Two studios agree to extended license terms
In what could lead to a massive shift in industry practice, Twentieth Century Fox and Universal are the first two studios to grant ABC’s request for 5-5-1/2-year license fee terms on two TV shows for next season.
Twentieth has agreed to a five-year license fee deal — one year longer than the industry norm — on the new ABC drama “Nothing Sacred,” while Universal TV agreed to a 5-1/2-year license fee on ABC’s newest midseason sitcom, “Something So Right.”
That means Universal and Twentieth will have to wait an extra year before renegotiating higher license fees for those shows, if they stay on the air that long.
Sources say Twentieth acquiesed to the five-year term for “Nothing Sacred” only after ABC’s parent company, Disney, promised to give reciprocal consideration the next time it sells a show to Twentieth’s sister network, Fox Broadcasting Co.
Right now, Disney has no shows on FBC, but sources say the studio is closing a deal for a half-hour comedy pilot at Fox, and the studio’s two-hour movie “Steel Chariots” is also a back-door pilot at the network.
In what may or may not be a related move, ABC has also ordered Twentieth’s midseason comedy “Raise the Roof,” a sitcom that ABC Entertainment president Jamie Tarses ordered for midseason back in May, but was later forced to rescind.
ABC, Twentieth, Universal, Disney and Fox all declined comment for this story.
In general, license fees on new shows are four years in length on fall series and 4-1/2 years on midseason shows. Typically the fees, which increase slightly each year, do not cover the cost of producing new shows.
Studios rely on large increases at the end of the four years for their successful series in order to help cover those losses. If “Nothing Sacred” or “Something So Right” become hits, Twentieth and Universal won’t be able to ask for higher fees or take the shows to other networks until they’ve been on the air at least five years.
However, sources say, the two studios were able to secure slightly larger than normal yearly increases in the license fees as part of the deals. Sources would not disclose license fee amounts or yearly increases, but typically a new drama will command fees between $1 million to $1.5 million, while comedies command $600,000 to $750,000.
ABC has been asking every studio it does business with to grant it longer license fee terms, but Universal and Twentieth are the first to agree. Now that they have, it could open the door for other networks to demand similar longer-term deals.
Because Twentieth is owned by the same company as FBC, Twentieth was able to negotiate reciprocity for Fox on a project-by-project basis when it does business with Disney.
Universal, on the other hand, had little choice but to grant ABC’s request for a longer deal, given that NBC had canceled U’s sitcom “Something So Right,” and ABC had already struck a deal with one of the lead actors.
Twentieth’s “Nothing Sacred” debuts Thursdays at 8 p.m. this fall, and “Something So Right” has not yet been assigned a timeslot or debut date.
Separately, Twentieth’s “Raise the Roof” which took a circuitous route to getting ordered, also hasn’t been given a midseason berth.
Also known as the Burns Brother project, “Raise the Roof” is executive produced by Brian Burns, Edward Burns and Eric Gilliland, and it stars Gerry Red Wilson, Kellie Overbey, Nick Sandow and Molly Price. The sitcom is about a working-class couple in Queens and their neighbors.