September 27, 2010 / 9:07 PM / 9 years ago

Disney's ABC looks inside and outside for ABC News chief

* Disney ABC continues to search for ABC News chief

* Looks for person with technology experience

* Considers internal and external candidates

By Sue Zeidler

LOS ANGELES, Sept 27 (Reuters) - Will Silicon Valley digerati shape the destiny of Walt Disney Co’s (DIS.N) ABC News?

That’s the question that Anne Sweeney, president of Disney-ABC Television Group, faces as the quest to reinvent the network news business and find a leader for ABC News has taken her outside media and even as far afield as the U.S tech capital, said industry sources familiar with ABC’s process.

The network is replacing David Westin, a corporate lawyer with little background in news before he took over in 1997.

At ABC, tapping talent from outside the news business is part of its playbook. Westin, who will leave by the end of the year, succeeded TV legend Roone Arledge, a sportscaster with little news experience.

But with U.S. broadcast news viewership declining to a fraction of what it was three decades ago because of cable news and the Web, the demand for a leader with roots in technology and an understanding of changes buffeting the news business has expanded the applicant pool, the sources said.

Sweeney has begun meeting with candidates and is expected to announce a successor sometime this fall.

“ABC News will have to expand beyond the narrow base of the broadcast television industry quickly in order to manage a decade-or-so-long transition to a world where its content is distributed on TV, online, on tablet screens, on cellphones... and on media we have never dreamed of,” said TV news analyst Andrew Tyndall.

ABC’s decision to search beyond the usual assortment of media talent marks a new path compared to other networks.

CNN pushed out its U.S. chief Jonathan Klein last Friday and replaced him with another media executive from sister channel HLN. Comcast Chief Operating Officer (CMCSA.O) Steve Burke will replace Jeff Zucker as the head of NBC Universal.

To be sure, Disney is also considering internal candidates to replace Westin, who was recently forced to slash more than 300 jobs.

They include Senior Vice President Kate O’Brian, who oversees news gathering; Paul Slavin, who runs ABC News’ digital operations; and John Banner, executive producer for “World News with Diane Sawyer,” according to the industry sources familiar with the process.

ABC is looking for other ways to strengthen itself. It has held talks with Bloomberg to collaborate on news gathering, sources said, comparing them to on- and off-again discussions between CBS (CBS.N) and Time Warner Inc’s TWX.N CNN. The talks are no longer happening, the sources said.

Bloomberg declined to comment.

Whether Disney will even keep ABC has been a topic of persistent speculation in the media business, though one ABC insider said ABC News is profitable and it could be more so.

Still, the network must change in other ways, said Media Valuation Partners principal Larry Gerbrandt.

“You have to look at it from a fresh perspective and reinvent 21st century news for the 21st century viewers,” Gerbrandt said. “This is a time of profound change in television and most of the historic fixes haven’t worked.”

In the most recently reported quarter, revenue at Disney’s media networks arm, home to sports cable network ESPN and ABC, rose 19 percent to $4.7 billion. But the cable division drives the business with healthy profit margins, while ABC has been weighed down by costs and competition.

Unlike rival General Electric’s (GE.N) NBC, which has a financial advantage by being able to spread costs around to cable channels CNBC and MSNBC, ABC has no sister cable news channels. (Reporting by Sue Zeidler. Additional reporting by Alex Dobuzinskis. Editing by Kenneth Li and Robert MacMillan)

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