Paul Lee Ben Sherwood
Courtesy of ABC/Rex Shutterstock

Both executives tried to put the best face on it, but there was little doubt among ABC insiders of the tension between ABC Entertainment Group president Paul Lee and Disney/ABC Television Group president Ben Sherwood during the past year.

The timing of Lee’s resignation was a surprise to network staffers on Wednesday but the fact of his departure was not. The tug-of-war with Sherwood over having the last word on decisions involving the network and ABC Studios unit was wearing on the exec, as were the inevitable corporate politics within Disney.

Disney chairman-CEO Bob Iger made a point of protecting Lee with a new two-year employment contract in early 2014 after he was passed over in favor of Sherwood as the successor to Anne Sweeney as president of Disney/ABC Television Group. But the Iger shield lasted only so long. With Sherwood and Lee having fundamental differences of opinion on key issues facing the network and ABC Studios, something had to give.

After Sherwood formally took the reins from Sweeney in February 2015, the former ABC News president dug in to every aspect of ABC’s business. That process led him to have direct communications with Lee’s staff and showrunners in a way that irked Lee, multiple sources said. The awkwardness between the two execs was highlighted in early December when Sherwood held a year-end town hall meeting for Disney/ABC TV staffers on the stage of “Jimmy Kimmel Live” in Hollywood. Lee’s presentation at the meeting came via closed circuit from ABC’s Burbank headquarters. Although Lee was not the only exec to present from afar, the chilly relations between ABC’s leader and Sherwood were evident to many in attendance.

During his tenure at ABC News, Sherwood was known for firing off to his staff a steady stream of ideas and suggestions at all hours of the night. That tendency has continued in his new role, to the point where Sherwood has been criticized for what some see as his micro-focus on small details regarding ABC shows rather than larger strategic issues facing the Disney TV group. Sherwood, like Sweeney before him, oversees all things TV at Disney with the exception of ESPN.

Lee is said to have pushed for ABC to mount a more aggressive effort to revamp the Watch ABC app that allows for authenticated live streaming of network programming. ABC has also been nurturing an original digital content initiative under Lee’s direction.

Sources said Lee was frustrated by what he saw as Sherwood’s lack of attention to the importance of ABC innovating in the digital arena. However, others faulted Lee for being overly protective of the network’s core linear TV business. Insiders also noted that Sherwood appointed two new group-level digital execs, John Frelinghuysen, exec VP of digital media, strategy and business development, and Cindy Davis, exec VP for consumer experience, in September.

Sherwood and Lee declined to comment for this story.

Sources said Lee’s resignation was prompted in part by Sherwood’s increasing focus on the nitty-gritty of the network and its programming as ABC slipped to third place in key demographics this year. Last season, Lee had a buffer in the network’s surprisingly strong performance with new series include “How to Get Away With Murder” and comedies “Blackish” and “Fresh Off the Boat.”

This season, ABC has fielded a promising freshman drama in “Quantico,” but overall numbers are down for returning shows, including last season’s hot-shots. The network’s most heavily promoted comedy, “The Muppets,” was a behind-the-scenes mess that led to a hasty revamp of the creative team and a relaunch earlier this month that drew its lowest rating to date.

ABC is hardly alone among broadcast networks in seeing linear ratings declines as viewers increasingly favor time-shifted viewing options. But the increased scrutiny from Sherwood and others as ABC moves through pilot season this year became more than Lee was willing to bear after nearly six years in the job. He took over from Stephen McPherson in July 2010 after previously running ABC Family.

Lee, a Brit who got his start as a documentary producer for the BBC, has had a mixed reputation in the creative community. He’s considered aloof by many top TV agents, and ABC on his watch has often frustrated agents and producers for keeping a tight lid on information during pilot development and deliberations about the fate of existing series. More recently, as the strain with Sherwood grew, Lee had been seen as circling the wagons around ABC even further.

At the same time, Lee has gained respect for walking the walk in bringing greater diversity to ABC’s programming.

Lee had a hand in setting up Channing Dungey for the promotion to succeed him in the role of entertainment president, although Lee’s purview was wider in that he also oversaw ABC Studios. Patrick Moran, exec VP of ABC Studios, now reports directly to Sherwood. The decision to break up the reporting structure of the network and studio was meant to provide more independence to the studio, which has become a bigger profit center than the network through the growth of the worldwide content licensing business.

Lee had been a champion of Dungey, who spearheaded the development of the buzzy “Scandal” and “How to Get Away with Murder” and helped conceive the “TGIT” programming strategy for the trio of Shonda Rhimes’ dramas (including the veteran “Grey’s Anatomy”) on ABC’s Thursday schedule.

Dungey’s status as the first African-American executive to lead programming at a broadcast network is in keeping with Lee’s legacy at ABC. He drove the effort during the past three years to increase the volume of diversity on its air with culturally specific shows dealing with issues of race and ethnicity that were previously considered taboo for network TV. He also emphasized the importance of diversity behind the camera with creators and showrunners such as “Blackish’s” Kenya Barris, “Fresh Off the Boat’s” Nahnatchka Khan and Cristela Alonzo of last season’s comedy “Cristela.” On Lee’s watch, Rhimes came into her own as one of the entertainment industry’s most powerful producers, regardless of race or gender.

In a Q&A session with “HTGAWM” star Davis in November at the Paley Center for Media in New York, Lee noted that even as recently as a few years ago, there were internal questions at the Alphabet about the economic viability of drama series led by African-American actresses. He pushed the issue out of his conviction that network TV was doomed if it didn’t take steps to better reflect the increasingly diverse demographics of the nation overall. This year’s breakout drama, “Quantico,” is toplined by former Bollywood star Priyanka Chopra, another first for network TV.

“The real move to be truly inclusive is about the voices that tell these stories,” Lee said at the Paley Center event. “The most interesting about all of it is that these voices are relatable to everybody in America. ‘Fresh Off the Boat’ doesn’t just attract an Asian-American audience. ‘Blackish’ doesn’t just attract an African-American audience. The more specific the voice you have, the more universal you can be. That was a fantastically empowering idea.”

(Pictured: Paul Lee, Ben Sherwood)

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