Can Berman Make Fox Run?

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With Fox Television Entertainment Group Chairman Sandy Grushow bailing out last week, Fox Entertainment President Gail Berman suddenly finds herself running the network. It's a good thing everybody gives her high marks for creativity. She's gonna need every bit of it—and big help from a new American Idol.

News Corp. Chairman Rupert Murdoch has made it clear he's unhappy with the network's fall standings; the pressure is on to win the 18-49 crown. In a season that will include NBC's Friends
finale, though, capturing that demo is virtually an impossible dream, with or without Grushow.

Still, before, Berman shared blame and credit with the brash and blustery Grushow. Now Fox's American Idol
highs and Joe Millionaire 2
lows will be hers and hers alone.

"This is a great opportunity for Gail to step up and demonstrate that she's capable of leading the company without anybody above her," Grushow said. "Frankly, I think she is capable. I wish her nothing but the best, and she knows I'm going to be rooting for her every step of the way."

Thus far, Fox is flat year-to-year in its key, adults 18-49 demographic, averaging a 3.7 rating/10 share. That ties it for second with CBS and puts it a bit ahead of ABC at a 3.6/10. NBC leads with a 4.1/11. (If you back out Fox's big postseason baseball ratings, however, it's averaging only a 3.0/8.) only a 3.0/8.)

Hollywood's waiting to see how Fox will fare under Berman's empowering management style without the added push of Grushow's high-voltage style.

"Sandy's a very, very hard worker, and he expects nothing to go out that's not as close to perfect as it can be," says Jamie Kellner, chairman of The WB, who was once Grushow's boss at Fox. "People who don't like to work that hard resent being challenged that aggressively."

Ready For the Show

But Berman knows the challenge and is ready to take her best shots. Even before Grushow's announcement, she plotted Fox's midseason slate to include reality show My Big Fat Obnoxious Fiancé, dramas Wonderfalls
and Still Life, and comedies Cracking Up
and Oliver Beene—all off-center in that Fox kind of way.

At the moment, Fox is holding its breath, hoping the return of American Idol
on Jan. 19 will turn the network's fortunes around, just as it did last year, when it not only scored huge numbers for itself but also lifted the ratings of all its surrounding shows. If Berman can get that kind of performance again, she'll be able to breathe a little easier.

Don't bet against it. Berman is "an extraordinary manager," says Dana Walden, president of 20th Century Fox Television. "She's such a creative person herself that she inspires her team to try and be as creative."

The premieres of Joe Millionaire 2
and Skin
were profound disappointments for Fox executives, who were hoping to keep the momentum from baseball flowing right through the premiere of the next iteration of American Idol. Instead, the network struggled through November. The huge opening of The Simple Life, starring heiresses Paris Hilton and Nicole Richie, has been one bright spot on Fox's fall schedule. The continuing success of teen drama The O.C.
is the other.

Berman came to News Corp. in 1998, when Fox Television Studios President David Grant hired her to be the first president of Regency Television, a boutique production company that is a joint venture of Fox Television Studios and New Regency Enterprises. At the time, she was an executive producer, with creator Joss Whedon, of 20th Century Fox's Buffy, the Vampire Slayer
and its spinoff, Angel.

"I was not seriously considering her as a candidate until I spent an hour with her," Grant says. "I realized that she had all things I would be looking for. I passed by the likely suspects and went with her."

At Regency, Berman developed Fox hit Malcolm in the Middle
and The WB's (and later UPN's) less successful Roswell, which aired from 1999 to 2002. She became president of Fox Entertainment on July 5, 2000, and the team of Grushow and Berman lasted longer than any other in Fox history.

Berman now has to prove that she can successfully steer the network through good times and bad while developing and delivering hit shows. It's no mean feat, say executives who have done it themselves.

"I think it's going to be hard for her," says one such source. "She's creative, but it takes more than just creativity to make a network successful. You have to understand how all the parts work."

Grant says Berman has the goods: "She's got an entrepreneurial mindset and a natural head for business."

Grushow enters 'phase two'

The proof of Berman's business acumen is that, at 23, she and a partner raised the funds to produce the Broadway production of Joseph's Amazing Technicolor Dreamcoat, which went on to win seven Tony nominations. She left the grueling fundraising of Broadway to run Sandollar Television before getting the job at Regency.

While Berman toils on at Fox, Grushow will be starting his own production company, Phase Two, at 20th Century Fox Television, the studio he is credited with turning into a powerhouse. Grushow is taking advantage of an exit clause in his contract to launch the company.

"This is a major commitment on the part of the company," he says. "This is not a vanity deal. I think there's an opportunity to create enormous value for News Corp., and the company thinks that too."

Murdoch's family way

Still, there's a back door with this deal, too: "It comes with an out clause should I happen to wake up one day and realize that being Jerry Bruckheimer isn't all that it's cracked up to be," he jokes. Or, should a big job at Disney or Time Warner come along, Grushow will be free to take it.

Sources close to Grushow say his Hollywood style occasionally rankled Murdoch, who prefers his lieutenants to be blue-collar, humble and loyal. In negotiating his contract renewal, Grushow asked for more—more responsibility, more perks, a bigger title—and was told no, sources say.

"Has anybody ambitious ever gone into a new contract negotiation and not asked for more power?" asks one studio executive who knows Grushow well.

With no place to rise in the company and the Murdoch kids coming on strong, Grushow knew his time was up if he aspired for more. And those who know him say he always does.

"Sandy is a very ambitious man," says an executive who worked with Grushow at Fox. "He's still young, and he's wondering where he goes next in this business. But, in the Murdoch organization, Murdoch's kids come before anyone else."

In the past few months, two of the Murdoch offspring have taken higher-profile positions within News Corp., with James, 30, becoming head of UK satellite-TV company BSkyB in November and Lachlan, 32, assuming more direct control over the TV-station group now that Mitch Stern is moving over to run new acquisition DirecTV. Elisabeth, 35, also could end up in a top position, although, for now, she is running her own non-News Corp.-affiliated production company in London.

What that may have made apparent to Grushow and to his boss, News Corp. Chief Operating Officer Peter Chernin, is that there is no room at the top for them. With Grushow deciding that the time to exit is now and Chernin reportedly in talks with Disney, the question of who will inherit News Corp. may be decided sooner than anyone thinks.

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