Mr. BIG

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In late summer, Doug Herzog, the new president of USA Network, was in his usual jaunty form-somewhere between a favorite uncle and Catskills-era showman. Less than three weeks later, the events of Sept. 11 had affected Mr. Herzog as they had so many others: His boundless energy, comedic tendencies and bonhomie were missing.

"It was heartbreaking on every level to me," he said.

When it came to running the network during those funereal days, USA pulled some movies with perhaps inappropriate content, but tried to provide a diversion by continuing with its scheduled programs. "We were sort of happy to bring a respite from everything else that was going on and we had to look at that as our job," Mr. Herzog said.

Now, with the slow economy squeezing the media business, industry-watchers are keeping a keen eye on the 42-year-old Mr. Herzog, a proven hitmaker, to see how he performs the job of recreating and defining USA. It's the second-most watched cable network in primetime, but has seen its rating drop some 18% this year.

Mr. Herzog has a reputation for making the small screen a big profit center. Before he joined USA-and excluding his rocky tenure at News Corp.'s Fox-he was known as an executive with an instinct for developing hit shows that not only were successful in their own right but served as foundations for cable blue-chips MTV and Comedy Central. And even as he sat at home in Los Angeles, jobless after an unpleasant exit from Fox in March 2000, that reputation stuck.

"Doug was on every A-list in town when people wanted to start something or relaunch something," said his former boss Judy McGrath, president of the MTV Group.

Realizing the network faced a new landscape and a major challenge in preserving, much less growing, the $560 million-plus in ad revenue it generated last year, USA brass turned to Mr. Herzog to spearhead programming. But USA is decidedly different than Mr. Herzog's previous destinations. Unlike the younger-skewing MTV or Comedy Central, its target audience is older, and if Viacom's MTV and AOL Time Warner's Comedy Central had cachet in New York and Los Angeles, USA's bread-and-butter is between the coasts. So how will Mr. Herzog look to resuscitate a network badly hurting in the hip department? He uses the word "big" a lot these days.

Mr. Herzog wants "big" sports events, "big" movies, "big" pop culture events and "big" original series. But while "big" sounds impressive, it is a murky word and sheds light on the ambiguous position USA occupies within the growing TV universe. The mini-resurgence of the broadcast networks, thanks to shows such as "Who Wants to be a Millionaire?" on Walt Disney Co's ABC and "Survivor" on Viacom's CBS, along with the success of genre-based cable networks such as the Food Network, have left broadly aimed cable outlets such as TNT and TBS, TNN, FX and USA stuck in between-without the reach or ratings of a broadcaster and without the targeted programming of a niche channel. Add to the mix the faltering ad climate and USA's hurdles become higher.

"I would say Doug Herzog has a tough job," said Barry Diller, chairman-CEO of USA's parent company USA Networks, Inc.

Media buyers seem to agree.

Mr. Herzog "knows they need to do something," said Dan Rank, managing director of Omnicom Group's OMD USA, New York. "They just can't keep doing what they're doing and do well."

Mr. Herzog settled in at USA just as the other general cable networks moved toward a niche mentality. AOL Time Warner has tried to neatly sum up its TNT lineup under the tag "We know drama," while Viacom's TNN has spun itself as a hub of pop culture. But Mr. Herzog believes the era of the general cable network is far from over.

"They're all trying to brand themselves in sort of a niche fashion and pretend they're something they're not," he said. "We're actually going in another direction: We're big, we're broad, we're unapologetic about it."

Mr. Herzog wants to keep sports-mostly tennis and golf and not "the bats and balls business"-as an anchor. USA intends to do whatever necessary to ensure the U.S. Open, its premiere tennis event and staple for the network since 1984, stays there after the since 1984, stays there after the current contract expires next year, Mr. Herzog said. The network is also bidding to keep the French Open and recently completed a deal with the PGA Tour to more than double the amount of golf events where it will show the first two rounds.

But what's the link between the French Open and re-runs of "Nash Bridges"? Therein lies Mr. Herzog's principal challenge: to give USA an identity. Advertisers don't really have a clear idea of what to expect from USA, and what they associate with USA is not exactly must-see TV.

"They've become known for kind of trashy movies, sort of soap opera-ish type movies and people don't like that. We have Lifetime. We don't need USA to do that," said Kara Lazarus, senior VP-director of national broadcast, Cordiant Communications Group's Bates USA, New York.

"There's a saying that people watch a show, not a network," said Tim Brooks, a TV historian and senior VP-research at Lifetime. "That's less true in 2001 than ever. There are a whole lot of networks that people watch as networks. A definition of who you are is extremely important today and it's caught the broadcasters and the broad-based cable networks unprepared basically and they're trying to find ways to define themselves."

Ironically, the catastrophes of Sept. 11 and the ensuing wave of patriotism may benefit a network named USA, though it's no longer the only one with a flag in its logo. When Mr. Herzog and other executives made a list of USA's attributes last summer, "American" was included. And there was a feeling that more needed to be done to capitalize on that-though exactly what was unclear.

Since then, the network experimented with stars and stripes as images to spruce up its on-air look. In the coming months, outside branding agencies may devise other ideas. USA is conducting a pitch among a group of agencies to use Mr. Herzog's vision of a network with a momentous feel-and perhaps the patriotic zeitgeist-to come up with a new logo and a series of more contemporary on-air looks. The retailer Target has been an inspiration in that process. "There's an image where if you're going to buy toilet paper you figure you might as well do it there," Mr. Herzog said. "We're going to do something similar, where if you're going to watch `Indiana Jones' again, you'll want to do it on our network."

OUT OF THE RING

Last fall, USA lost part of its identity when the World Wrestling Federation defected to Viacom's UPN and TNN after a court battle. Wrestling was a huge ratings driver, though not necessarily a profit center (the WWF itself sells the bulk of the ad time) or an easy demographic fit (WWF's core audience consists of teen-age males).

For Mr. Herzog's part, he's more than happy USA is out of that ring. But the network's mix of original and off-screen movies, off-network dramas and random events such as surprise ratings hit Westminster Kennel Club Dog Show leave Mr. Herzog with a smorgasbord that lacks a unifying theme.

"USA until now has operated as a bunch of separate parts and we are greater than the sum of our parts," said Michele Ganeless, newly hired by Mr. Herzog as USA's exec VP-general manager. "We have to get out there and own the fact that we have big movies and big events, soon we'll have big series and we have big sporting events. But we're talking about each individual piece separately and we need to talk about them as a whole."

As USA searches for that missing marketing link, Mr. Herzog is hard at work on a more difficult task: finding an original signature show for the network that will get people talking. "It's the one we haven't got," Mr. Herzog said. "But I've been there and I think I know how to get there."

Mr. Herzog is referring to his previous tenures at MTV (1984-95), where he put the smash reality show "The Real World" on the air in 1991 among other hits, and then Comedy Central (1995-98), where he developed "The Daily Show" and "Win Ben Stein's Money" and green-lighted the controversial "South Park."

But those were targeted cable networks that had no aspirations to be all things to all people. So the USA job is at once the hardest and easiest position Mr. Herzog has held in his two decades in TV. In his favor, USA already offers a solid ratings base and full distribution in 80 million-plus homes.

In 1998, Mr. Herzog's reputation as a hitmaker had spread and the ultimate cable guy took a plunge into the shark tank of broadcast TV. News Corp. executives hired Mr. Herzog to serve as president-entertainment at Fox to bring new comedies and other scripted shows to a network with a faltering lineup. It seemed like a good fit: Fox had built a reputation as a younger-targeted and edgy broadcast network and Mr. Herzog had a history of appealing to its core audience. But by the time he left in March 2000, he was bruised and battered by low ratings.

Mr. Herzog is quick to defend his short tenure at Fox, which he labeled a personal disaster. He said he had three separate bosses in a little over a year-David Hill, Peter Chernin and Sandy Grushow-and never found the right chemistry. A Fox spokesman, Joe Earley, said the network had no comment on Mr. Herzog's tenure.

He did leave Fox with one hit, "Malcolm in the Middle," and the show's success later brought Fox its current president, Gail Berman, who headed its production company that developed the show.

Mr. Herzog's stumbles at Fox did not deter Stephen Chao, USA Cable's president, who spoke with Fox executives before bringing him to USA. "They had a lot of respect for him as a programmer," Mr. Chao said.

Taking shape

Mr. Herzog's specific programming plans are still taking shape at USA. He wants to feature four signature events a year: the Westminster dog show; a film awards show; a music-based awards presentation; and an undetermined fourth. On the original series front, a movie pilot about a detective with obsessive compulsive disorder, "Monk," could lead to a weekly series. In January, "Survivor" producer Mark Burnett's "Combat Missions," where actual Green Beret-types will challenge each other in military exercises such as hostage rescues, is scheduled. The show, which has already been shot, may undergo some tinkering since some of the contestants may now be participating in actual military missions in the U.S.'s battle to combat terrorism.

In December, USA launches a game show called "Smush" where contestants are tested on their ability to rapidly make word associations. USA also is developing a nightly topical game show featuring questions on major news stories from that day. Movies, a critical part of whatever connection USA has built with viewers, are another area where Mr. Herzog will attempt to bring a new look. So far, he has launched "Bonzai Movie Friday" to create a fresh environment around an old movie; a show from British TV that parodies Japanese games shows is aired in segments during breaks.

"I think he's a risk-taker in many ways," said Chris Geraci, senior VP-national TV buying at OMD, but "it remains to be seen what kinds of risks he can take with the sensibilities of such a broad audience."

USA doesn't have far to go to begin touting itself as the No. 1 primetime network on cable, trailing only Lifetime in the race for overall household ratings in the time block so far this year. Lifetime leads with a 2.0 rating (1.6 million homes), compared to a 1.8 at USA (1.5 million homes).

"We're referred to in the press as either Barry Diller's USA Network or the slumping USA Network and the latter's fine with me because we're only a half a game out of first place," Mr. Herzog said.

Contributing: Mercedes M. Cardona

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