Mighty Mouse double whammy

Touchstone revival bolsters ABC and parent conglom

Walt Disney’s bottom line is about to get a lot brighter, thanks to a little-noticed Lazarus act staged by Touchstone Television.

While sister net ABC gets tons of ink for its well-documented turnaround, not much attention has been paid to the fact that the main building blocks of the net’s comeback — “Desperate Housewives,” “Lost” and “Grey’s Anatomy” — all hail from Disney-owned Touchstone.

What’s more, the studio — under former boss Steve McPherson and current prexy Mark Pedowitz — has re-established itself as a credible supplier to non-Disney networks. CBS’s two biggest frosh hits this season — “Criminal Minds” and “Ghost Whisperer” — are both co-produced by Touchstone, as is the Eye’s much-hyped midseason Jenna Elfman laffer “Courting Alex.”

Combine the ABC smashes with its hits on other nets and Touchstone-produced programming will generate well over $1 billion in revenue for Disney over the next few years.

“Between Steve and Mark, they’ve put Touchstone on the map as one of the major players in town,” says ICM’s Nancy Josephson. “They went out of their way to make a model where they could be in business everywhere.”

Not bad for a studio that was basically stabbed in the heart and left for dead barely six years ago.

In 1999, then-Disney topper Michael Eisner made the controversial choice to shut down Touchstone as a separate unit of the Mouse House and make it a part of ABC. The restructuring, and the concurrent decision to bail out of a commitment to produce “CSI” for CBS, basically sent the message that Touchstone was out of the business of producing for anyone other than ABC.

“It was a miserable time,” concedes Julia Franz, who’s now exec VP of creative affairs for the studio. “It was difficult because I’m not sure they thought it through before they put the plan into motion. It all worked out in the end … but it was tricky.”

“A lot of it made a ton of sense and was ahead of its time, (but) much of the way it was executed was very difficult to overcome,” says McPherson, who now runs ABC Entertainment.

Pedowitz notes rival congloms like NBC Universal and CBS Corp. now both have studios that exist chiefly to service the needs of their respective broadcast nets. And while giving up “CSI” denied Disney hundreds of millions of dollars in backend profits, the positive benefits of the merger have been plenty.

Even during ABC’s darkest hours, a McPherson-led Touchstone still managed to supply ABC with a trio of shows — “According to Jim,” “My Wife and Kids” and “Alias” — that are expected to collectively pull in a cool $1 billion in off-net revenue for Disney.

Now, with ABC clicking, Touchstone stands to rake in another eight-figure haul once “Housewives,” “Lost” and “Grey’s” make their way to cable and broadcast syndication over the next three or four years.

By owning its hits, Disney is in a much better situation that past Nielsen champs. NBC, for example, watched helplessly as its “Must-See TV” hits of the 1990s (“Friends,” “Seinfeld,” “ER”) earned billions for Time Warner and Sony.

The tricky part for Touchstone execs remains figuring out a way to keep the doors open to all networks even as ABC remains a priority.

“Being in business with other places is, in the long term, good for Touchstone and good for ABC,” Pedowitz says. “Our primary goal is to make sure ABC is serviced. But it’s also a primary goal to make sure (writing) talent knows that ideas that don’t fit at ABC can happen elsewhere.”

Indeed, Disney-ABC Television Group prexy Anne Sweeney says it’s “essential” to her that Touchstone “maintains a separate and strong identity as a television production studio.” Figuring out what other networks are about and what their individual needs are is key, Sweeney says.

“You look at the success of ‘Ghost Whisperer’ and ‘Criminal Minds’ and say, ‘Of course they’re on CBS.’ They’re not shows ABC would be interested in.”

Thanks to the trio of megahits McPherson developed, Touchstone has both the flexibility and the resources needed to attract new talent.

“There were great building blocks there,” Pedowitz says. “Success causes you to make sure your shows stay successful.”

Toward that end, the studio has ponied up coin on a slew of deals with producers and pods such as Steven Bochco, Rod Lurie, Warren Littlefield, Spyglass Entertainment, Sean Bailey and Jimmy Smits. Pedowitz also has had to shell out big bucks to hold on to producers like Marc Cherry (“Housewives”) and Shonda Rhimes (“Grey’s Anatomy”), while plotting a way to hold on to “Lost’s” J.J. Abrams, whose deal with the studio is almost up.

Beyond money, maintaining Touchstone’s rep as a talent-friendly studio will continue to be a challenge, particularly as ABC’s primetime success makes it harder for the studio to automatically land shows on the network. Producers like Rhimes say so far, so good.

“This was my first foray into television, period,” she says. “But nobody ever said, ‘OK, that was a nice pilot. Now step out of the way and let us run the show, little girl.'”

Then there’s Pedowitz himself.

Exec came to the studio presidency having built a reputation as the hard-driving head of business affairs for ABC and Touchstone. While he had previously worked in production, he admits creative content was not his strong suit.

To get up to speed, Pedowitz made sure to read a draft of almost every single script in the works and to watch rough cuts of all pilots during his first development season at the studio.

He also gave Franz an unusual amount of leeway to make creative decisions; agents and network execs say Pedowitz frequently defers to Franz on day-to-day calls.

“I have 26-plus years on the business side and 20 months on the creative side,” he says. “I’d be foolish not to utilize her skills on creative (matters).”

Franz admits her first response when hearing that Pedowitz had been tapped to replace McPherson was, “Huh?”

“It’s going to sound like I’m kissing his ass now, but he empowers me to do what I need to do,” she says. “He treats me like a partner even though I’m well aware he’s my boss.”

McPherson, who hired Franz when he was at Touchstone, expressed support for his successors at the studio, including drama chief Morgan Wandell and comedy topper Alex Weinberger, crediting the group with doing “a phenomenal job taking the reins of the studio.”

Touchstone’s next priority? Developing successful comedies.

“We have great hopes for ‘Crumbs’ and the Jenna Elfman show on CBS,” Pedowitz says. “We’re trying to figure out comedy just like everybody else.”

The other main challenge for Touchstone in the next year or two will be managing a roster filled with a larger number of successful writers and producers than the studio has seen in years, if ever.

While hit shows are obviously a good thing, success comes with its own set of problems — like figuring out how to say no to the producers of “Lost” or coming up with enough coin to keep the women of Wisteria Lane happy without breaking the bank.

“It’s a great time to have this job,” Pedowitz says. “It’s very tough, but it’s also a lot of fun. You’ve got everything at once.”

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