Syndication reaches tipping point

Newcomers face uphill battle in rocky biz

Some of the biggest hits in syndication history are seeing double-digit ratings declines this year. “The Jerry Springer Show” is off 25%, and “Live With Regis and Kelly” is down 13%. Even “The Oprah Winfrey Show” hasn’t been spared the erosion.

All of which has made for an interesting question: Just what life is there left in the business, and in its flagship conference, NATPE?

With declining ad sales, even the highest-profile new contenders are likely to enter the conference without a guarantee that they actually will make it to air next fall. In years past, a show like “T.D. Jakes,” from Dr. Phil McGraw’s production company, would have looked like a go. Not so this year.

A model for what lies ahead may be “The Tyra Banks Show,” which was moved to the CW and is seeing its output scaled way back.

“It’s not Roger King’s world anymore,” notes one longtime industry observer, referring to the late King World impresario. “The days of the big wheeler-dealer don’t exist anymore.”

These days, however, syndie’s troubles seem to transcend those of a once-colorful business losing some of its luster.

With TV advertising cratering along with the rest of the global economy, their station constituents feeling too much pain right now to pony up for big licensing fees and ratings continuing to spiral, the syndication business may be reaching a tipping point.

“What you’re going to see this year is not a lot of new shows, and what happens next year will be very telling,” says one syndie division topper.

With a healthy slate of national advertising commitments made for the 2008-09 season during last spring’s upfront, and drawing from a relatively recession-proof base of packaged goods brands as opposed to, say, automakers or financial companies, syndicators say they’ve yet to feel an acute ad-dollar crunch themselves.

“We did real well with Procter & Gamble at the upfront,” says John Nogawski, prexy of CBS TV Distribution, distrib of most of syndication’s top firstrun series, including “Oprah,” “Wheel of Fortune,” “Jeopardy!” “Dr. Phil” and “Judge Judy.”

However, the stations that air his studio’s shows aren’t faring nearly as well, he says, pointing out that some of them rely on the mega-troubled automotive sector for as much as 50% of their revenue.

This means that syndicators selling new shows or trying to renew existing ones are having a tougher time than ever prying licensing dollars and multi-year commitments from stations.

“Even before the economy went bad, my contention was that stations aren’t willing to pay enough for daytime,” says a syndie unit topper. “Each year, we’ve probably seen about a 10%-12% decrease in what stations are willing to pay. (The recession) has only exacerbated the situation.”

CBS, for example, is in the marketplace with a daytime talkshow built around popular religious figure T.D. Jakes and produced by Dr. Phil’s Stage 29 Prods.

With daytime gabbers running somewhere between $25 million-$35 million to produce each season, it has become more challenging than ever to make the economic model work.

Despite a commitment in hand from Tribune stations that covers the big TV markets including New York, L.A. and Chicago, it remains uncertain if the Jakes project — a proverbial “firm go” just a few years ago — will make it to the air.

“The crazy thing is, I’ve never seen such a great reception for a TV show,” Nogawski says. “But at this point, it’s just a question of how much stations are willing to pay. At the end of the day, we’ll add up the numbers and see if it works. Ultimately, it will be (Stage 29’s) decision.”

While establishing new shows will be tougher than ever this year, most syndicators are fortunate in that their big, established series are renewed several years out. But in a few seasons, they might not be so lucky, regardless of what shape the overall economy is in.

License fees for these top-echelon skeins remain sky high. Top-rated gabber the “Oprah,” for example, commands around $13 million a season from KABC in Los Angeles alone. However, the series — which is locked into its station clearance deal until 2012 — has seen its average national rating dip 11% this year.

“Oprah” is hardly alone. Virtually all the top syndie strips have experienced significant year-to-year ratings declines.

“You have these shows commanding these enormous licensing fees, but the business has changed dramatically,” notes one syndie topper. “The pricing of these shows is not at the same level (that the ratings are now).”

Of course, it’s tough times that often gestate innovation.

Faced with long odds of renewing a gabber that’s averaging a 1.0 national rating this season, Warner Bros. put together a novel deal to keep the “Tyra Banks Show” on the air for a fifth year next season.

With the contract to run the daytime strip on Fox stations due to expire, Warner signed a deal with the CW, putting “Tyra” on a network that already airs the host’s reality-competish show, “America’s Next Top Model,” in primetime.

In making “Tyra” a network show, Warner wasn’t able to secure a license fee, collecting all revenue through barter advertising time. However, the distrib was able to offset that revenue challenge by securing back-to-back double runs of the hourlong show — it will air from 3-5 p.m. on the CW next fall — meaning it will have more national time to sell.

Meanwhile, Warner reduced its production cost, paring its original-episode commitments to 26 weeks (about 130 episodes) from 34 weeks, using four seasons’ worth of reruns to fill the first hour of double runs with “best-of” installments.

“The (deal with The CW) allows us to produce ‘Tyra’ at the same quality level we did in syndication and provides an established brand for CW stations in daytime,” says Warner Bros. Domestic TV Distribution prexy Ken Werner.

Indeed, the days when syndie strips would produce 39 weeks worth of original episodes have probably gone the way of acre-sized NATPE booths, as syndicators experiment with repurposed content — and various other tricks — to keep their profit margins commensurate with their shrinking audience sizes.

“Syndicators are going to have to look at creative ways to approach daytime,” says TV station rep firm analyst Bill Carroll. “Even if the economic issues weren’t as complex, they were going to have to change, just due to the shifts of the audience in daytime. The economics are just putting a greater focus on what needs to be done.”

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