Paul Lee to replace Steve McPherson at ABC

7:45 PM PST 07/27/2010 by James Hibberd, Kim Masters

ABC Family chief expected to take over network, studio

In a tremendous executive shake-up on the eve of a major TV conference, Stephen McPherson is stepping down as head of entertainment at ABC, and ABC Family chief Paul Lee is expected to take his place.

McPherson, a passionate programming executive who has run the network's entertainment division for six years, is exiting his dual roles as entertainment president and head of ABC Studios. The company is expected to give Lee both departments.

The move comes after months of speculation about McPherson's future and whispers of clashes with Disney/ABC TV Group president Anne Sweeney. The drama also throws ABC into an awkward position going into the Television Critics Assn.'s semi-annual press tour, which gets under way Wednesday morning.

As of late Tuesday, rumors of a sensitive personnel matter involving McPherson were making the rounds, the details and veracity of which were still unclear. ABC declined to comment.

"I want to thank the wonderful team of individuals who have worked with me throughout my time here and wish them nothing but the best," McPherson said Tuesday in an internal statement.

McPherson, who has a stake in a wine business, also said he will announce his future plans shortly, "which will include a new entrepreneurial venture in the spirits business."

"While I will continue with my ongoing wine business, I'll also reveal plans for my involvement in a new media company," he said.

Lee has been at ABC Family since 2004 and has helped reinvent the network. Once considered a stuffy destination stocked with old-fashioned family fare, he helped ABC Family inherit the WB Network audience by programming more contemporary content including "The Secret Life of the American Teenager" and "Greek" as well as highly rated branded events like "25 Days of Christmas."

Although McPherson is credited for ordering last season's breakout comedy hit "Modern Family," which rival studio 20th Century Fox TV produced, he has had a modest track record during recent years for finding successful shows. ABC routinely develops more programs than any other major broadcaster but has had difficulty following up on such aging hits as "Grey's Anatomy," "Lost" and "Desperate Housewives" -- all of which were in development at Touchstone TV when McPherson was president.



Last season, ABC tied NBC for third place in primetime ratings, averaging a 2.7 in the adults 18-49 demographic.

"They haven't really done anything major since 'Housewives,' 'Lost' and 'Grey's,' and none of those shows generate a lot of money going into syndication," a rival executive said. "There's a performance failure the last few years. They've covered up a lot with 'Grey's' and 'Desperate Housewives' and 'Dancing With the Stars,' but it's a very hollow schedule at this point; there are no hits on the horizon. And while 'Modern Family' has done well, it's not like any of their other comedies that are close to being hits. They spend money like drunken sailors -- on talent, on development. For what they're spending, you'd expect bigger results."

Insiders also cited McPherson's famous temperament. The executive is said to have thorny relationships with other top executives, particularly Sweeney.

"He just doesn't play well with others," one industry insider said.

McPherson's departure has been rumored for months, and eyebrows were raised when he canceled the network's traditional upfront presentation news conference in May. Since then, McPherson has gone quiet, though that's hardly unusual for the press-averse executive. Rumors began to intensify this week after McPherson didn't return to the office after a vacation.

"Going into May was very unpleasant this year," one insider said. "There was a lot of second-guessing. Obviously, there has been a rift there (with Sweeney) for some time. I don't think he respects her. She's been deft at moving people out ... and started chipping away. Bob (Iger) was a defender of Steve. Bob thought he was a handful, but talented."

Sources said McPherson was vacationing in Maine (he since has returned) and might have gotten wind of ABC talking to Lee, then decided to break ties early with Disney -- unexpectedly leaving the company before the network's upcoming TCA press-tour session.

"My guess is he caught wind of some conversations with Paul Lee," one insider said. "I think he said, 'Enough.' He saw the bus coming. He's enjoying his vacation. He wasn't in turmoil. He has not been happy (at ABC) for quite some time."

ABC's executive session at the TCAs is scheduled for Sunday.

"Are they going to have Paul Lee up there?" one insider asked. "He's an articulate guy. I suppose he'll put his tap shoes on."

Given that the removal of an entertainment executive before the fall season signals dissatisfaction with the upcoming slate, it likely will be an awkward session for the network as it attempts to rally media enthusiasm for McPherson's final crop of ABC shows.
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