With the U.S. economy still flat on its back, Warner Bros.’ new movie package could end up fetching a gaudy $ 2 million a title in a deal furthering the company’s innovative strategy of selling simultaneously to syndication and ad-supported cable.
The bundle includes an unusual number of box office hits: “Robin Hood: Prince of Thieves,””Batman Returns,””Lethal Weapon 3,””The Last Boy Scout,””Doc Hollywood” and “JFK.”
“This may be the strongest package we’ve ever brought to the marketplace,” says Ed Bleier, president of Warner Bros. pay TV, pay-per-view and cable.
Despite its strength, TV stations would’ve bridled at letting cable share movies in such a cooperative arrangement in the past. “But the bottom line is that TV stations won’t get a crack at buying these movies if cable doesn’t get involved,” says John Rohr, VP and director of programming for rep firm Blair TV.
Sources say Warner will maximize its revenues by following the sales strategy it used for pic deal “Volume 30,” which went to Lifetime for a basic-cable run and to TV stations in syndication within a five-year license term.
The movies shift back and forth between Lifetime and the stations over the course of the five years, with Warner making sure that Lifetime got the women-oriented pictures (“Driving Miss Daisy,””Reversal of Fortune”) first for the sweeps and that the stations got first sweeps dibs on action titles (“GoodFellas,” Clint Eastwood’s “Rookie” and Steven Seagal’s “Out for Justice”).
Because Warner’s new package includes more action-adventure titles than “Volume 30,” the cable network that Warner is targeting–USA–may get a harder pitch than Lifetime.
But one source says USA has already ponied up more than $ 200 million for a big backlog of recent theatricals through output deals with its owners, MCA and Paramount, and with 20th Fox and Buena Vista.
The Nielsen results from the cablecast of some of those movies are just coming in, but it’s too early for USA to draw any conclusions about the wisdom of continuing to stock up on theatricals.
Another potential problem for Warner is that, with theatricals, USA “tends to prefer exclusivity,” says one executive who requested anonymity.
And the marketplace is sending mixed signals.
“There’s a heavy amount of supply out there right now and, because of the way the economy is going, a buying mood that’s not particularly aggressive,” says Dennis Miller, executive VP of TNT.
Miller doesn’t buy the newer packages, leaving that strategy to TNT’s sister cable network TBS, which has picked up a number of movie bundles as part of a consortium involving such broadcast groups as Tribune and Gaylord.
Tribune and TBS are closely allied because Tribune’s WGN Chicago, with about 35 million cable subscribers throughout the U.S., is the second most widely circulated superstation behind TBS, which reaches more than 58 million subscriber households.
TBS and WGN haven’t bought any of the recent-movie Warner Bros. packages because Warner will not waive the syndicated exclusivity rule.
With the Tribune stations out of the picture, most industry analysts say Warner will target KCOP Los Angeles and WWOR New York as the linchpin stations for its new package (which also includes “Other People’s Money,””Don’t Tell Mom the Babysitter’s Dead,””Ricochet,””Final Analysis,””Freejack,””Memoirs of an Invisible Man,””Curly Sue,””Switch” and “The Mambo Kings”). These stations signed up for the “Volume 30” package.
Warner’s asking price for the new package will be at least $ 500,000 a title from a basic cable network, which will get a five-year joint-sharing arrangement with TV syndication.
From TV syndication, Warner hopes to pocket about $ 1 million a title from cash license fees covering six runs of each picture over five years. In addition , the studio would collect another $ 400,000 or so a title in advertising revenues from an all-barter play (usually two showings within a 10-day period) that the station would schedule before the cash runs start and even before the first cable runs start.
By these calculations, Warner would be within reach of its $ 2 million-a-title goal.
So while Warner would come out handsomely, some observers wonder if this new extra basic-cable window (coming after the post-theatrical windows for homevideo , pay-per-view, pay cable and, for many of the titles, two broadcast-network runs in prime time) works out so well for the TV stations.
“I’d caution my station clients to look very carefully at the Warner deal,” says Jack Fentress, VP of programming for the Petry National rep firm. “Their rating numbers are bound to be weaker” as a result of the sharing arrangement with cable.
“Sometimes I feel as if the play on my TV stations is the last stop before the picture goes on to its last rites in the movie graveyard,” adds Tom Bumbera, a programming executive with the Seltel rep firm.