Producer Mark Gordon Slips the Bonds of Hollywood

Producer Mark Gordon was only a few years removed from landing a best picture Oscar nomination for “Saving Private Ryan” when he decided to move into TV production in a significant way. His first series to make it on the air was “LAX,” a poorly received sudser for NBC that was canceled eight weeks after takeoff in the fall of 2004. The following year, the two shows that came from the Mark Gordon Co. enjoyed considerably more longevity. Both are still on the air, and both are tentpoles for their respective networks: ABC’s “Grey’s Anatomy” and CBS’  “Criminal Minds.”

Nearly a decade later, “Grey’s” and “Criminal Minds” would prove to be the financial engines that would allow Gordon to take another big leap. In January 2015 he set an innovative deal with British-Canadian distribution company Entertainment One to establish an independent studio that bears his name. The producer now has his own money on the line as he develops TV series for broadcast, cable and streaming platforms.

Fortunately for him, the first TV package out of the gate was the political thriller “Designated Survivor,” starring Kiefer Sutherland. The show proved a modest hit on ABC and a bigger success in international markets. And it was the perfect vehicle to test-drive the business model of Gordon’s venture with eOne.

“I’m an entrepreneur in spirit, and I’ve always tried to look at different ways of doing things,” Gordon says. “It’s a puzzle that’s interesting and fun and challenging. I’m enjoying figuring it out.”

The new-model Mark Gordon Co. reflects the budding trend of financing for scripted TV series production flowing from outside the major U.S. studios. Gordon’s pact with eOne banks heavily on international sales and digital syndication to cover (and then some) the production deficits on the show.

“Mark is a rare breed of producer who has exceptional creative instincts and fantastic business acumen.”
Darren Throop, Eone Ceo

Others who have recently ventured into independently financed TV production include Sonar Entertainment and STX Entertainment. Jerry Bruckheimer’s TV operation has been meeting with financiers during the past year since ending its formal studio alliance with Warner Bros. TV.

Former ABC Entertainment Group president Paul Lee has been pursuing a production fund with assistance from CAA. WME/IMG has become increasingly active in arranging financing and handling distribution for television programming for clients ranging from Steve Harvey to the Ink Factory, producer of AMC/BBC’s “The Night Manager.”

High-end TV series production has for the past 25 years been the province of the largest TV studios, because of the cost and risk factor in series production. Remember Artists Television Group? Michael Ovitz’s ambitious independent production venture went broke quickly in 2000 and 2001 after it sold five prime-time scripted series in its first year — and then cratered under the company’s overhead and deficit-finance obligations.

Deficits on a high-end drama can run $1 million or more per episode. And the failure rate is extremely high. But some of the traditional risk factors have been offset in recent years by strong international demand for U.S. series and the appetite among streaming platforms for off-network acquisitions. The growth of those two revenue sources has helped make TV production a more attractive business for investors than in the days when shows usually had to run at least four seasons before producers could start to recoup those deficits. Now, shows with strong international appeal — aided by an actor with Sutherland’s name recognition — can make up production costs in year one.

Darren Throop, CEO of eOne, says the goal in pacting with Gordon is to grow the volume of high-end scripted series eOne distributes. Mark Gordon Co.’s first full year of operations exceeded financial expectations.

“Mark is a rare breed of producer who has exceptional creative instincts and fantastic business acumen,” Throop says. “We were convinced that to move our business forward as a company we needed to partner with the best creative minds in the industry.”

SHAYAN ASGHARNIA for Variety

Networks have been receptive to eOne’s business model because of its ability to offer deficit financing. “We’re bringing them highly sought-after IP, and we bring down their risk profile,” he explains.

The wave of independent operators emerging in TV are taking a cue from the movie business.

A generation ago, foreign presales of titles energized the independent film sector. That model is starting to do the same for prolific TV producers. Gordon’s business today is a different animal from the company he ran for a dozen years under an overall deal with ABC Studios. For starters, he has skin in the game in a way that he never had before.

“Generally as a studio producer, your wins are your wins and your losses don’t count,” Gordon says. “If I made X number of pilots or series with a deficit, those wouldn’t count against my profits on a successful show. That can be great, but the other way of looking at it is that now your wins become dramatically bigger and your losses count against your wins. You’re really betting on yourself aggressively. You have to believe that the aggregate of what you do is going to be more valuable if your wins become real wins.”

As the prime-time arena started to expand during the past few years, Gordon began to be approached with a range of unconventional partnership opportunities. His goal was to gain more flexibility to sell shows to outlets outside the Disney/ABC ecosystem at a time when demand was skyrocketing.

“For my entire television career, it’s been tricky for one large company to sell to another large company,” Gordon says. “You would always hear ‘We can’t do this because of the precedent’ and ‘We won’t give up these rights because…’ It always made it much more difficult as a producer to sell everywhere. I started to think about how I could do business in this changing world in a way that’s conducive to opportunity and success.”

Gordon is quick to praise the team at ABC as “family” and express his gratitude for the success they’ve had together. If it weren’t for the syndication profits delivered by the shows he produced through ABC Studios, he could never have planted his flag as an independent.

“I’ve been fortunate enough to have two very successful shows in ‘Grey’s’ and ‘Criminal Minds,’” he says. “That allows for a lot of money to flow through the company. I wasn’t in a place where I needed the support of a large company for my infrastructure. My good fortune allowed me to take a risk that others might not be able to take.”

Gordon has the kind of respect for the creative process and determination to see projects to fruition that sets him up well in launching his own boutique studio, says Gary Levinsohn, who was a partner with Gordon in Mutual Film Co. from the mid-1990s through the early 2000s. He recalls Gordon’s approach to salvaging movies that would inevitably fall apart on the road to production.

“I called Mark my dragon …whenever I needed a powerful voice to speak for us.”
shonda Rhimes

“He has a particular attitude about not being defeated by those challenges,” says Levinsohn, now a principal in H2L Media Group as well as Mutual Film. “He would find himself energized by figuring out how to solve [problems].”

Gordon was a key player in helping to launch Shonda Rhimes’ TV empire. She had little experience in TV when the two joined forces to develop “Grey’s Anatomy.”

“”Mark is very straightforward and he has great taste. He surrounds himself with amazingly talented people and I don’t mean me, I mean everyone I’ve met who has worked there has been a gem,” Rhimes tells Variety. “He’s collaborative and doesn’t stand in the way of creative. In those early years of ‘Grey’s’, I called Mark my dragon who I could let out of the cage whenever I needed a powerful voice to speak for us. He passed down the importance of being a dragon for others, to me. I will always be grateful to him.”

With help from CAA’s Evolution Media Capital investment bank, Gordon wound up selling 51% of his Mark Gordon Co. banner to eOne for $133 million. EOne has the international distribution infrastructure that Gordon could never assemble on his own. The advantage is that with eOne’s backing, Gordon can now bring his own financing to the table, which means he has the leverage to retain significant ownership of his shows.

“It wasn’t a situation where I said, ‘Let me sell half the company, and let me take a lot of money off the table.’ It was about having a partner that isn’t just writing me a check but is able to help us grow our business,” Gordon says. “A strategic partnership in the long run is much more beneficial than someone just paying some multiple for your company.”

esignated Survivor” walked in the door of Gordon’s Santa Monica office just as he was setting up the eOne partnership. Creator David Guggenheim and producer Simon Kinberg brought him a taut political thriller about a low-level Cabinet member who’s vaulted into the White House when he’s the lone official who isn’t killed in a terrorist attack that takes out the president along with everyone else in the line of succession.

Sutherland was high on everyone’s wish list for the lead. Gordon made the call to the actor’s reps fully expecting a quick no. To his shock, Sutherland agreed to read the pilot script and opted in. The deal came together quickly as Gordon was able to offer Sutherland a hefty up-front fee (estimated at $350,000 per episode) plus a bigger slice of profit participation interest than he would have received from a major studio. Because Sutherland’s participation would ensure that the show would be a hot property overseas, Gordon was more than happy to make a generous deal. That’s the kind of maneuverability that would have been more cumbersome to manage within a larger studio structure.

“Designated Survivor” sparked a bidding war among the broadcast networks when it was shopped last year. When it landed at ABC with a straight-to-series order, the show became a co-production with ABC Studios. But Mark Gordon Co./eOne is the lead producer, and it held on to international distribution rights — highly unusual for a studio series but a sign of changing times. Retaining international rights was crucial. “Designated Survivor” grabbed nearly $3 million an episode in a deal with Netflix.

The show was the proof of concept for Gordon’s eOne venture. But the other ABC drama that Mark Gordon Co. delivered last year was also an important learning curve for the company. “Conviction,” the legal soap starring Hayley Atwell, went 13 episodes and out on ABC. But Mark Gordon Co./eOne didn’t take a bath on the deficits because the international sales were
so strong.

With “Designated Survivor,” there have been other challenges. The show has had its share of behind-the-scenes turmoil, with three showrunners coming and going (Amy B. Harris, Jon Harmon Feldman, Jeff Melvoin) in its first season.

The series has grappled with changes in creative direction — in which Sutherland is said to have had a big voice — from an intense focus on the conspiracy thriller storyline to emphasizing Sutherland’s character’s family life and his work as commander-in-chief. Gordon says the shuffles stemmed in part from the fact that Guggenheim did not have the experience to serve as showrunner. Keith Eisner is lined up to take the helm as showrunner in season two, working with Guggenheim.

“This is not an easy show to do,” Gordon admits. “Showrunning is not just writing. We’ve struggled to find the right person to do all of those things.”

The internal bumps didn’t stop “Designated Survivor” from becoming ABC’s highest-rated new show of the season and its No. 3 drama behind “Grey’s Anatomy” and “Scandal.”

Gordon has produced enough TV shows and movies to be skilled at managing through crises, creative and otherwise. But for the first time in his TV career, he’s got everything on the line, not just a vanity card in the end credits. Like any good drama, the stakes invigorate the challenges.

“We’ve been fortunate to have real success in our first year. But I always feel that if you have failures, you’re lucky. You’re getting up at bat. You’re working,” Gordon says. “I’m understanding the new world better, and I’m learning how to do my job again. And about half of my job is new these days.”

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