NBC and Fox’s Twentieth TV are in talks to dissolve the syndie programming partnership News Corp. inherited last year with its purchase of New World Communications, NBC president and CEO Robert Wright has confirmed.
“It’s a classic case of a new partner comes in, assumes the position of the old partner but has different objectives,” Wright said Wednesday in an interview with Daily Variety. “Probably the ultimate outcome of this is that (Twentieth) is going to get out of the production (venture) and will sell us their share or give us their share.”
Twentieth TV officials declined to comment for this story.
Details of the negotiations were sketchy Wednesday, particularly as to the value either side has placed on Twentieth’s stake in the partnership. Sources say NBC has been shopping for a new distribution partner on the syndication side for at least a month.
Universal TV, King World Prods. and Warner Bros. are said to be the leading contenders, but it’s unclear if the new partner would take on the distribution of “Access Hollywood,” the first syndie strip launched under the aegis of the NBC/New World pact last fall.
And it’s also uncertain if NBC is looking to restructure the original 10-year deal inked with New World in 1995, or transfer outright the programming commitments now held by Twentieth to another distribber. Reps for Universal, King World and Warner Bros. declined comment.
Wright wouldn’t offer a timetable for the negotiation of the split with Twentieth. Other NBC sources said the process of extricating Twentieth from the complex agreement could take anywhere from two weeks to two months.
A high-ranking Fox exec said the two sides — fierce competitors in other areas of the TV biz — have amicably agreed to go their separate ways after a rocky first season working together on “Access Hollywood.”
While the NBC stations have been patient with the freshman strip, low ratings have prompted downgrades on most of the former New World stations now owned by Fox.
Whatever happens with Twentieth and the Fox O&Os, “Access Hollywood” is understood to have a secure future for the coming season on the NBC O&Os. NBC brass say they’re committed to giving the entertainment magazine time to find its audience. What’s more, sources say NBC doesn’t have any projects far along enough in development to replace the half-hour strip.
Back in 1995, the original NBC/New World partnership was rooted in the strength of their respective station groups and the edge those stations would give the partners in launching new syndie shows.
The deal, spearheaded by NBC TV Stations president John Rohrbeck, also was prompted by the affiliate defection scare New World sparked among the Big 3 networks in mid-1994. New World’s billionaire owner Ronald Perelman and News Corp.’s Rupert Murdoch jolted the broadcasting biz by announcing plans to convert 10 of New World’s 12 Big 3-affiliated stations to Fox affils in exchange for a $500 million investment and programming commitments from News Corp.
NBC offered New World the 10-year programming commitment as an incentive to seal longterm network NBC affiliation deals with New World’s remaining stations in San Diego and Birmingham, Ala. (which NBC has since bought.) In lieu of NBC paying significantly higher network compensation fees to the stations, the two sides agreed to jointly fund new syndie productions.
At the time, NBC and New World stations covered nearly 40% of U.S. TV households — affiliation not-withstanding — with no overlapping markets between the groups. The dynamics of the deal changed markedly for NBC, however, when News Corp. entered the picture last July with its $2.5 billion buyout of New World.
Fox does have stations that compete with the NBC O&Os in New York, Los Angeles, Chicago and other major markets. And unlike the situation with New World, the Fox O&Os are pursuing a vastly different programming strategy.
The NBC-owned stations, like most Big 3 affils, run firstrun fare in the hour leading into primetime, while the Fox O&Os have had great success recently with off-network sitcoms such as “Home Improvement” and “Seinfeld.”
As a result, NBC is said to be looking to avoid a similar conflict in the future by striking a deal with a strong distribution entity that doesn’t have an inhouse station group.
NBC, New World and Twentieth have collectively invested an estimated $40 million in the first season of “Access Hollywood,” but sources say NBC shouldered the bulk of the production costs under the terms of the original agreement with New World.
According to sources familiar with the deal, the original New World/NBC agreement gave each partner three shots over the 10-year period at launching a strip. The side that came up with the idea for the show — NBC in the case of “Access Hollywood” — would fund most of the production.
Industry veterans say it’s conceivable that NBC wouldn’t have to sign an outside distribber to handle “Access Hollywood” for the coming season. The show is already cleared in more than 85% of the country for season two, and NBC’s inhouse sales division could easily absorb the national advertising sales currently handled by Twentieth, observers noted.