ABC said to be considering merger plans

Stephen McPherson rumored to head combined unit

Merger mania might be hitting ABC's TV operations.

With NBC announcing Monday that it will combine operations with sister studio Universal Media Studios, industry sources have been buzzing about similar plans under consideration at ABC.

ABC entertainment president Stephen McPherson, who inked a new contract in May, is rumored to head the newly merged unit.

Ever since he took over as entertainment chief in 2004, McPherson has been looking to also oversee the studio he once ran.

Barry Jossen -- ABC Studios' recently appointed No. 2 executive, who is said to have a great rapport with McPherson -- is being bandied about for a key position at the combined company.

Meanwhile, ABC Studios president Mark Pedowitz, whose contract is up in February, is in the process of negotiating a new deal. The veteran ABC business exec, who is well liked by Disney brass, is expected to stay, possibly in another job within the Disney-ABC TV Group.

A merger between ABC and ABC Studios could be one of the potential cost-cutting measures hinted at Tuesday by Disney CFO Tom Staggs, who said the ABC network is "one of the more challenged businesses we have," adding that management is looking at potential changes.