Even by the standards of the television business, where executives roll on as frequently as the seasons roll by, what's been going on at the National Broadcasting Co. is extraordinary for a $1.2 billion operation.
The firings, hirings and shuffling of desks that have taken place in NBC's upper ranks lately outnumber the feathers in the network's peacock emblem.
Recharged by the shake-up, NBC now talks determinedly about rising from third place in the ratings. But the other two networks aren't about to turn off as NBC turns on. With the start of another television season this month, one of the most competitive struggles in TV history begins. Over the long run the contest holds important meaning for the future of network programming, commercial advertising and the shape of the nation's airwaves.
Since the first of the year, 24 of NBC's top 150 officers have left. Some were scheduled retirements. Many, however, were bumped as part of the most thorough network housecleaning in years.
There's a new chairman and vice chairman, a new president, and new faces overseeing the network's news and sports coverage. The top financial officer has been replaced. So has the head of the stations division. And the critically important entertainment division, where the programs come from, has been reorganized under a new chief.
NBC is gambling on expensive new talent, both in programming and management, to stop its tumble. It is also risking all on the long-term future of commercial television.
Unlike ABC and CBS, which plan to expand production for cable, cassette and other new and increasingly popular forms of television, NBC expects to stay soley with the old form for at least the next 10 years.
"Whatever our competitors may do," said NBC President Fred Silverman in July, "we are not going to dissipate our creative energies by producing software for other media or other technologies. We are broadcasters, and we are going to remain broadcasters."
The floundering network has the most to gain in the current sweepstakes. Nielson ratings for the last regular TV season gave NBC its worst average in more than a decade. And prime-time programs aren't its only poor performers.
NBC's news division is also in a slump. The Today show continues to lose ground to ABC's Good Morning America and, worse still, for the second time this year, the Nightly News briefly fell into third place in the ratings last month. Moreover, Tonight Show host Johnny Carson wants to quit the job he's had for 17 years.
Another harbinger: Critics generally sounded disappointed previewing NBC's fall line-up of shows and predicted the network would retain its tight hold on third place.
Outside, 11 affiliate stations in two years have deserted NBC for other networks, and several more are reported thinking about switching. Inside, NBC remains embroiled in an embezzlement scandal that has links to corporate offices, high and low.
All this bad news predictably has had a depressing effect on profits. The network's earnings slid 20 percent last year and are expected to be down at least as much again this year. That naturally has sent financial shivers up the corporate spine of its parent, the Radio Corp. of America, which long regarded the network as a prodigious profit child.
In 1975, at the beginning of NBC's slide into third place, RCA drew 31 percent of its pretax earnings from the broadcasting subsidiary. By last year, the contribution had fallen below 18 percent. The Hertz rental business, another RCA property, replaced the network as RCA's number one money maker.
The network's misfortunes have placed RCA's prestige on the line as well. 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).
Even so, RCA has yet to panic. It was able last year to absorb the network's slack and showed a respectable 13 percent return overall. Besides, the network still earns lots of money -- $122 million in 1978. The TV business is so profitable, thanks to rising ad rates, that even a last-place network can end up relatively rich.
"NBC hasn't been a disaster," said one vesteran critic of the industry, himself a former producer. "It's just been a comparative disaster."
The network did try to pare costs two years ago. Under the watchful eye of RCA President Edgar Griffiths -- known around headquarters as "Bottom Line Ed" -- NBC let go of 260 employes in a companywide purge. Though a small number in relation to the network's total 6,500 payroll, the firings punctured morale and worsened an already deteriorating situation.
So Griffiths reversed field. With as much cash as it would take, he set out to woo Fred Silverman from ABC. Silverman's reputation for genius and magic in TV programming was legendary. It took a promise of $1 million a year before Silverman, 42, joined NBC as president and chief executive last June.
Silverman promptly launched a crash program development effort costing a small fortune -- roughly $50 million, up from $36 million the year before. He also fattened the news budget 23 percent.
Silverman's own salary caused somewhat of a stir in the industry, but as one Wall Street analyst noted, the fee was still two or three times less than NBC was rumored to be paying Carson.
In October, Jane Cahill Pfeiffer came on board as network chairman -- at $225,000 a year, plus up to $200,000 in bonuses. Trained at IBM and polished as a top-drawer consultant to several major companies including NBC, Pfeiffer, 46, had made a name as a smart, confident and moral manager and an expert administrator.
Together, the Fred and Jane show had the potential to play well at the network. He would concentrate on programming, she on process.
The relationship also had the potential of exploding. Their personalities seemed mismatched. Silverman is intense and direct, his views about his medium terribly practical. Pfeiffer is formal and controlled, her whole approach strait-laced (she was schooled, briefly in a convent), and she is idealistic about TV.
By most accounts, however, the relationship so far has been correct and functional -- even downright friendly, say the two of them. Both have demonstrated an appetite for hard work and toughness on the job.
One important achievement: They have managed to shred much of NBC's old bureaucratic style, perhaps the most debilitating feature of past NBC management.
For years, NBC seemed to express an essentially faceless committee of company elders who were insulated by advisers. Sensitive to being in the shadow of mighty RCA, and perhaps out of a sense of self-defense, the network built layers of bureaucracy within its ranks. Management by committee resulted. The network suffered from sluggish decision making, or none at all.
"It was like dealing with the Pentagon," said Dennis Leibowitz, a broadcasting analyst with Donaldson, Lufkin and Jenrette in New York.
"we aren't like that anymore," said Mike Weinblatt, president of NBC's entertainment division. "You can get programming decisions in a hurry now from two people, Fred or me."
Weinblatt, who has been with NBC 22 years, gave two reasons for the network's fall to third place: "we were a sleeping giant" when ABC shot to the top of the ratings list with a schedule of youth-oriented shows in 1974, and "we were guilty of many human mistakes."
Trying belatedly to catch up, NBC went after the youth market, and only succeeded at alienating its traditional older audience. Subsequently, the network tried to score quick fixes with movies, miniseries and other expensive specials that ended up sacrificing stable ratings.
Silverman also stubbed his toe at first. Soon after taking over in June 1978, he scrubbed the new midseason shows scheduled by his predecessors and introduced those of his own choosing in what was the most sweeping schedule revision of its kind.
It flopped. Silverman concedes he moved too fast. A sense of caution and conservatism has since set in. The strategy is to keep shows on the air, build audiences, improve slowly, wait for mistakes by other networks. "We're looking for the little edges," said Weinblatt.
Critics were surprised by the lack of surprise in NBC's fall line-up. Five of last year's 15 midseason entries will be back, higher-than-normal survival rate not justified by last year's ratings. The network's strategy here, rather, is to restore some stability to the schedule.
Stressing the link to the past, NBC is also bringing back its peacock emblem with the new slogan, "Proud as a Peacock." The emblem had been retired in 1975 when the network opted for a more stylistic insignia.
Another fact the critics found disappointing: Among the six new shows NBC will introduce, there are no situation comedies of the type that have done so well for ABC and CBS. NBC says it has three or four in the planning stage. At the same time, NBC officials say they envision a distinct image for their network, more upscale and sophisticated than the competition.
One change that did please industry observers: fewer long-form programs and more time devoted to regular series.
No one really expects NBC to budge from last place this season. The network's own officers say they would be happy simply with some signs of improvement, anything to give momentum.
With exclusive broadcast rights to next summer's Olympics, the network expects to be in good position to push its 1980 shows. It also plans to use coverage of primary elections and political conventions to promote future schedules.
It has fallen to Pfeiffer, in the meantime, to strengthen the network's sagging news division. She has raided CBS News, traditionally the best in the business, for two of its finest -- Richard Salant and William Small. Both men have big dreams for their new assignments.
Pfeiffer also has been trying to clean up a unit manager scandal that broke about the time she arrived. Unit managers accompany production crews and reporters on assignment, smoothing their way by hiring help, securing equipment and doing whatever is necessary to get a job done. As such, they often handle lots of cash.
The network was tipped last winter that not all the money was being used legitimately. Investigations soon revealed a general laissez-faire attitude toward expense accounts and wide-spread abuses by unit managers, including kickbacks from vendors and use of funds for personal expenses.
NBC discovered it had footed the bill for, among other items, gifts of jade, oriental carpets and gold coins. There were also reports of invoices for parties never given and supplies never bought.
U.S. prosecutors have been called in. At least half of the 60 or so unit managers have been fired or quit, and two reportedly have pleaded guilty.
The network declines to comment on the matter. It has retained Price Waterhouse & Co. to review accounting procedures and controls. Unit managers have been renamed "production administrators," and the jobs are now going to people trained in business and finance.
The scandal has been felt throughout the network. All budgets have come under tighter control. "We're being forced to go back and examine everything in more detail," said one executive.
Looking to the near future, the question, say analysts, is not whether NBC will dramatically pass CBS, which it has long trailed. The question is whether NBC can stop the erosion.
The general view is that NBC's worst times are behind it. Even should NBC do poorly in the ratings this year, most analysts nevertheless predict some improvement in earnings as network development costs come back into line. But full recovery is expected to be a long time coming.
The network's 218 affiliates appear willing to stay for now. In fact, clearance and coverage rates are up over last year, indicating greater confidence by affiliates. But they expect to see results soon.
As for the defections so far, NBC officials insist they haven't been hurt too badly. "We are still represented in every market we were," said Robert Mulholland, president of the network division, though in some markets NBC has had to settle for weaker affiliates.
Not anxious to lose any more, NBC has been offering some affiliates higher compensation rates (what the networks pay stations to carry their shows) and more station breaks to keep them on board. It also touts the Olympics.
"If a station decided to turn around now, the first they'd be facing against us is the Olympics," said Mulholland.
RCA, too, appears content to wait out NBC's revival attempt. The conglomerate's planned $1.35 billion acquisition of CIT Financial is expected to provide steady enough income in the long run to sustain NBC and support technological developments.
It will not be enough, though, for NBC to do well. Its competitors must make mistakes. As Russ Leavitt, an analyst with Smith Barney in New York, said, "I think they probably need some luck."