(3 of 4)
The good news on Carson was balanced off by a continued slump in the news division. Weekend magazine, critically praised but sparsely watched, was scrapped. ABC's Good Morning, America continues to gain ground on the Today show, which once ate the competition for breakfast. Worse still, two weeks ago, the Nightly News briefly fell into third place in the ratings for the first time ever. The network partly attributed the drop to ABC's rejuvenated news operation. It also admitted that affiliate switches had hurt; in the past two years, NBC has lost ten major local stations to ABC, affecting the ratings for both news and entertainment shows. Nonetheless, there were some hopeful signs: the news budget is up 23% over last year, and Tom Snyder (host of the new magazine Prime Time) and Phil Donahue (with frequent appearances on Today) should bring ratings punch.
As if the network did not have enough to fret about, NBC has been trying since November to clear up a scandal that had been winked at for years, according to some NBC insiders. Under investigation are expense-account fraud and the embezzlement of hundreds of thousands of dollars by some NBC unit managers, who handle logistics for news, sports, and entertainment crews on location. So far 18 of the 55 unit managers, including their autocratic supervisor, Vice President Stephen Weston, have lost their jobs, and one has pleaded guilty to criminal charges.
A fair-sized army of company brass, auditors, accountants, lawyers and Government investigators are still sifting through records of the past five years. Each manager has been grilled individually. To safeguard possible evidence, investigators had Weston's office sealed by a carpenter. When they ordered typeface samples from all the unit managers' typewriters, one manager's machine disappeared after a mysterious 2 a.m. fire in his office.
The unit managers, who carried greenbacks by the briefcase to pay bills for travel, lodging, food and miscellaneous production costs, were not content with garden variety expense-account gamesmanship. They padded payrolls, cashed in unused airline tickets and accepted kickbacks from caterers, hotel managers and equipment salesmen. "Organized dishonesty," Griffiths told stockholders.
One of the first jobs undertaken by Jane Cahill Pfeiffer when she arrived last fall as NBC's new chairman, Silverman's second in command, was to get to the bottom of the scandal. The former IBM vice president has also stepped on toes trying to straighten out the network's tangled management structure. Said one executive: "She has a Mother Superior complex." Chipped in another: "I understand that at IBM they don't fire people, they just reorganize in such a way as to drive someone out. That is exactly what is going on here."
At least one high executive has been fired, others have been transferred to RCA, and more have left on their own steam, usually after their responsibilities were tapered. "When you have a company with as many difficulties as we have had, you have to adjust functions," said Pfeiffer blandly. "Sometimes able people have to paint on smaller canvases." She added: "There will not be a lot of firing in the next several months. But there will be additional key changes."