Vertical integration’s incestuous dealmaking

PERHAPS THE GREATEST FEAR pertaining to vertical integration in the media world — beyond nauseating overuse of the word “synergy” — is that big companies, sitting on both sides of the bargaining table, won’t deal squarely with third-party creative talent.

Although this is grumbled about constantly in private conversation, the latest public eruption came last week, when the creators of “Will & Grace” sued NBC. David Kohan and Max Mutchnik claim they were deprived “tens of millions” of dollars from renewal negotiations in which their producing partner, NBC Studios, allegedly played patty-cake with its parent network.

Proving that remains to be seen, and it’s worth noting that “Will & Grace” is getting the stuffing knocked out of it most weeks by CBS’ “CSI,” a reminder that its blockbuster credentials are more suspect than some programs that spawned earlier suits, including “Home Improvement.”

Still, it was hard to ignore the juxtaposition of the filing with the announcement that Alliance Atlantis — one of the few surviving independent program suppliers — is gutting its TV operations, despite possessing a stake in primetime’s top-rated franchise, the aforementioned “CSI.”

With most independents having thrown in the towel, the one certainty about the incestuous deal-making that prompted the “Will & Grace” dispute is there will be plenty more of it. And just to complicate matters further, when TV’s “five families” aren’t negotiating with themselves, they’re dickering with one another, raising the specter of other questionable conditions (as in “Renew my show on your TV stations and I’ll buy your show on my network”) muddying the waters.

MUCH OF THIS WILL BE RENDERED legally moot going forward as congloms adopt measures to forestall lawsuits. Indeed, as the Mutchnik-Kohan complaint notes, they got in under the wire, since those entering into contracts now must agree to waive “all rights to object to any dealings” between NBC Studios and affiliated companies. The language also grants NBC “sole and absolute discretion” over an inhouse project’s exploitation and says it is “under no duty or obligation” to solicit third-party offers or maximize returns for profit participants.

Claims to producers’ first-born children are not enumerated, merely implied.

Such concerns hardly stop at programming. Cable operators, for example, worry that once News Corp. controls DirecTV, the company will use its Fox networks as a club with which to bludgeon them. Then again, based on personal experience as an Adelphia subscriber, it’s difficult not rooting for Uncle Rupert to teach them all a much-needed lesson in manners.

All this got me wondering if it’s truly possible to engage in an arm’s-length negotiation with yourself. So I decided to try reenacting my talks to join Variety had the half my mother named been up against my brass-tacks, business-savvy side.

Mr. Lowry: So two columns a week, plus reviews. What do you say?

Brian: The money is still lower than I would like.

Mr. Lowry: I understand, but it’s a bump over your present salary.

Brian: I haven’t told you that.

Mr. Lowry: You forget, I know what you currently make. By the way, you also get a discount at the health club, which from what I’ve seen you can use.

Brian: That’s uncalled for. I’m just big-boned.

Mr. Lowry: Don’t be so touchy.

Brian: What if I decide to test the waters elsewhere?

Mr. Lowry: We both know that we — er, I mean, you, won’t.

Brian: What about including syndication rights to the column?

Mr. Lowry: Inasmuch as those are absolutely worthless, well, no, why should I? Oh, and we get to run it on the Web site, reprint it for the next 100 years and launch it on an unmanned space probe if we feel like it. You’ll get a lovely thank-you card at Christmastime, how’s that?

Brian: Wow, and I thought the Tribune guys were cheap.

Mr. Lowry: Look, things are tough all over. Do we have a deal?

Brian: I guess so. After all, it’s to our mutual benefit.

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