That loud thud heard in midtown Manhattan recently can be traced to the offices of ABC Sports, where Dennis Swanson just arrived in a cost-cutting, streamlining state of mind. The new ABC Sports president is on a mission to return the division to preeminence and profit, not necessarily in that order.
Swanson, president of ABC's owned-stations division the past year, has one overwhelming priority: to restore ABC Sports' financial house, primarily by getting a grip on the rising costs of rights fees.
"I'm going into this with my eyes open. I know that there's serious financial problems. We're not going to get out of the situation we're in quickly," Swanson, 47, said this week from New York. "But I'm an optimist. We've got to figure out how to make it come out on the bottom line. Right now, 82 cents out of every dollar we spend is going toward rights fees ."
Numerous reports put ABC Sports' 1985 losses at about $40 million. The network struggled in the ratings with three of its most important packages -- major league baseball, college football and Wide World of Sports.
Essentially, ABC Sports has been a day late in realizing it is at least a dollar short in terms of rights fees. NBC, and especially CBS, have made well-publicized efforts recently to halt the spiraling increases, and ABC, since its merger with Capital Cities Communications, appears headed for a get-tough approach, too. (Footnote: It is curious that NBC and CBS were the first to turn austere, considering that their newly aggressive approach in recent years in an effort to challenge ABC helped fuel the escalation of rights fees.)
As part of its reevaluation of rights fees, ABC recently chose not to renew its option on the football Gator Bowl. Like CBS recently dropping horse racing's Belmont Stakes, it's indicative of network sports' new math.
Swanson comes to his new position with a reputation as a cost-cutting administrator proficient in maximizing profits. Many ABC Sports employes sense there could be a major overhaul beyond rights fee considerations, including changes in on-air talent and production costs.
"I don't see the sense or logic of overturning the apple cart," Swanson said.
Still, although your picture at home should remain pretty much the same when it's tuned to ABC Sports, unquestionably we are witnessing a changing of the guard.
Three of the major players in ABC Sports' remarkable success over the past generation -- Roone Arledge, Jim Spence and Howard Cosell -- have stepped aside in recent weeks. Arledge, 54, ABC Sports president for 18 years, will concentrate on his position as head of ABC News although he will continue to oversee the sports division as group president. Spence, 49, senior vice president at ABC Sports since 1978, resigned after he was passed over in favor of Swanson. And Cosell, 67, the most visible element of ABC Sports' dominance, severed his commitments to the network at the end of 1985.
"I'm not going to try and out-Roone Roone. That would be foolish," said Swanson, who was a sportscaster at NBC-owned WMAQ-TV in Chicago in the late 1960s before turning to news management.
ABC Sports' dilemma is a ticklish one. For starters, its long-term contracts with many of its televised events prevent a quick solution to the rights fees problem. And with the emergence of NBC and CBS as aggressive pursuers of sports properties, ABC finds itself caught between trying to maintain its lofty position in the field and trying to take a more restrained financial approach.
"I think you may see more program development. I think you may see more direct corporate sponsorship (such as ABC's Budweiser boxing series)," said Irwin Weiner, vice president in charge of administration for ABC News and Sports. "I think we have to be as creative in the sports area as Roone has been in the news area. But it is imperative that we make deals that are going to bring profit to the company. It's that simple. I think every negotiation we do now will become critical."
Most critical and immediate are ABC's negotiations with the National Football League. The three networks' current agreement with the NFL expires after the 1986 season. "The first major thing we have to confront is our pro football situation," Swanson said. "We're not looking at a healthy situation."
Despite a ratings upswing, "Monday Night Football" lost money this past season, although Swanson declines to say how much. Swanson said "the extreme position" would be for ABC to consider giving up the Monday night games. He also said the network is looking into the option of getting into Sunday afternoon NFL games.
As one ABC source indicated, another fear among its people is that production costs will be affected. In recent years, ABC has made some reductions, and with the bottom line now getting top-of-the-line treatment, more production cuts could be forthcoming. But Swanson said, "I don't want to see us limit our ability to present events in a quality fashion."