ABC Network Shakeup
Dave Murray for Variety

There’s a new regime at the helm of ABC, with a clear, if challenging, mission ahead: reversing the slide that has mired the network in fourth place in the key 18-49 demographic. Newly anointed president of entertainment Channing Dungey, previously head of drama, and her boss, Ben Sherwood, president of the Disney/ABC TV group, have already signaled to the industry that they’ll be making key strategic moves to bolster the network’s standing.

The first step was the timing of the regime change, with development season in mid-swing. “Someone saw an opportunity and made their move,” said one insider, referring to Sherwood, who’d famously long butted heads with Paul Lee.

Dungey admitted to Variety that her new appointment came as “a little bit of a surprise” but said it afforded her an “incredible opportunity” to exert her creative influence over the pilots in progress.

As head of drama, she’s already familiar with the hourlongs in development; given her close working relationship with comedy head Samie Kim Falvey, she has been getting a “crash course” in the half-hours. Sherwood is relying on Dungey’s reputation for good taste to derail the decidedly off-kilter projects that predecessor Lee embraced, like musical “Galavant,” which he renewed despite middling ratings performance. But her true test will come when it’s time to make decisions about which shows to pick up. “You can’t do a ton at this point to course-correct,” says a source. “It’s really about what happens in May.”

“Channing has an extraordinary reputation as a magnet for talent.”
Ben Sherwood

Year-round scheduling strategy will be key as well. Lee’s critics point to his “gap strategy” — giving shows a three-month break — as the final nail in his coffin. The midseason return of the powerhouse Shonda Rhimes TGIT lineup was a ratings disappointment, down double digits for “Scandal” and “How to Get Away With Murder.” Amid a crowded landscape, viewers’ attention had wandered elsewhere. “As we look toward putting the schedule together in May and what comes after that, I think we’re going to be engaged in a lot of different discussions,” Dungey said.

Sources said ABC is looking for more procedurals — which would stand up to repeated airing — though Sherwood dismissed such talk as “overblown.” Dungey acknowledged, though, that she was impressed with Fox’s recent “Grease: Live,” and that the network would be considering live programming.

While much of ABC’s success hails from Shondaland, Sherwood will be looking to Dungey to attract new showrunners. “Channing has an extraordinary reputation as a magnet for talent,” he said. “She is legendary for her thoughtful, penetrating and incisive notes and comments about the work.”

Multiple producers interviewed by Variety agreed. “She makes every project she touches better, and her choices always seem to be made out of passion, not fear,” said Shondaland partner Betsy Beers. “Once Upon a Time” producers Edward Kitsis and Adam Horowitz credit Dungey with giving them one of the best notes they ever received: saving Prince Charming, who’d been slated for death in the pilot. “Channing pointed out that for a series about hope, there’s not a lot of hope in killing him,” Kitsis said.

The new chain of command — with ABC Studios head Patrick Moran reporting directly to Sherwood — not only solidifies Sherwood’s authority but reflects the importance of the studio as a business unit. “Criminal Minds,” for example, which the studio produces for CBS, is a big money-maker for Disney in syndication. “(The restructuring) makes enormous sense both for the people at the network who can focus on what they’re doing and the people at the studio who need the autonomy to do what they do even if they are making a large percentage of their shows for another network,” says Mark Gordon, who produces “Criminal Minds,” “Quantico” and “Grey’s Anatomy.”

With the studio divisions having eclipsed the networks as profit centers for their respective parent congloms, such restructuring is a trend among the Big Four nets. The rapid growth of worldwide program licensing opportunities — revved up by SVOD expansion of the past few years — and the shrinking of the networks’ core advertising base have together tipped the scales. The network serves as a vital launch pad for shows, but the profits are in after-market sales for all but the highest-rated primetime series.

There’s inevitable tension among networks and studios even when those units are under the same roof. When programming and production questions arose for ABC-ABC Studios programs, Lee, by multiple accounts, tended to favor the network’s interests. “It’s hard to be impartial as things comes up,” said a source. “Hopefully this achieves a certain degree of objectivity that will only help the studio, which will only in turn help the network.”

The shakeup at ABC comes at a time when all of Disney/ABC TV Group operations are coming under scrutiny from Wall Street. Concerns about cord-cutting and rising costs have chipped away at ESPN’s image as an invincible cash cow. ABC has been the subject of periodic speculation about whether it’s still a fit with Disney’s larger emphasis on leveraging the power of high-wattage brands: Marvel, Pixar, Lucasfilm, ESPN et al. Lee in recent years had emphasized the effort to build ABC’s brand in phrases like “smart-with-heart” comedies and the female-led “TGIT” sudsers.

But Dungey shied away from any clever one-liners. Asked what defines an ABC show, she said simply: “I think it’s intelligent, emotional, character-rich storytelling.”

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