Cable Embraces Off-Net Hours

These are happy days for distributors looking to chalk up healthy revenues from the sale of rerun hours to cable networks.

Just a couple of years ago the only cable networks willing to lay out competitive dollars for off-network series were USA and Lifetime. Now there are five more cable channels that are ready to pony up big bucks for a rerun they think will have an impact on their schedule: TNT, the Family Channel, A&E, E! Entertainment Television and FX.

“Off-network shows are the backbone of the lineups of many cable networks,” says Gerry Farrell, executive VP of marketing and strategic planning for Twentieth TV. “These series can help a network keep its brand identity, or create a new identity.” He cites the longrunning “L.A. Law” reruns on Lifetime as a signature show that helped to solidify the network’s image among young adults. E!’s recent purchase of “Melrose Place” off network was characterized as a way for E! “to get itself on the map” and help increase its circulation, which is only about half the reach of established networks like ESPN and CNN.

Farrell and Twentieth’s VP and Eastern regional manager Victoria Quoss, the executives most immediately concerned with the state of the marketplace for rerun hours, will be calling on the seven cable-network buyers early next month to sell the off-network rights to “Picket Fences.”

USA is running the numbers on “Picket Fences” to try to gauge what kind of an audience it would get if it ran as early as 7 p.m., says Rod Perth, president, entertainment, USA Networks. The show is issue-oriented and controversial, which is why CBS keeps it at 10 p.m.

But Farrell says “Fences” is the second highest-rated series on CBS’ primetime schedule among adults 18 to 49, beaten only by “Murphy Brown.” USA is searching for an off-network show that delivers younger demos because its highest-rated rerun strip, “Murder She Wrote” at 8 p.m., tends to corral a disproportionate share of its audience from adults over 50.

Sources say Lifetime is ready to talk seriously with Twentieth about “Fences” because of the young-women appeal of the content, the strong writing by David Kelley, and the relatively limited audience for any network show on a Friday, the night when the fewest people are watching TV. Although “Fences” is up from a 9.7 rating for the first five months of last season to a 10.2 rating so far this season, it manages only a tie for 56th place among all primetime series (Sept. 19,1994 through Feb. 5,1995).

Another potential bidder for “Fences,” TNT, illustrates the way cable-network buyers can emerge almost overnight. TNT has transformed itself from a channel made up almost exclusively of movies and sports to one of the most active users of off-network series. Except for a two-hour Western movie at 4 p.m., TNT now schedules rerun hours nonstop from 11 a.m., with “Knots Landing,” to 7 p.m., with “In the Heat of the Night.”

Bob Levi, executive VP of the Turner Entertainment Networks, says “cable networks are in the catbird seat” when it comes to off-network hours because “union residuals have made it too expensive for distributors to put the shows in syndication.”

These distributors will have to deliver about $100,000 an episode to the unions representing actors, directors and writers for a rerun series that goes first into syndication, not cable, Levi says. If that series landed a cable deal first, the residuals would make up only a flat 10% of the license fee of each episode. So, for example, as a result of Worldvision’s recent sale of “Melrose Place” to E! for a reported $225,000 an hour, the unions will get only $22,500 for each episode instead of the $100,000 per they would’ve pocketed if the show had made its way into syndication instead.

But TNT is looking less for a drama like “Fences,” Levi says, than for an action-adventure hour to replace “Heat of the Night” at 7 p.m. when its con tract expires in the fall of 1997. Although Levi declined to name specific shows he’s looking at, other sources say Columbia/TriStar’s “Walker, Texas Ranger,” Cannell Distribution’s “Hunter” and “Renegade,” Warner Bros. Domestic TV’s “Rung Fu: The Legend Continues” and “Lois & Clark,” and Rysher Entertainment’s “Highlander” are among the series on TNT’s short list.

The industry expects the Family Channel to reject “Fences” because the content could tick off many of the subscribers who dote on the channel precisely because it tends to shun sexy and violent programming. E! has said publicly that it probably won’t be participating in the “Fences” auction (Variety, Feb. 6-12). And with a projected asking price of about $325,000 an episode, the show will most likely be too rich for FX’s blood. Even though Fox owns FX, it couldn’t engineer a sweetheart deal with the channel because David Kelley, one of the studio’s most valued writer-producers (“Chicago Hope” is a Kelley creation), is a profit participant.

A&E’s interest in “Fences” is directly tied to the staying power of “Law & Order” reruns, according to sources. “Law & Order” has given the channel a strong Nielsen presence weeknights at 11 and may still be pulling in viewers well beyond the fall of 1996, when “Fences” becomes available as a strip.

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