But H'wood dealmakers are uptight about Wright
There were happy faces on the Universal lot last week. The orphan studio finally got a new parent — its fourth in the last decade.The ebullience, however, was far from “universal” around Hollywood. Indeed, the complex deal creating a new $14 billion entity called NBC Universal will doubtless create a long list of winners and losers across the industry. Picking the entries on each list already is the prime guessing game in town. For example, Michael Jackson, the well-regarded Brit who left a cushy gig as head of Channel 4 to run Universal’s TV group, isn’t expected to survive the merger. Dozens, if not hundreds, of back-office jobs in administration and sales will likely be eliminated forever. And then there are the most obvious losers in this post-Franco-American romance: writers, producers and actors — along with the agents and managers who rep them. NBC, the one major web not aligned with an entertainment conglom, will now have a family full of corporate cousins to be satisfied — often at the expense of creative mandates. And while some would argue that Universal Network Television is just another name for Dick Wolf Prods., the fact is, the company was still considered by many to be one of the last significant indie studio players in town. Anyone who doubts that should talk to Paul Attanasio. The U-based scribe is overseeing a project for the studio that may be sold to Fox Broadcasting for a little more than $2 million when various penalties are included — an almost unheard-of sum for a pilot script these days. NBC was interested in the project, but ultimately passed because the bidding got too rich for its blood. If U had been in the Peacock fold, there seems little doubt where the series would have ended up. Likewise, no one expects NBC Universal to try to short-change Wolf out of even a single penny of potential profit from the “Law & Order” franchise. If they did, the feisty producer would sue in a heartbeat, following the lead of the makers of “Home Improvement,” “Homicide” and other skeins that have won court cases after being allegedly cheated out of backend coin. Still, at the very least, Wolf will no longer have the same checks and balances that come with having a studio partner. “The bottom line is, there’s now less competition,” says one top TV lit agent. “And competition, from both a creative standpoint and a business standpoint, is a healthy thing. I know this is old-school thinking, but you want a system where everyone can make money coming and going — but not just in one universe.” Of course, it’s possible the grumbling heard up and down Wilshire Blvd.’s agency corridor last week may have been a bit louder than needed. That’s because NBC insiders insist they’ve learned from the mistakes of past mergers. The new TV studio to emerge from the combination of NBC Studios and Universal, they insist, won’t exist simply to service the needs of the Peacock and its new cable cousins. Instead, the plan right now is to create a new production titan that will compete with Warner Bros. TV and 20th Century Fox TV– the current studio leaders. Jay Sures, co-head of television at UTA, says he’s trying to focus on the potential bright side for the creative community. “NBC Studios and Universal were sort of smaller players compared to Warner Bros. and 20th,” he says. “Now, they could become a real major player. And that means they’ll be spending a lot of money on development.” The merger will also create job opportunities for a number of execs. There’s already widespread talk of NBC Universal using its new superstudio to attract a big name to run it. Former ATG and Sony topper Eric Tannenbaum, who left the studio game to start his own already-successful production pod at WBTV, is being mentioned as a possible candidate for the gig. Ex-NBC Entertainment prexy Warren Littlefield’s name has also come up, while Touchstone TV prexy Steve McPherson likewise seems a logical choice. Other potential winners and losers:
- For Wolf, the news is mixed. He’s lost a studio ally, and his reps will have to work overtime to make sure the new company doesn’t try to pull a fast one on profit participation. But he’s gaining a powerful marketing machine with all the incentive in the world to expand his franchise even further. The “L&O” skeins are now the crown jewel of the Peacock. Talk of an “L&O” cable net doesn’t seem so far-fetched anymore, while the Peacock will now think twice about overexposing the skein on the network or not bringing back Wolf pet projects such as reality skein “Crime & Punishment.”
- It’s possible NBC Universal will ultimately stick with current studio chief David Kissinger — the man who helped engineer Attanasio’s boffo deal. But at the very least, Kissinger’s got some politicking to do and must survive several months of uncertainty.
- NBC entertainment prexy Jeff Zucker and network prexy Randy Falco will now have plenty of power to divide, while Bob Wright has yet another reason to stay actively involved in the Peacock’s affairs.
- USA Network chief Doug Herzog and Bravo/NBC alternative topper Jeff Gaspin have emerged as the leading contenders to run the conglom’s impressive cable assets. Figuring out who does what could be a headache for Zucker, however.
- Kevin Reilly, incoming head of development for NBC and the man who’ll likely replace Zucker as head of entertainment next year, gets lots of new friends at Universal. He also gets a longer honeymoon, since much of the focus at NBC over the next year will be on the merge.
- Relentlessly hyped mini-cabler Trio has become a media darling thanks to prexy Lauren Zalaznick. While her net could move to a whole new level with NBC’s PR and marketing muscle behind it, Zalaznick also has to convince the new Peacock exec team why it needs two culture and arts-driven cablers.
- Edgar Bronfman Jr., having come so close to taking back VUE himself in the final rounds, seems an obvious loser. But Bronfman arguably had nothing to lose in NBC’s victory except his pride. His financial backers will no doubt move on to new deals, while Edgar must find a new vocation to satisfy his yearning for media management. Most say a deal for Universal Music is still very much in the realm of possibility.
- MGM, on the other hand, has a lot to lose. Not only did the Lion lose its own chance to bolt onto a larger media entity and add valuable cable distribution channels, the valuation benchmark set by the NBC-VUE merger could takes the wind out of MGM’s sails and affect its share price.
- GE shareholders should be the big winners here. If the deal closes, GE walks away with choice assets at a very modest price: It’s effectively buying assets that Universal paid $28 billion to cobble together over the past three years, for south of $14 billion (and only around $4 billion in cash).
- InteractiveCorp. shareholders, if not Barry Diller himself, should also be cheering. This should focus the dot-commerce maven on his company’s primary pursuits rather than battling with the French over his vestigial interests in the business. Diller and IAC’s complex skein of financial holdings in VUE should be unraveled with cash or choice assets that can be plowed back into Interactive, where Diller has insisted all along they belong. However it’s eventually resolved, he’s in the catbird seat.
- While several VUE bidders already had movie studios, NBC does not. With no NBC-based film expertise, Universal chairman Stacey Snider’s position should be solid after the merger.
- U’s marketing department gets a much bigger toy chest to play with. Preliminary talks between NBC and U execs about how the two companies can work together have so far focused on the ways their TV properties can be leveraged to promote the studio’s wares. The model everyone seems to be looking at is Viacom.
- Call it sentimental value, but Universal’s Valley site is the last big studio lot, at 415 acres. And, with a tax-assessed value of $1.44 billion, it could have been awfully tempting for a cash-strapped Vivendi to follow other corporate parents of movie studios and sell the land off. So the lot seems to be a sure winner.