Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, April 15, 1991 TAG: 9104130429
SECTION: EXTRA PAGE: E-6 EDITION: METRO
SOURCE: TOM SHALES
DATELINE: WASHINGTON LENGTH: Medium
What's more, CBS correspondents, even top veterans, are being called in when their contracts come up for renewal and told to take salary cuts of 50 percent or more, or else feel free to leave.
Perhaps it's hard to work up tears for people who were making $300,000 a year in the first place and now must settle for $150,000. But the pay cuts are insulting to seasoned professionals who have spent years working to the greater glory of CBS.
The real crime is that they and other CBS employees, including the hundreds to be fired, are suffering such fates partly because of disastrous decisions made by management, mainly in the form of expensive baseball and basketball contracts that have cost CBS a bundle.
In the last quarter of 1990, CBS estimated a $55 million loss on its baseball deal alone. It's projecting another $115 million in losses this year and all because CBS overpaid for rights to the games. The contracts were approved by Tisch and engineered, sources say, by his right-hand man, Jay Kriegel.
Some inside CBS predict the losses eventually will total a staggering $300 million. Will still more employees be sacked to help foot the bill?
All three networks say cuts like these are part of the new economic realities they face as competition soars and profits plummet. But the fact that the news divisions, especially at CBS and NBC, have had to take such heavy hits is a sign of another kind of change, the attitude that network owners have toward journalism.
In the '50s, '60s and '70s, networks did not operate news divisions for profit. In fact, they almost always lost money. Until "60 Minutes" came along in the late '60s, it was assumed that news productions would fail to break even.
Networks did news because it was part of their social responsibility, part of the price they paid for permission to operate freely along the relatively narrow corridor of the public airwaves. This whole idea of social duty is one that has virtually disappeared at the networks. Hardcore bottom-liners moved in and took over.
The cutbacks have caused tremendous bitterness among network employees. One reason is the suspicion that network owners, especially Tisch at CBS and General Electric at NBC, are paring down the operations not as needed economy measures, but as ploys to make their companies more attractive to potential buyers.
As has been widely reported, Paramount Communications is supposed to be sweet on NBC and Disney is said to be the apple of the CBS eye. One CBS News insider says there is a widespread fear that Tisch is firing people "so that Disney doesn't look bad" when it takes over.
When the CBS stock price hits a certain level, another CBS News source predicts, Tisch will sell the company and make himself another fortune.
Maybe all's fair in love and business. But it used to be that those who ran the networks knew that theirs was not like all other businesses. The news and entertainment that networks deliver to audiences are not mundane commodities like toasters or toilet paper.
The notion of a "broadcaster" who operates on a slightly higher plane is being trashed.
Late last year, CBS Inc. used $2 billion of the $3 billion it had sitting around in the company treasury to buy back 44 percent of its stock from shareholders. Among those profiting mightily on this exchange was major stockholder Loew's Corp., which is controlled by Tisch and his family.
Tisch himself, sources say, may have made more than $100 million on the deal. Yet he is the one now haunting the halls of CBS and chopping off heads with his budgetary axe. No, life isn't supposed to be fair. But this is ridiculous. Washington Post Writers Group
by CNB