ABC’s Oscar Contract Renegotiations: Who’ll Get Creative Control?

Negotiations for ABC to extend its license agreement for the annual Oscar telecast are underway, but there’s a sticking point: ABC wants more creative input.

ABC’s deal with the Academy of Motion Picture Arts & Sciences already runs through 2020, but the two sides have been in talks for some time about an extension. A long-term deal would provide stability for the Academy as it looks to take on debt to help finance its ambitious Hollywood museum project, set to open in 2018.

Given the ratings issues with recent Oscarcasts, ABC has a much stronger argument to make at the bargaining table. Sunday’s 88th annual Academy Awards brought in the lowest ratings in eight years, a disappointment for Hollywood’s glitziest awards gala.

Under the terms of the contract, the Academy retains the rights to produce the show. That means AMPAS officials pick the producers, the host and set the tone for the overall production.

The network has always wanted more power, and now declining ratings strengthens its demand for a seat at the table when it comes to the show itself. The push is seen as coming from Ben Sherwood and the top ranks of ABC. (The Academy and ABC declined comment on ongoing negotiations.)

On Sunday, host Chris Rock drew generally positive reviews for attacking the Oscars’ diversity crisis with biting jokes. But the overall production of the show was seen as lackluster, given the industry it celebrates. With the diversity issue adding to the pressure, AMPAS is likely to be in a mood to cut a deal.

“To be a good partner I think you have to make some concessions when you realize you’re not capable of producing a show anymore,” says a source. “They watch what happens with Dick Clark Productions, who produce the Golden Globes, and it’s a pretty slick show.”

The overnights had barely come in before the finger-pointing began. The #OscarsSoWhite controversy blindsided the Academy and left the producers scrambling, and under pressure of boycotts, Chris Rock did little to promote the show. “We were behind the eight ball in this controversy,” says a network insider. “And America didn’t care.”

While viewers tuned out, those who did watch complained that the show itself didn’t feel well-produced. Though Rock’s monologue was well-received (as was his extended bit involving his young daughters selling Girl Scout cookies), the show was lacking in high-gloss production elements. “I thought Chris Rock opened strongly but then he kept going back to the same theme. It wore out its welcome,” acknowledged one Academy member.

Multiple sources questioned the choice of David Hill, a veteran of sports and live events, and director-producer Reginald Hudlin as producers of this year’s show. The Academy has long wrestled with whether to hand the telecast to film producers or to those with TV experience. For the previous three Oscarcasts the Academy went with Craig Zadan and Neil Meron, who have a broad mix of film, TV and legit productions on their resumes.

In an interview with Variety, Hill and Hudlin defended the show, pointing to the increase in male viewership (it was up 20%), and a slight uptick in the 18-34 demo. “We wanted to youth-ify the audience and broaden the demos, so that was very satisfying,” said Hudlin. They said they got a positive response from ABC and several Academy governors, who were “stoked.”

All this Monday-morning quarterbacking only strengthens ABC’s negotiating stance. But should it get too contentious, the Academy does have other options. CBS, for example, would likely take over the show in a heartbeat. Says a source, “The Academy can just turn to Les Moonves and say, ‘Will you give us more freedom?’ And he’ll say ‘yes’ and give them more money. But the truth is if you’re going to move (to another network) you better get something out of it other than a change in an acrimonious relationship.”

Ratings aside, the Oscars nevertheless are bankable as a prestige play for premium advertisers. ABC brought in an estimated $110 million in revenue from Oscar ads with last year’s telecast — and presumably a similar haul this year.

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