Yesterday, new creative honcho Ben Silverman and his boss Jeff Zucker gave interviews to compliant media (The New York Times, Variety, etc) who matter-of-factly reported NBC’s bizarre decision not to buy Silverman’s production company or demand he divest it before coming to work for the corporation. Hollywood insiders told me that NBC had to insist on either course of action before hiring Ben because of the perception if not the reality of the obvious conflict of interest. Given how successful Silverman’s Reveille has been creating, producing or packaging an eclectic mix of scripted and reality programs, spread across broadcast networks, cable networks and the Internet, Hollywood sputtered all Memorial Weekend over what a fortune it would cost NBC to bring in Ben. Yet the last thing Zucker wanted to do was look like a Big Spender to Wall Street. So a supposed solution was reached: Zucker claimed NBC simply extended its deal with Reveille for another two years without acquiring the company outright. In turn, Silverman will still own an interest in the company but appoint an exec to run it like a blind trust, complete with claims that Ben won’t participate in new shows for Reveille or profit financially from any programming decisions he makes that benefit his company.
Who are they kidding? This sweet arrangement of letting Ben have his cake and eat it too is unworkable. And NBC knows this based on very sour past experiences.
I researched what happened the last time NBC put a prolific producer in charge of its creative division: Don Ohlmeyer, whose busy Ohlmeyer Communications Co was producing both entertainment and sports, including such valuable franchises as the Skins Game golf tournament and the Indianapolis 500. (OCC was owned in part by RJR Nabisco and providing programming for networks and cable.) At the time NBC announced that Ohlmeyer would become its West Coast chief on February 4, 1993, both Bob Wright and Dapper Don said OCC would continue to operate intact — albeit under someone else’s direction and with Ohlmeyer remaining at “arm’s length.”
It didn’t last long. Six weeks later, on March 16th, 1993, Ohlmeyer divested himself of the sports programming and sports sales interests of his production company to avoid any appearance of impropriety. But that happened only after an outcry in the trades and newspapers. News reports back then spoke of questioning in some quarters whether Ohlmeyer could “navigate the ethical shoals of running a network’s entertainment division while maintaining a financial interest in his own outfit, Ohlmeyer Communications Co?” As a result, reporters were then told that, even though NBC’s and OCC’s legal departments felt “there was no conflict”, Ohlmeyer was rumored to be putting his interest in OCC into a blind trust. But that didn’t satisfy, either. “The Ohlmeyer ties to both OCC and NBC appear to some TV exex as a conflict of interest, though concern about Ohlmeyer’s continuing stake in OCC doesn’t seem to offend his competitors or his bosses at GE,” Variety wrote. “A former NBC executive said, ‘Even if Ohlmeyer’s company doesn’t do business with (NBC’s) entertainment division, the mere perception a conflict of interest is the last thing that network needs at this moment.'” In the end, Ohlmeyer, Wright and NBC decided that divestiture was the only way to stop the controversy.
Nor was this the first time. I read that, in the past when NBC tapped independent production executives like Grant Tinker and Dick Ebersol for leadership positions, they divested themselves of their lucrative production franchises so they would not create a conflict of interest. “In 1989, for example, when Ebersol was tapped to run NBC Sports, he dumped his financial interest in Later With Bob Costas and a sporadic Saturday-night wrestling program, which continued to run on the network,” Variety reported long ago. “Tinker, too, divested himself of his financial stake in MTM Enterprises not long after his then-boss, RCA chairman Thorton Bradshaw, tapped him to helm the web in 1981. Upon the urging of RCA’s attorneys, Tinker tried putting his MTM interest in a blind trust. When that situation became sticky, Tinker willingly sold his interest to MTM’s other principals.”
In 1993, Tinker told Variety he didn’t think Ohlmeyer’s situation was “that big a conflict” because Don was running NBC’s showbiz whereas his OCC produced mostly sports. Fast forward to today: Silverman will be running NBC Universal’s creative domain while his production company produces entertainment for it. Obviously, NBC, like the compliant media covering it, has no institutional memory.