King World Prods. stock finally had a reason to jump. Oprah Winfrey signed a new contract that will keep the talkshow queen associated with the syndication giant through the year 2000.

While the new deal keeps Winfrey at King World for an additional five years — her earlier contract was set to expire at the end of 1995 — that does not guarantee the show will be around that long. Winfrey has committed to do the hour through 1996, after which shewill decide on a yearly basis whether to continue. However, if she is going to do it, the pact guarantees that it will only be with King World.

“This is no different than the agreements that Johnny Carson and Bill Cosby had,” said Stephen Palley, executive VP/chief operating officer of King World. “It memorializes what reality is; we can’t compel Oprah to do the show.” But, Palley added, this is the longest contract King World has had with Winfrey.

There’s a five-year non-compete clause in the new pact, ensuring King World that Winfrey can’t take the show to another distributor.

If King World should merge or be acquired by another company within the next five years, that clause is void, making Winfrey a free agent.

But sources on both sides said that’s not a major concern for King World. As Oppenheimer analyst Jessica Reif pointed out, anyone who talks to King World would talk to Winfrey, since her show accounts for more than 40% of King World’s operating cash flow.

Both sides won key battles here. Under the new agreement, Winfrey, who already owns 1 million shares of King World stock, was given another 500,000 shares this week at 33 5/8 a share (the stock closed Friday at 38 7/8). Also, Winfrey’s reported $ 60 million annual earnings will rise substantially over the life of the contract.

Moreover, Winfrey received options to buy 250,000 shares a year each time she picks up her one-way option to do the show from 1997 through the year 2000.

The additional stock options will make Winfrey an even greater force within the company. After members of the King family themselves, she will be one of the largest — if not the largest — shareholders in the company.

King World, on the other hand, negotiated to keep the current profit-sharing plan in place for the first two years of the contract.

Under those terms, King World, according to Reif, will maintain about 43% operating profit from the show. In the third year of the contract, terms revert to a more typical distribution relationship in which King World gets a fee based on gross revenues.

Reif speculated that the fee will be in the 25%-35% range. King World’s Palley said even with the changes in the contracts, “Oprah” will still be the syndicator’s most profitable show in the year 2000.

That’s good news for those on Wall Street betting on a King World merger down the road. While the company declines to comment on speculation that it will be acquired by Capital Cities/ABC once regulatory hurdles are gone, analysts say a major risk to the value of King World’s stock has been removed.

King World will now turn its attention to negotiating new contracts with its TV station clients, who no doubt will help foot the bill for Winfrey’s new deal with the syndicator. “Suffice to say, we suspect that the price won’t be going down,” said one group owner.

But to give up “The Oprah Winfrey Show” is to give up a strong lead-in for local news. Rep firm Petry Television conducted a survey that showed stations dropping “Oprah” having a ratings average of 4.9 with a 14 share in November 1993 vs. a 13.3/39 in the November ’92 book.

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