Nets, Studios On Knees In License Fee Melees

The television industry’s mean season has begun.

As revenues continue to shrink for producers and networks alike, negotiations between the camps have reached a new pitch of confrontation.

Producers of toprated programs are attempting to extract huge concessions from hit-starved network execs, who, in turn, are squeezing studios with cutbacks on pilot orders by as much as 33% and rock-bottom license fees for new series.

“This has been the ugliest pilot season,” says one top studio exec. “Every negotiation is brutal. The networks are bleeding financially, so they’re playing major hardball with license fees.”

“I think we’re going to see a lot more streamlining,” said Gary Randall, Orion’s prexy of production. “As the networks buy fewer pilots and more inexpensive reality shows get made, there’s going to be a lot less opportunity for writers, producers and directors. We’re heading into lean times.”

In the pitched warfare between studios and networks, NBC this week suffered the equivalent of a major Scud attack in its negotiations with Paramount for a 10th season of “Cheers.” The studio reportedly asked NBC for an unprecedented fee of nearly $120 million for another season, an amount that far exceeds the record-breaking $2 million per episode NBC spent on “The Cosby Show” this year.

While NBC execs acknowledge the show’s tremendous value as the centerpiece for their winning Thursday-night lineup, they worry that acceding to Paramount’s demands will invite equally aggressive bargaining from producers of the other shows whose return is crucial to NBC’s ebbing ratings lead.

NBC still faces expensive bargaining with the Carsey-Werner Co. over “The Cosby Show” and “A Different World,” and with Witt-Thomas over “The Golden Girls” and “Empty Nest.”

Industry insiders say NBC is far more likely to hold the line letting “Cosby” go next year if Carsey-Werner’s demands continue to escalate. The significant defection among young viewers after Fox moved “The Simpsons” into the same time slot robbed “Cosby” of its aura of indispensability.

However, the “Cheers” producers “are really in the catbird seat now,” remarked former network topper Fred Silverman. “If NBC makes a preposterous deal for that show, it will take about a second and a half for the word to reach other producers around town.

“If CBS is willing to pay a billion dollars for football,” Silverman said, “then maybe $120 million for Cheers’ isn’t so bad.”

If Paramount’s renewal price for “Cheers” gets too high, NBC may decide to walk away, NBC Entertainment prexy Warren Littlefield told the Intl. Television & Radio Society in New York Friday. Littlefield compared the negotiations for “Cheers” to NBC’s decision to give up baseball a year ago.

“We desired to continue with baseball,” said Littlefield. “But it got to a point where we had to move on.”

ABC Entertainment prexy Robert Iger agreed with Littlefield on keeping license fees down and said that the studios were taking the position that only the studios have the right to profit from a program’s success. “This is a very dangerous time for all of us,” Iger said. “The business, in terms of stability, is going to crumble.”

Paramount insiders doubt that the show will end up at another network. “CBS is getting very tight with money, ‘Cheers’ doesn’t really fit ABC’s self-image and the networks don’t like to raid each other’s shows, anyway,” said one Par insider.

“Paramount is playing a power game with ‘Cheers,'” opined one studio head. “They’ll reach an agreement eventually, but the amount they’re going to get will only end up taking money away from other shows.”

In the absence of new hit shows even approaching the popularity of “Cheers,” most studios find themselves without comparable bargaining power to wield against the networks.

“The whole television industry has become a pressure cooker,” remarks MGM/UA Television CEO David Gerber. “On the one hand, the networks are trying to be tougher for their own legitimate financial reasons. On the other hand, they demand that we bring in expensive writers and talent.”

Veteran producer Dean Hargrove notices the networks are eyeing pilot deals much more cautiously these days, afraid of making hasty commitments. “They’re taking a second look at everything, and they’re more inclined to stick with what they already have,” he said.

Studio execs complain that the dual pressures of network penury and rising production costs make a new wave of belt-tightening inevitable. In recent weeks, small staff cuts already have taken place in Paramount and Orion’s tv divisions.

Tv studio chiefs deny that major staff cuts are on the way in their community. “There isn’t that much fat to cut,” according to Gerber.

But Silverman foresees a permanent change in the corporate cultures of the tv industry. “It’s going to be a gradual scaling down,” he predicted. “These corporations are, by their natures, bloated. You’ve got to be lean and mean in this environment.”

Richard Huff In New York Contributed To This Report.

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