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A&E’s mob mentality

Cabler pays top dollar for 'Sopranos' in attempt to break out of niche , build ratings

Two years ago, A&E was flatlining. Last week, it outwrestled the competish to land rerun rights to “The Sopranos” for a stunning $2.5 million an episode.

TNT, the network that went head to head with A&E for HBO’s mob drama, can blame A&E Networks president-CEO Nick Davatzes for the loss.

It was Davatzes, an ex-Marine who has spent more than 21 years with the cable group, who persuaded the three boards he reports to — A&E owners Disney, Hearst and NBC U — that spending $200 million for repeats of “Sopranos” was economically sound.

“I don’t make investments I can’t make money on,” Davatzes says. “But it’s clear that we went the extra mile because we thought this was a very unique product. From a business perspective, 60% of our audience has never seen this show.”

A&E’s victory over HBO corporate sibling TNT surprised many industryites.

“I’m shocked that TNT didn’t just go ahead and spend the money for it,” one cable topper says.

But a Turner insider says, “Would it have been a nice addition to our schedule? Absolutely. Was it necessary to have it, and for that high a price? Not really.”

It seems Davatzes was determined to reverse his reputation. A few years ago, he was best known for losing ratings behemoth “Law & Order” to TNT. The loss put the artsy channel in the doldrums, with an empty development pipeline and a ton of recycled Brit imports and period pieces.

“This was a network that really needed a shot in the arm,” says programming chief RobertDeBitetto. “It needed a team with a fearlessness to take a risk.”

Many in the TV biz say “Sopranos” may be too big a risk.

But Bill Carroll, VP/director of programming for Katz TV, says the show is a good gamble. Carroll points to both a relaxed set of standards for obscenity on basic cable — “Just look at FX’s original shows,” he says — and a significant number of viewers who have never been exposed to “Sopranos.”

“Any decision to spend that kind of money is risky,” he says. “But if any series has potential to explode, ‘Sopranos’ does. Even with a slightly modified version it would still be worth betting on. Are people watching the modified ‘Sex and the City’ on TBS? Yes.”

Picking up the HBO skein is similar to broadcasters buying major sporting events, Carroll adds. “Whether it’s football or Tony Soprano, there are major events that networks use to get viewers to check out what else is on the channel. This is likely going to be a great promotional platform.”

In fact, “Sopranos” is the high point in what has been an extreme makeover at A&E.

Determined to recover from the loss of “Law & Order,” Davatzes recruited History topper Abbe Raven and DeBitetto to revive the cabler in late 2002 and the pair worked through 2003 to come up with the new faces of the Arts & Entertainment channel: the staff of Southwest Airlines (“Airline”), a family of real-life morticians (“Family Plots”) and New York gossip queen Victoria Gotti (“Growing up Gotti”).

Those reality shows, along with “Dog the Bounty Hunter” and “The First 48,” helped A&E Networks generate more than $1 billion in revenues last year. (A&E Networks includes the History Channel, Biography and three digital offerings.)

It also boosted the cabler’s year-end ratings by a whopping 34% in 18-49 and 22% in 25-54, numbers that made A&E one of 2004’s fastest growing cablers in primetime’s key demos. All five series received second season pick-ups.

But that same reality strategy has many of the cabler’s competitors harping on the lack of “art” in the arts & entertainment channel.

Davatzes understands the quibbling, but says moving forward with the times is part of the game.

“A channel’s brand is a living entity and it can change over time. You don’t want to be like AT&T or Western Union,” Davatzes says. “Yes, A&E is doing things today that are different from what we’ve done in the past, but we’re still telling good stories about fascinating people. We’ve just moved into new formats.”

Says Carroll: “If there is room for ‘Fear Factor’ and ‘West Wing’ on NBC, there is certainly room for reality and ‘The Sopranos’ on A&E.”

That means more real-life folks on the way — Evel Kneivel’s son in “Kneivel’s Wild Ride” and roller derby enthusiasts in “Roller Girls”– but it also means eventually a move back into original dramas.

A&E’s Brit co-production “MI5,” now in its third season, harkens back to the dramas that A&E had been known for. But even though it remains a fave among crix, auds haven’t taken to the series in the same way they’ve gravitated to “Airline” or “Growing up Gotti.”

Still, A&E has readied several off-net hours in hopes of launching one of its own original dramas next year. “My goal is to make A&E a top 10 network,” Raven says.

Though the acquisition of “Sopranos” sticks out, the cabler has a history of aggressive bidding.

Execs shelled out $800,000 an episode for “Crossing Jordan” — a record high for the cabler in 2002. Months later, they coughed up more than $1 million an episode for “CSI: Miami,” which at the time was one of the costliest deals in history.

” ‘Sopranos’ is the key piece we’ve been waiting for. I’ve no doubt that it will be a wonderful platform for drama,” DeBitetto says. “We’ve been the underdogs here. We’re not aligned with a big media conglomerate, so we don’t have their advantages. But I think in the next year or two, you’ll see us play like we are.”

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