While NBC and CBS used their schedule-setting power this week to negotiate ownership stakes in some new and returning series, ABC was able to squeeze three studios for both longer-than-usual five-year contracts and lower license fees.
The behind-the-scenes wheeling and dealing of the networks this week has attracted more attention than the series themselves. Some studio executives even wondered aloud whether financial considerations suddenly have more to do with shows getting ordered or renewed than their quality.
Columbia TriStar, 20th Century Fox and Studios USA had already agreed to five-year license-fee deals on new series with ABC, which is longer than the standard four-year deal. This means that for five, rather than for four, years the studios have to live with built-in license fee increases and cannot ask for more money under the threat of taking a hit show elsewhere.
Right before ABC set its schedule, though, the network informed Columbia, Studios USA (formerly Universal TV) and 20th that it would only order their shows if they agreed to reduce the pre-negotiated license fees on their series by $100,000 per episode.
The three studios reluctantly agreed to decrease their license fees anywhere from $50,000 to $100,000, sources said. The shows affected were Studios USA’s “Brother’s Keeper,” which landed on ABC’s Friday lineup, Columbia’s “Cupid,” which wound up on ABC’s Saturday schedule, and “Strange Days,” which was ordered for midseason and may wind up in the Monday 10 p.m. timeslot after “Monday Night Football” ends.
ABC attempted to squeeze a similar deal out of Warner Bros. for the new series “Mr. Chapel” (formerly “Vengeance Unlimited”), but Warner Bros. refused. The show was still ordered and placed Thursday night at 8 p.m.
Neither Columbia nor Studios USA owns or is partnered with a broadcast network, so neither had much of a choice but to give in to ABC’s demands or see their shows nipped in the bud.
Although 20th Century Fox always has more leverage because it’s the sister studio to Fox Broadcasting Co., sources say 20th wanted to make sure ABC announced a midseason order for “Strange Days” so the studio can sell the show internationally starting next week. In return for that absolute pickup, 20th agreed to lower the license fee.
Sources at both 20th and Columbia point out that ABC’s original license fees for their shows were unusually high compared to fees paid by other networks, so the decrease won’t hurt so much from a financial standpoint.
Neither ABC nor any of the studios involved in these negotiations would comment.
However, the demands demonstrate what one studio source called “bad faith.” While the networks have the leverage this week because of their power to say yes or no to borderline pilots, the studios plan to stick it to ABC as soon as they have an ounce of leverage.
“We’ll get it back and then some,” said one studio source.
The no-holds-barred negotiating that resulted in NBC getting a financial stake in “NewsRadio” and CBS getting ownership in the new comedy “King of Queens” at the 11th hour is the result of several factors.
The networks are feeling the pinch from rising programming costs and declining ratings, and they are anticipating a soft up-front market. As a result, they are trying to reduce costs (ABC) and find new sources of revenue through series ownership (NBC and CBS).