A Former Fox Exec Is Set to Clean Up ABC News. ‘Livid’ Staffers Say He’s Failing.

Peter Rice, the top Disney executive overseeing ABC News, boasted last year to staff about improving the culture at the news division and not shying away from “tough conversations.” But three weeks after a bombshell lawsuit publicly accused Good Morning America’s former executive producer of sexual assault, angered staffers say Rice has failed.

Late last month, a producer who works closely with GMA co-host George Stephanopoulos sued her former boss, Michael Corn, alleging he sexually assaulted her and created a hostile work environment. Corn, now president of news for Nexstar’s cable upstart NewsNation, has strenuously denied the allegations and ABC denied the woman’s claims that it failed to properly investigate the situation, and has vowed to fight in court.

Following the lawsuit, newly installed ABC News president Kim Godwin called for an independent investigation into the allegations and the company’s handling of them. But rank-and-file ABC News staffers who spoke with The Daily Beast said they are “livid” that Rice, as Godwin’s boss and as Disney’s television chairman, has yet to respond or address staff about the situation.

“People don’t feel heard. The strategy is a bad one and it’s rubbing people the wrong way,” one senior ABC journalist told The Daily Beast. “They told us they were going to change the place for the better but we seem to be going backwards.” ABC and Disney employees who spoke with The Daily Beast asked to do so anonymously out of fear of retaliation.

Furthermore, staffers are angry that despite promises to clean up the culture at the network, the three executives who, according to the lawsuit, were made aware of the sexual-assault allegations in 2017 have faced little accountability, multiple ABC News staffers said. (The litigation cites GMA’s then-publicist Heather Riley, ABC News business executive Derek Medina, and network lawyer Tanya Menton as having knowledge of the claims but failing to properly investigate Corn.)

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During a previously unreported Sept. 2 meeting with the ABC News Culture Council, an employee-led committee established last summer, Rice was pressed on the Corn allegations and was informed that staffers did not trust Disney’s processes for reporting harassment. According to two people on the call, members were left stunned when Rice failed to provide reassurance that Disney took the matter seriously.

Elsewhere on the call, Rice promised to address the news division on the situation, sources said, but two weeks later that meeting has yet to be scheduled.

ABC News and Disney did not respond to a request for comment.

Rice announced the formation of the Culture Council last July in a company-wide memo stating he would chair the committee with the hope that it would “harness our collective determination to build a culture that empowers journalism” amid fallout from senior news executive Barbara Fedida’s exit over allegations she made “racially insensitive remarks.” Rice wrote that he was “deeply optimistic about what we will achieve together.”

Months later, according to three people familiar with the matter, members of the Culture Council are less than optimistic about the state of affairs at ABC News, saying they feel they were used as “PR props” by Rice to quell a mounting crisis and that several of their initiatives have since been abandoned.

Rice joined Disney in 2018, after a long career under Rupert Murdoch at Fox entertainment, and his tenure has been rife with conflict with fellow executives. He came from a looser culture at Fox and has never overseen a news division and so, people with knowledge of the situation say, a culture clash may have been inevitable.

“It was a bad fit from the start,” one Disney executive said. “He’s a blunt instrument who changes his mind a lot and can never admit when he’s wrong,” said another executive who worked with Rice at Disney.

Others who’ve worked alongside Rice said he clashed early on with Disney executive chairman Bob Iger. Elsewhere, sources said, the January exit of ABC News President James Goldston—whom Godwin replaced this spring—was caused in part by Rice’s ongoing disputes with the news executive. According to three people familiar with the situation, Goldston and Rice repeatedly fought over key newsroom decisions, including the handling of a high-profile dispute involving Stephanopoulos. Goldston declined to comment on this story.

And following Bob Chapek’s ascension as Disney’s new CEO, Rice has had a rocky few months including being stripped of his profit-and-loss responsibilities earlier this year in a reorganizational move that effectively “neutered” him and left him “furious,” according to multiple people with knowledge of the matter. Rice has openly joked that he no longer has any power at Disney and may leave the company, according to two people who heard him make such remarks. However, Rice reportedly signed a new contract with Disney last month.

The former Fox executive is said to have made the call with fellow Disney execs to publicly fight the sexual-assault lawsuit, potentially exposing the company to further scrutiny and a financial liability potentially running into tens of millions of dollars.

That decision, and any possible financial and reputational hits to Disney, may impact Rice’s longevity at the company, said people familiar with the situation. (On Wednesday, an amended version of the suit claimed ABC News retaliated against Corn’s accuser after she formally complained. The network said this claim is “untrue.”)

“Disney could be paying for years for this,” said Nancy Erika Smith, who represented Gretchen Carlson in her landmark sexual-harassment suit against then Fox News Chairman and CEO Roger Ailes. “They have a smart woman [Godwin] in charge and they should listen to her. What’s their PR budget compared to whatever these women’s demands were in mediation? And they are going to fight it? This is old school and it doesn’t work anymore.”

Furthermore, Smith added, “This is ripe for punitive damages especially when [Rice] is blocking taking action… I think you are looking at tens of millions of dollars, not to mention the PR hit.”

Rice and Disney are no strangers to the public scrutiny that comes with legal action. In 2019, an arbitrator called out Rice and Dana Walden, a former Fox colleague now serving as Disney’s chairman of entertainment, for “false testimony in an attempt to conceal their wrongful acts” in litigation over profits from Fox TV drama Bones. Disney, meanwhile, already faces a messy legal fight with actress Scarlett Johansson over the release of Black Widow on its streaming service.

Rice’s background as a successful executive in the Murdoch media empire has certainly played a role in his seeming struggles at Disney, people with knowledge of the matter told The Daily Beast.

A favorite of former boss Rupert Murdoch, the 55-year-old Disney executive began his career in 1987 as an intern at 20th Century Fox and quickly climbed up the ranks of the company. When Murdoch made one of the savviest plays of his career and sold his film studios to Disney in 2018 for a massive payday, Rice was one of the few Fox executives who transitioned to the new owners.

His close relationship with Murdoch dates back more than three decades to when Rice’s father Tom gave crucial support to the billionaire media mogul in his long-running war with the print unions—an infamous saga known as the Wapping dispute.

“His father got him the job in the first place and he turned out to be a bloody talented guy,” Kelvin MacKenzie, who edited The Sun from 1981 to 1994, and was once a close Murdoch confidant, told The Daily Beast. “Without [Tom] Rice, Murdoch would have been beaten and the unions would have been running his business. He is massively indebted to Tom Rice.”

“Peter, a great executive. Much liked, especially in the creative community,” Murdoch emailed The Daily Beast when asked about Rice.

David Hill, a former Fox Sports boss and a friend of Murdoch’s, told The Daily Beast that Rice recently acknowledged to him that he is still adjusting to Disney’s vastly different culture from Fox’s.

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“I think he’s fantastic, he’s great. I know Peter is honorable, everything I know about him is that he is a fantastic bloke,” Hill said, echoing Murdoch’s praise. “He is one of the best in the world. Look at what he did at Fox Searchlight.“

Indeed, Rice’s successes at the indie film darling have been well recognized: under his watch, Searchlight released some of its highest grossing, critically successful films including Slumdog Millionaire and Little Miss Sunshine. People who have worked with him said Rice has a knack for identifying and backing projects that others passed on, and his rise up Fox has as much to do with his Murdoch family connections as it does his talent. His accomplishments at Fox Searchlight led to him being promoted to oversee the company’s TV assets.

But it is not lost on Hollywood insiders that Rice has struggled to acclimate to the more buttoned-up culture at Disney.

“Peter is a little reluctant to get his hands dirty,” one former colleague told The Daily Beast. “He isn’t overwhelmingly happy there.” A former Disney executive added: “This is about two very different cultures. [Peter] was wildly successful at Fox. I have a lot of admiration for him. What you are seeing is a culture clash playing out.”

Read more at The Daily Beast.

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