I'm not sure about the source of the "Fix it!" quote from CBS. I've not been able to confirm it. But I honestly can imagine that the same network liaison who has made Earl's work on the show miserable continued to do so because I also know from one of the season 7 writers how aggressive that liaison still was and also oftentimes frustrated Howard Lakin.
From what I know, the Lorimar executives never had any problem with Jeff — on the contrary, they continued to hire him for other shows after "Falcon Crest". Would they have done that if they had actually thought he had done a bad job? The only thing they complained about was that he always demanded more budget per episode.
The ratings decline of "Falcon Crest" during the 1987-88 season was not a specific problem of the show, but also one of the genre in general.
I've spoken to most of the living main cast members, and, as far as I recall, none of them had a particular problem with Jeff and his storylines. The only things that were criticized a few times was that the focus shifted too much away from the small-town atmosphere in Tuscany during season 7 and that the rotating guest star storylines in the first half of season 7 were only a vehicle for stunt casting, but they all knew this was the compromise Jeff had made with CBS out of necessity to avoid the mandate to transform it into an episodic season with self-contained episodes. Some of the cast said they preferred Earl as showrunner because Earl would discuss character development with the cast beforehand (at least to a certain extent within the limitations dictated by Lorimar and CBS), but everyone knew that what Earl did in that respect was not the industry standard; it was nothing you could expect from a showrunner. I also spoke to various cast and staff members about the rumors that particularly Jane Wyman allegedly disliked Jeff's reign on the show or his storytelling, but those who had insight told me that this was not true; they all said that Jane loved working with Jeff. What is true, however, is that some of the long-time writers did not get along with Jeff.
It's always amazing that anything ever gets done -- correctly -- because there are always so many hands grabbing at the project in question, hands from so many corners, endlessly demanding you do this-or-that, whether it's a good idea or not (I assume it's usually not).
Someone once said that FC was "the most harassed Top 10 show in TV history," presumably by the network. I'm guessing that's a slight exaggeration, because so many series go through the same kinds of issues, one would think. (Even when they're hits).
You never really hear about DALLAS being all that bothered by CBS. Until 1988, when the network suggested that shift toward stand-alone episodes, possibly because the executives thought they might be able to resume re-running them in the summer so CBS could re-coup their investment -- as they paid to show their series' episodes
twice, and it had become evident by the mid-'80s that while audiences would re-watch a stand-alone episode of a favorite comedy or drama show 6 months after having watched it before, that audience was
not willing to re-commit to rewatching a multi-episode story arc they'd just watched 6 months before. So, the networks stopped airing nighttime soap reruns during the summer because all their ratings tanked.
DALLAS' Katzman navigated those waters by responding to CBS' suggestion in an enthusiastic manner, proffering horrible-sounding ideas (e.g., Bobby's highschool basketball coach returns and needs help) which appeared to scare off the network from their non-serializing recommendations. (Although, in retrospect, that couldn't have been much worse than what happened during the last two or three years of DALLAS anyway).
Then, as ratings cratered, CBS continued becoming more intrusive towards DALLAS in 1989, apparently suggesting an influx of new, young faces -- which never revives a dying show, but is
always a network's "go to" solution. (Was the new, dopey theme design the result of CBS' tinkering?).
Recently, I saw an interview with Robert McCullough who said that the way of getting around the tone-deaf suggestions/dictates from executives (network and/or studio, I suppose) was to feign enthusiasm for those dictates, make a small nominal pretense of compliance and, in a couple of weeks, those executives would forget and be off onto some other issue with some other show.
Which is what one would picture, as anyone who's ever worked in an office complex knows when dealing with knuckleheaded brass with terrible judgment -- unless that brass is too clever (in the wrong ways).
And McCullough was as skilled as any of them (except for maybe Davids Jacobs and Paulsen). He also admitted that executives "aren't always wrong" (which probably meant they generally are).
I don't recall hearing about DYNASTY being all that overwhelmed by ABC interference (except to "cure" Steven's homosexuality) until Season 6, when the post-massacre malaise and Krystle-in-the-attic for 3 months pushed the Neilsen numbers down, leading the network to
correctly demand a mid-season shut down in order to re-tool. (Unfortunately, some of ABC's demands were imperfect -- but that's what happens when grouchy Daddy gets home).
The KNOTS LANDING gang often joked that CBS was largely unaware that the series was even on their network. So they weren't bothered much.
Jane Wyman was quoted as having said FALCON CREST slipped after Season 7, so she indeed must have been alright with Freilich.