Lunch at Michael's: Herb Granath – A TV Legend Remembers

At a September 19 dinner at the Pierre Hotel, theIRTS will honor TV industry legend Herb Granath with its Individual Lifetime Achievement Gold Medal Award, an honor previously bestowed on General David Sarnoff, William Paley, Leonard Goldenson, Bob Hope and other radio and TV industry luminaries. (To learn more and purchase tickets, click here.) Herb, who has been a friend and colleague for nearly three decades, is best known as the advocate at ABC who led the acquisition of ESPN and the development of ARTS cable network (later A&E), History, and Lifetime. Today, Herb remains Chairman emeritus of ESPN and is active as co-chairman of Crown Media (Hallmark Channel and Hallmark Movie Channel), vice-chair of Central European Media, and senior advisor to Telenet, Belgium's largest cable programmer (John Malone is the largest shareholder).

"IRTS is one of the finest industry non-profits," Herb believes, "because of the number of young people they have brought into New York for summer internships. Each one gets a job in a leading New York media or advertising company, and some of the real leaders and comers in our business have been through that program." Herb himself has mentored dozens of young people but his favorites are his own four children (with his wife, former Broadway and soap star Ann Flood) and eleven grandchildren – all of whom still live within 15 minutes of Herb and Ann's Connecticut home.

Herb witnessed the Mad Men era as a young ABC sports sales executive, working for Roone Arledge. Although he had been a physics major at Fordham, he got a job as an NBC page and after four years as a page he shifted for his graduate degree to Communications Arts. As a page he worked on the Milton Berle Texaco Star Theater and Broadway Open House, the forerunner to The Tonight Show. After graduating he joined ABC and worked his way up in network sales and at ABC Sports, becoming a lifelong close friend of Howard Cosell, who was voted the most loved and most hated sportscaster in television in the same year. He was one of Cosell's few friends and was executor of Cosell's estate. "Traveling with Monday Night Football was a phenomenal experience," he recalls. "I spent an evening with Frank Sinatra because he would sit in the booth with Howard and then we'd go to dinner. John Lennon was a closet football fan and I sat in booth with him. He sent me every record the Beatles had ever recorded."

Herb's favorite story that actually could become a scene in Mad Men took place in the screening room at ABC with executives from Volkswagen and their ad agency, Doyle Dane & Bernbach. "It was absolutely hilarious as I look back. We had a World War 2 drama planned; a heart-tugging story of U.S. airmen who went on bombing runs. We set up a screening at ABC for DDB and Volkswagen, who thought it might fit perfectly in their marketing plans. We didn't realize the producers had licensed actual war footage of bombing runs to intersperse into the storylines. The show starts and is going along well, when all of a sudden one of the VW executives jumps up and yells, 'Gott in Himmel, that's one of our factories they are bombing.' The lights went up and that was the end of that."

After several years at ABC, Herb left to join Mark McCormick's sports agency as head of TV production, where he stayed for only a year before being lured back to ABC by then president Elton Rule to serve as his #2 executive. "Because of my physics background, I did a little white paper for Elton and (ABC chairman) Leonard Goldenson. It was about cable, multiple channel MDS and other new technologies, most of which were a blip among those in the TV business in 1976. I had a relatively simple syllogism; if you offer more choice people will find something they like. The monopoly of three networks will change and the audience will be eroded. Revenues will be eroded. If you are part of the 'erodees' you should also be part of the 'eroders'. Leonard, who was then well into his 70s, agreed we should get into the cable programming business and asked me to head it. That led us to start the ARTS channel, which was a programming category that was safe with our station affiliates."

ARTS was merged with NBC's The Entertainment Channel to become A&E. Herb was then integrally involved with the development of the History Channel, "which has become a juggernaut." Looking back at the decision to acquire an 80% stake in ESPN," he recalls "the prevailing opinion including a lot of people at ABC was it was a fool's mission. There was already too much sports on TV; who would watch 24 hours of sports? We did lose millions before ESPN became profitable but credit Leonard Goldenson for staying the course." As head of cable programming for ABC, Herb also believed women were underserved by terrestrial networks, so he launched Daytime, which later combined with Cable Health Network to become Lifetime. But, Herb smiles, "I'm like a horse player; I only remember the winners."

Perhaps his only failure was the Satellite News Channel, which ABC developed with Westinghouse as managing partner. "It was a great concept – give us 22 minutes and we will give you the world, on TV. But Ted Turner was so firmly rooted it was difficult to take him on. We were losing money on the other networks and the ABC board wanted to cut back on losses. Bill Baker, who later became head of WNET, was at Westinghouse at the time and I had to inform him of our decision to leave the partnership. I was dreading the conversation, but Bill's board had decided to do the same thing and he had been dreading the conversation with me."

The game changer for ESPN and ABC's cable assets – as well as for the cable programming industry – was a negotiation over rights fees with John Malone, who was running TCI, the largest cable operator at the time. "When we got into the cable business, CNN and Weather and USA were already established and had followed the terrestrial network paradigm of nets providing programming and paying compensation to the stations. So cable networks paid comp to the cable operators in same way networks paid station comp. In the cable business, the universe was 10 to 12 million subscribers. I remember going to an agency guy to sell him on ESPN, and he said, 'wait, your universe is 10 million and you are doing a .2 or.3 rating? I could stand on the corner of 42^nd and Broadway with a megaphone a reach more people.' What had to change was that we could not pay for carriage. We had to convince John Malone it would not work. If ABC goes out of the cable business, everyone will follow and that would force Malone to be in the programming business. John, smart businessman that he is, was the first to agree to pay us for carriage as opposed to being paid. Once he did, we never had a problem with the rest of the industry. That decision may have saved the cable business and made ESPN the winner it is today."

"The other game changer came early on at ESPN when we went to Mike Roarty, who headed advertising at Anheuser-Busch, and we laid our cards on the table. We needed advertiser support but the economics didn't work for most advertisers. We proposed a five year deal to Mike. It would not be a good deal for A-B in the first three years; he would be grossly overpaying. But in last two years they would be buying premium audiences at half the cost of their competitors. When other advertisers saw A-B brands being advertised, they began to respond. A-B was the bell weather. Both companies prospered on that deal." The early Lifetime network struck a similar long-term funding deal with Bristol-Myers.

Herb is a rare TV industry executive who rose in the ranks during the industry's 'heyday' but was an early adapter of cable and advocate of embracing innovation. "While you are young," Herb says, "it's the time to take chances. If you are convinced something is the next great movement, take a shot. Get involved. Don't get mired down in one job. I had eight jobs at ABC," he laughs. "Keep your eyes open. Trust your own instinct." Looking back at the TV industry over his decades of accomplishment, Herb believes "we have lost the spirit of creativity. People are more gun-shy about innovations. It seems we had more freedom and more room for creativity with purpose. There is still a lot of creativity with blogs and social networks, but there is virtually no [economic] support for that yet. And we miss TV that everyone gathers around the 'water cooler' to talk about. There are still a couple of those shows left but they are few and far between." His counterpoint: "what we have gained is more sophistication. The way TV is sold today is so much more targeted than gross numbers. Targeted audiences are and will continue to be the name of the game."

In addition to his leadership in sports TV and cable TV, Herb convinced ABC executives to invest in Broadway plays in order to have access to young writing, directing and acting talent for ABC. ABC became a partner with the Schubert family and Herb remains a "$1-a-year consultant for them." As a result of his initiative ABC struck gold with CATS, Dreamgirls, two Tony Awards and a profitable run of Great White Way hits. Today he recommends Sister Act, which he says he "was not looking forward to seeing but they have done a really good job of making it a good time." Over the years, I have followed Herb's theater recommendations many times and have never been disappointed.

As Herb looks forward to being honored by IRTS, along with Gold Medal recipients Viacom and Pepsico, on September 19, he confirms "it's been a pretty good ride." Looking forward to his many continuing obligations and commitments that would challenge a younger person, he advises, "keep the brain active and the body follows."