Alphabet Web Ups Ante

CapCities/ABC, a company known for its frugality, is indirectly helping fuel a new boom in prices paid to television producers.

That’s the word from executives at various studios, who aren’t pleased about that development, saying it will inevitably drive up the cost of producing TV programs.

The parties fueling this surge in demand for top writer-producers are DreamWorks and Brillstein-Grey Entertainment – recently formed production companies headed by high-profile movie and television executives. The former is run by the troika of Steven Spielberg, Jeffrey Katzenberg and David Geffen, the latter by mega-managers Bernie Brillstein and Brad Grey. Both have elaborate TV production partnerships with CapCities.

In just the last few weeks, Brillstein-Grey has inked a two-year, $5-million agreement with “Roseanne” exec producer-head writer Rob Ulin, while DreamWorks moved toward signing David Rosenthal (exec producer on ABC’s “Ellen”) to an exclusive deal said to be worth about $1.5 million per year.

Those arrangements follow DreamWorks’ four-year, estimated $10-million feature and TV pact with “Family Ties” creator Gary David Goldberg, who’s already developing “Champs,” a new series starring Timothy Busfield, for ABC, and another half-hour at CBS.

BGE inked Paul Simms (“The Larry Sanders Show”) to a major overall deal, under which he’s producing a new NBC series, “Newsradio,” and nabbed former “Wings” producer Steve Levitan.

DreamWorks also heavily courted Matt Williams’ Wind Dancer Production Group before the trio behind “Home Improvement” ultimately opted for a new wide-ranging movie, TV and theater pact at Katzenberg’s old stomping grounds, Disney.

“Brillstein-Grey and DreamWorks are bidding up overall deal prices dramatically,” says one rival studio exec.

Other suppliers say increased spending prompted by these new competitors will eventually boomerang back on CapCities/ABC, since the higher costs associated with signing producers to run shows will compel studios to push for heftier license fees from the network.

Agents also acknowledge – and are not surprisingly elated – that DreamWorks and Brillstein-Grey have been chasing talent in a manner that’s pushing up prices. “You’ve got some pretty aggressive people running both those operations,” says one on condition of anonymity, likening DreamWorks partner Jeffrey Katzenberg to Pac-Man – the voracious video-game character.

As for CapCities’ complicity through its involvement with both entities, says one supplier, “They talk about fiscal responsibility, but they aren’t behaving that way.”

Both the Brillstein-Grey and DreamWorks enterprises share deep pockets and driving ambition. BGE is said to have committed as much as $100 million to TV production, while DreamWorks estimated, in a business plan obtained by Variety, that it expects to have at least five primetime series on the air by the year 2002, with nearly $200 million allocated for TV.

An ABC executive points out that it’s not unusual for new players to create short-term increases in talent fees, just as feature film companies seeking to establish their credentials affect script acquisitions and star salaries. “Whenever people come into the market in a big way they drive up costs,” the exec says.

Twentieth Century Fox TV and, to a lesser degree, NBC Prods. have also been accused in the recent past of helping drive up prices, as was Disney in the late 1980s, when the studio (during Katzenberg’s tenure) jumpstarted its network TV operation by virtue of numerous high-priced producer deals.

ABC also hasn’t sought to hide its desire to own more programming, all the while trying to allay concerns in Hollywood that the network would increasingly turn to such fare at the expense of outside suppliers.

“I don’t think anyone’s going to corner the market” on creative talent, CapCities/ABC president-chief operating officer Robert Iger said in a speech earlier this month before the Hollywood Radio & Television Society, where he stressed ABC’s interest in expanding in-house production as well as its commitment to keep buying shows from a variety of sources.

Iger suggested that ABC is in “the content business,” putting an emphasis on producing and owning programs regardless of where they air.

The company will have produced series for all three major competitors when “Newsradio” premieres (following CBS’ “The Boys are Back” and Fox’s “Class of ’96”) as well as cable product through its stakes in the ESPN, Lifetime and Arts & Entertainment networks.

Toward that end, Iger also indicated that the company would happily become a supplier to new alternatives, including the unnamed telco venture being advised by Creative Artists Agency.

ABC officials have stressed that it would be counter-productive to favor in-house shows on the ABC TV Network if it means lower ratings and thus less revenue.

Those pronouncements to the contrary, production sources still continue to express skepticism about complete even-handedness when it comes to in-house fare. As an example, ABC’s children’s programming co-venture, DIC Entertainment, recently landed two of three new shows scheduled on the web’s Saturday-morning lineup for next fall, prompting other animation houses to grumble about favoritism.

In a lighter vein, DreamWorks’ Katzenberg – who has largely shunned publicity after the flurry that attended the company’s formation – couldn’t resist publicly joking at the HRTS luncheon where Iger spoke about that studio anxiety. “Would you mind telling the audience,” he asked the CapCities/ABC exec, “you were just kidding when you said you weren’t going to play favorites with your in-house product?”

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