excruciatingly protracted series of hearings and investigations. After the long delay imposed by the investigations, ITT withdrew its offer on January 1, 1968.

Considering its history in the 1960s, ABC’s resurrection in the 1970s seems nearly miraculous. When Fred Pierce was named ABC president in 1974, he presided over a perennial third-place network that hadn’t turned a profit for most of the past decade, a network that had once set the pace of programming innovation but had grown used to haphazard imitation of its network rivals. Under Pierce’s leadership, however, ABC rode an unprecedented wave of popular success that carried the network from third place to first in just three years. In 1979, 14 of the top 20 programs on television belonged to ABC. With advertisers and affiliates clamoring to ride the bandwagon, ABC’s network profits rocketed upward: $29 million in 1975, $75 million in 1976, $165 million in 1977, and $200 million in 1979. For one year after Pierce assumed his role as president in 1974, Michael Eisner was responsible for ABC’s prime-time schedule. Essentially giving up on the schedule left behind by the network’s most recent program chiefs, Barry Diller and Martin Starger, Eisner and Pierce introduced six series as midseason replacements in January 1975. Amazingly, three became hits: Baretta, S.W.A.T., and Barney Miller. Eisner is also given credit for the decision to transform the moderately successful Happy Days by upgrading Henry Winkler’s character “Fonzie” to the lead role, a decision that eventually made Happy Days the number one series on television.

In spite of Eisner’s accomplishments, Pierce sought a more experienced programmer to take the reins at ABC. In May 1975 he won a pubic relations coup by convincing Fred Silverman to leave CBS, where he had been responsible for scheduling many of that network’s groundbreaking early 1970s comedies, and take over programming at ABC. After being identified with sophisticated character-based comedy at CBS, Silverman aimed ABC’s programming squarely at younger viewers and families: warm family comedy (Eight is Enough, Happy Days), wacky farce (Laverne and Shirley, Three’s Company, Soap), high-concept action (Charlie’s Angels, Six Million Dollar Man), and escapist fantasy (The Love Boat, Fantasy Island).

Sports and news played a central role in ABC’s reemergence during the 1970s, particularly in attracting new affiliates and contributing to the network’s profile as a national institution, and Roone Arledge is the central figure in the history of both. As the producer of ABC’s flagship sports program, Wide World of Sports, and then as president of ABC Sports beginning in 1968, Arledge revolutionized television sports coverage. He made sports competition meaningful for television by creating a narrative framework for sporting events, giving each game a storyline and developing ABC’s trademark “up close and personal” style that brought out the character and personality of an athlete. He was also a showman, unafraid to burnish the spectacle of sports television with multiple camera angles and flashy graphics or to use outlandish personalities, like Howard Cosell, who often overshadowed the sports they covered.

Arledge was largely responsible for creating Monday Night Football in 1970, and it is difficult to exaggerate that program’s importance in the history of television or professional sports. In 1977 Pierce appointed Roone Arledge as president of ABC News. Arledge’s appointment was surprising, since he had no journalistic training, but his impact was profound. As president of ABC News he presided over the creation of World News Tonight in 1978 and Nightline in 1979. Later he introduced the prime-time news series, 20/20 and Primetime, and the Sunday morning program, This Week with David Brinkley. Arledge recruited the on-air talent and behind-the-scenes staff that would make ABC News the most respected news organization in television during the 1980s and early 1990s.

ABC’s most innovative and influential programming achievement in the 1970s was the development of the miniseries. Martin Starger, ABC’s programming chief in the early 1970s, had a hunch that American audiences might be ready for British-style, limitedepisode series and introduced the concept of “novels for television.” The milestone in the miniseries format was ABC’s broadcast of Roots, the powerful adaptation of Alex Haley’s multigenerational saga of an African-American family’s historical journey through slavery. Because miniseries have a clear beginning and end, they do not require weekly installments and lend themselves to innovative forms of scheduling. This was the case with Roots, a 12-hour series that Fred Silverman chose to show in eight consecutive frigid nights in January 1977. In an age of hundred-channel digital cable and TiVo, it is almost impossible to imagine, but 130 million viewers—half the U.S. population—tuned in on the eighth night for the finale of this historical epic.

ABC settled back into the pack during the early 1980s, shortly after Fred Silverman departed for NBC. Under new entertainment president Brandon Stoddard, ABC presented several miniseries that eclipsed its earlier efforts in production cost and running time: The Day After (1983), Winds of War (1983), The Thorn Birds (1983), War and Remembrance (1988). The dominant producer at ABC during the 1980s was Aaron Spelling. He had been responsible for such 1970s hits as Charlie’s Angels and Fantasy Island, but the peak of his influence at ABC came in the 1984–85 season, when his drama Dynasty was the top-rated series on television.

The new era of corporate mergers and acquisitions dawned at ABC when it was acquired by Capital Cities Communications in 1985 for $3.5 billion. Although CEO and chairman Thomas Murphy and president Dan Burke instituted severe cost-cutting measures throughout ABC following the merger, they kept most of the network management in place and allowed the company’s divisions to operate with a considerable degree of autonomy. Murphy and Burke also made farsighted investments in cable networks A&E, the History Channel, Lifetime, and ESPN (which ABC had purchased in 1984).

In 1989 Burke and Murphy unexpectedly chose Robert Iger to succeed Brandon Stoddard as the president of ABC Entertainment. Largely unknown to the creative community in Hollywood because he had come up through ABC Sports, Iger made a strong immediate impression by making series commitments for two of the most radical dramas in television history, both developed by Brandon Stoddard: Twin Peaks, produced by David Lynch and Mark Frost, and the musical police drama Cop Rock, produced by Stephen Bochco. In doing so, Iger sent a message to the Hollywood creative community that ABC was prepared to take risks and grant creative freedom, without the smothering network oversight so typical of television production.

Iger’s four years at the head of ABC Entertainment kicked off the network’s last great period of ratings dominance. Iger inherited thirtysomething and Roseanne from the regime of Brandon Stoddard and added several other series that became long-running hits: Doogie Howser, NYPD Blue, America’s Funniest Home Videos, Home Improvement, and the highly successful Friday night “TGIF” block of family oriented situation comedies, Family Matters, Full House, and Perfect Strangers. In the target market of 18- to 49-year-old adults ABC won the prime-time ratings race three times during Iger’s tenure. When Disney purchased ABC in 1995 it inherited a prime-time schedule that was second in the 18- to 49-year-old demographic and first in total ratings.

Many factors have contributed to the network’s sharp decline in the subsequent years, but Disney’s management strategies must bear a large share of the blame. The demand for synergy has skewed network practices, distorting the most fundamental goals of identifying talented writers, producers, and performers in order to develop programs that appeal to viewers. The goal of supplying ABC with Disney-produced series has been an unmitigated disaster. No Disney series since Home Improvement has survived long enough to make it into syndication, and it debuted before the merger. ABC has alienated many loyal producers by giving favorable attention to Disney. Disney has failed to assure the Hollywood community that it has sorted out the potential conflicts of interest arising from the alliance of a network and a studio. Some producers are reluctant to bring ideas to Disney for fear that the studio will negotiate below-market-value deals to place its programs on ABC. Other producers worry that Dis-ney will evaluate a project based solely on its perceived benefit to ABC. By the same token, rival networks have grown wary of projects that originate at Disney, assuming that any Disney series available on the open market must already have been rejected by ABC. In 1999 Disney tried to solve some of these problems by consolidating the network and studio under the ABC Entertainment Television Group, which formally united Disney’s television production subsidiaries under the management of ABC’s prime-time division. Since that time Disney has regained a bit of credibility by placing Scrubs on NBC, where it appears to be an emerging hit.

ABC’s management of prime time has been equally disastrous, characterized by confusion and an almost ritualistic semiannual sacrifice of programming chiefs. The chaos began when Iger hired (and later fired) Jamie Tarses as head of programming after she had helped to develop comedies such as Friends at NBC. Without a clear leader, ABC showed the worst signs of being programmed by committee, with no clear sense of the network’s identity and every uncertain decision being second guessed. Tarses alienated some of ABC’s most loyal producers, who left the network for production deals elsewhere; Eisner tried to replace Tarses by recruiting Marcy Carsey, the producer of Roseanne and The Cosby Show; Iger made an expensive, two-year commitment to Lois and Clark just before its rat-ings collapsed; Eisner vetoed development deals negotiated by Iger.

Amid the turmoil, ABC failed to develop new series to replace its fading hits of the early 1990s or to capitalize on small successes like Ellen. Even the fleeting success of Who Wants to Be a Millionaire?, which some analysts estimate generated $750 million in revenue during its time on the network, led nowhere. When ABC’s Millionaire-inflated ratings crashed, another programmer, longtime ABC executive Stuart Bloomberg, was fired and replaced by Susan Lyne. Only time will tell how long she survives. ABC finished the 2002–3 season fourth in the coveted 18- to 49-year-old demographic; without the boost provided by the Super Bowl, the ratings would have been worse. Only Monday Night Football and several reality series (The Bachelor, The Bachelorette, Celebrity Mole, and Extreme Makeover) broke into the Nielsen top 30. The average cost of a 30-second spot on ABC is now $50,000 less than its equivalent on NBC.

While prime-time ratings have dropped and the network has floundered, the larger ABC organization has achieved some notable success. The owned-and-operated TV and radio stations are profitable for ABC, as they are for all broadcast networks. Synergy has worked in children’s programming, at least, where Disney series fill ABC’s Saturday morning schedule and promote the entire range of Disney products. These programs are then distributed to the international Disney channels. The most obvious successes are in Disney’s cable television group. While broadcast networks have only a single revenue source—advertising sales— cable networks earn money from advertising and from charging transmission fees to cable and satellite delivery systems, which are passed along to viewers as higher service rates. For the most successful networks, such as Disney’s ESPN, these transmission fees can be raised by as much as 20 percent annually. As a result, ESPN has become the world’s most valuable network, generating more than $500 million per year and establishing a brand name that Disney has successfully exploited by creating additional ESPN cable channels, an ESPN magazine, and ESPN Zone restaurants. Several of ABC’s other cable networks, including the Disney Channel, A&E, and Lifetime (often the most-watched cable network in prime time), have seen steady growth in revenues and profits.

Disney executives will have to make key strategic decisions about how ABC will compete in the world of digital television: how to develop new revenue streams and new digital services; how to use multiple channels and define each channel’s identity; how best to create or acquire programming; and how to redefine the network’s partnership with affiliate stations. With its unrivaled brand identity and a vast library of titles, Disney certainly will play a role in drawing consumers to new digital program services available on cable, satellites, or the Internet. But what role will the ABC network play, especially if it continues along its current path? Disney president Robert Iger believes that a broadcast network has a synergistic value for a diversified media company that far out-weighs its cost.