Peacock pays $5.2 mil-per-seg to keep Crane skein

“Frasier” isn’t going anywhere: NBC and Paramount Network Television have struck a $374 million renewal deal that will keep the Kelsey Grammer-led laffer on the Peacock web until May 2004.

Pact, concluded late Monday, ends a protracted, at times acrimonious, negotiation, as well as weeks of media speculation about whether the skein would jump to another network.

In the end, NBC agreed to pay Par about $5.2 million an episode to keep “Frasier,” a bump of less than 10% over the roughly $5 million-per-seg license fee the net now shells out. That fee could go up or down by roughly $100,000 per episode depending on how well the series continues to perform in the ratings, insiders close to the talks said. Par is contracted to produce 24 episodes per season over three years.

Peacock also will get the right to rerun more “Frasier” segs a third and fourth time as part of the deal. Par will get at least three pilot commitments from NBC, though no on-air guarantees.

There’s no contractual assurance “Frasier” will remain in its 9 p.m. Tuesday timeslot, but Peacock brass said they had no plans to move it.

NBC West Coast topper Scott Sassa said the deal locked in one of the Peacock’s signature series and thus was worth its high price.

“It’s a show that really represents the heart and soul of what NBC is about,” he said.

Still, by renewing “Frasier” for three more seasons at such a high price, NBC execs are taking something of a gamble, betting the show — now in its eighth season — will be able to maintain its status as a ratings powerhouse through the life of the deal. That’s what happened to “Mad About You” after NBC agreed to pay the show’s two leads $1 million per seg to return for a final season.

The alternative, however, was less appealing: Giving up one of the web’s most successful comedies.

“Frasier” is a top-five laffer in both viewers and adults 18-49; it also has dramatically increased NBC’s ratings in the 9 p.m. Tuesday slot since moving back to the time period last fall. Without the skein, the Peacock would have had to rebuild the night from scratch, just as the web is being attacked on Thursdays by the CBS combo of “Survivor” and “CSI.”

NBC Entertainment topper Jeff Zucker said he’s not worried about “Frasier” taking a ratings or quality nosedive. “We don’t look at it as a risk,” Zucker said.

Grammer, who had wanted a three-year deal to ensure that “Frasier” would match the 11-year run of parent skein “Cheers,” said he didn’t think maintaining the show’s level of writing would be a problem. Thesp said he’s happy “that things have worked out.”

“I spent the past month biting my nails,” he quipped. “When I heard (the deal was done), I got off the phone and jumped up and down.”

Paramount Television Group chairman Kerry McCluggage said securing a three-year pact, rather than a shorter deal, was “an important factor” in the talks.

“We wanted the network to be committed to this show,” he said. “We’re confident we can thrill an audience and continue to make them laugh for three more years.”

Obstacles to pact

While the essential framework of the deal had been hammered out by last week, negotiations hit a road bump Friday over two smaller matters.

Par execs, worried about the impact of the potential WGA and SAG strikes, wanted a provision in the deal that would have required NBC to pay the studio full value for all 24 episodes skedded to be produced next season — even if there’s a work stoppage. In the event of a protracted strike — and thus a shortened 2001-02 season — Peacock brass did not want to be left with, say, a dozen extra original episodes of “Frasier,” which would have to be squeezed into a four- or five-month season or during the summer.

Negotiators for the studio didn’t feel Par should lose out on tens of millions in syndie revenue because of a strike. Pricetag the studio had agreed on was calculated on the basis of a 72-episode commitment over three years; loss of 12 episodes to a strike could cost Par tens of millions.

In addition, Par’s deal with the “Frasier” cast ensures thesps will be paid even in the event of a strike, industry insiders said. That means the studio would lose not only potential profits but also actual cash if it ends up making less than 24 segs of “Frasier” next season.

Two sides ultimately worked out a compromise: In the event of a strike, NBC will pay full value for the segs it needs to complete the rest of the season. Par then may elect to keep “Frasier” in production over the summer, selling those segs produced to NBC at a substantially reduced rate. Studio, however, must make sure “Frasier” is back on a normal production schedule by fall.

Matter of principals

Another issue that held up talks: Whether Par could guarantee that all five “Frasier” principals would remain with the series for the next three years. NBC wanted the right to opt out of its deal if any of the leads left the series; Par was willing to guarantee only that Grammer and David Hyde Pierce would stay put.

NBC finally agreed to a compromise on the so-called the essence issue: The net’s license fee will be reduced in the event that co-stars Jane Leeves, John Mahoney or Peri Gilpin ankle. Grammer and Pierce still are must-have under the terms of the deal.

Par Network Television prexy Garry Hart said he believes the pact is fair to all sides.

“At the end of the day, NBC made the deal they were comfortable making,” he said. “It wasn’t as if they were jammed.”

Talks under microscope

Unlike most series renegotiations, which fly under the radar until a deal is done, the “Frasier” talks were conducted under the glare of the media spotlight (along with those for “Buffy the Vampire Slayer” and “Dharma & Greg,” hit series that also are up for renewal this year).

But the series renegotiation for “Frasier” wasn’t typical. Given Viacom’s ownership of the series (through its Paramount Network Television division), corporate sibling CBS couldn’t be ruled out as a potential suitor for the skein. Even if a move was unlikely, such a threat put pressure on NBC to do a deal, perhaps at a higher price than the web would have wanted.

Par execs said at least two other webs — insiders say CBS and ABC — were seriously interested in snagging “Frasier.” But while Par had the right to shop the show around after NBC’s exclusive negotiating window ended last Friday, studio never took that step.

“Paramount thought it was important to keep the show on NBC,” one insider close to the talks said.

With the “Frasier” deal done, NBC execs next will turn their focus to a pact renewing Thursday laffer “Just Shoot Me.” Talks are ongoing with the show’s studio, Universal; however, insiders said the web and studio are still far apart on price.

(Michael Schneider contributed to this report.)

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