UPDATED: In a major executive upheaval in the middle of pilot season, ABC Entertainment Group president Paul Lee has abruptly left the network. ABC head of drama Channing Dungey has been named president of ABC Entertainment, becoming the first black executive to run one of the Big Four networks’ entertainment divisions.

Dungey, a well respected executive who oversaw the development of such ABC shows as Scandal, Criminal Minds, How To Get Away With Murder, Quantico, Army Wives and Once Upon A Time, will report directly to Ben Sherwood, co-chairman, Disney Media Networks and president, Disney|ABC Television Group. Patrick Moran, EVP, ABC Studios, will continue to oversee day-to-day operations. Moran had reported to Lee but now will report directly to Sherwood. That move seems to confirm speculation going back more than a year about Sherwood is putting a great deal of emphasis on the TV studio side of the operation. With the increase in popularity of portable devices and streaming services such as Netflix, content production is a growth area whereas, in the broadcast network world, executives have joked for some time that flat is the new up. Dividing up the responsibility for the network’s entertainment division and ABC Studios, and having both execs report to directly Sherwood gives the studio a seat at the table.

There is no immediate replacement for Dungey as head of ABC’s drama department.

There had been rumors about Lee possibly leaving ABC ever since Sherwood was named to replace Anne Sweeney in spring of 2014. Both are considered strong-willed executives with creative vision and hands-on approach that has led to clashes. At the time, Lee re-upped his contract, and went on to preside over one of the most successful broadcast seasons in recent years, as ABC last season launched a number of strong series led by HTGAWM. But that did not quell speculation that Lee, who was named to his job in 2010, did not see eye to eye with Sherwood, who’d actually assumed his current post in February of ’15 when Sweeney stepped down, and had been yet to put his stamp on the network until now. Lee’s current contract was set to come up before the end of this year. He is expected to sit it out.

Another subject on which the two execs were said to have differed: Sherwood wanted to add to ABC’s primetime slate more procedurals with closed-ended episodes conducive to repeat broadcasts. Lee, however, favored serialized dramas, using other series to bridge the timeslot during times when those dramas went on hiatus – or, as some industry wags liked to call it, during “Paul’s European vacation.”

Among the four major broadcast networks, ABC is this season to date ranked No. 4 in the key 18-49 age bracket, and No. 3 in overall audience, though it is the only one of the Big Four to lack a presence of NFL football on its primetime schedule (CBS and NBC both air primetime football broadcasts in the fourth quarter, while Fox enjoys routine high-rated Sunday NFL over-runs).

ABC LogoLikely contributing to the case for an executive change was the fact that ABC is down this season by 14% in that metric while down 13% in overall audience and down 15% in the slightly older 25-54 age bracket. The network had a couple of flops, including Blood & Oil, Wicked City and The Muppets, though it also had a breakout in Quantico and a growing sophomore in Fresh Off the Boat. Meanwhile, of ABC’s broadcast competitors: CBS, which broadcast this season’s Super Bowl, is flat in both demos and up 1% in overall audience. NBC is down 14% in the younger demo and 9% in the older and down 8% in total viewers, though a lot of that decline is owing to its having had last season’s Super Bowl.  Fox is flat in the key younger demo, up 4% among 25-54 year olds, and up 5% in overall audience.

The timing of Lee’s departure is surprising, given that ABC is in the process of producing its pilots for next season. That said, it’s not the first time ABC has dismissed an entertainment chief during pilot season in advance of the upfronts. It happened to Lloyd Braun and Susan Lyne in 2004 when the two were let go in April, after the pilots had been produced but before series pickup decisions had been made. Then, as now, picking an insider to fill the post has made it much less of a jolt for the network, and for producers working on its pilots (back in ’04 it was Steve McPherson).

Sources said that the process of changing the top entertainment executive at the network started at the beginning of 2015 with a plan to time it in a way so Lee’s successor could be very involved in the production of the pilots and the decisions which pilots would go to series.

Lee, a British journalist-turned-TV-producer-turned-executive, had been considered something of a Hollywood outsider when named to the ABC job though he’d gotten great reviews running ABC Family, where he spent six years, before Sweeney named him to replace McPherson at the broadcast network, on the eve of the ’10 summer TCA. But, after a few rocky seasons, he led ABC to a strong place, with a solid slate of original series, and the Hollywood community warmed to Lee, who was considered a straight-shooter.

It is unclear what will be Lee’s next move. While at ABC, he had been approached for what he had once said would be his dream job, running the BBC.

“Leading ABC has been a fantastic experience. I’m especially proud of the incredible team I built and the strategic, creative vision we established and successfully executed for both the network and studio,” Lee said in today’s announcement. “Together, we’ve transformed ABC into one of the strongest brands in television, with shows like ‘Scandal,’ ‘Blackish,’ ‘Once Upon a Time,’ ‘How to Get Away with Murder,’ ‘The Goldbergs,’ ‘Revenge,’ ‘S.H.I.E.L.D.,’ ‘Quantico,’ ‘Fresh Off the Boat,’ and ‘American Crime’. I wish Channing and Patrick all the best.”

Meanwhile, his replacement, Dungey, said, “I’m thrilled and humbled that Ben has entrusted me with this tremendous opportunity. And I am truly grateful to Paul for being a valued mentor and friend. I’ve had the great honor of working alongside the talented team at ABC for many years and look forward to starting this exciting new chapter with them.”

And Sherwood said of his choice: “Channing is a gifted leader and a proven magnet for top creative talent, with an impressive record of developing compelling, breakthrough programming that resonates with viewers.” He continued, “We thank Paul for his many accomplishments at ABC and his devotion to the ABC brand, and we wish him continued success in the future.”