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Kudos gold mine

Nets, orgs vary wildly in award rewards

With Emmys taking center stage on Sept. 12, it’s appropriate to peer inside the envelope at the contribution of televised awards shows. They salute excellent work, they serve as industry promotional tools — and they rake in so much money they could make your head spin.

The parent orgs of Emmys, Oscars, Grammys and the Golden Globes earn a significant part of their income from the kudocasts. But tax documents and other sources indicate a huge disparity among network license fees, ad revenues, and profits for the four shows.

  • The award for most lucrative, not surprisingly, goes to Oscar. The Academy of Motion Picture Arts & Sciences took home more than $29 million from this year’s Oscarcast — better than 90% of AMPAS’ annual revenue. The kudocast was also the most profitable program for ABC, bringing in more than $23 million.

  • By comparison, the Academy of Television Arts & Sciences netted $2,915,000 from the 1998 Emmys. The Motion Picture Academy also was better at keeping its piece of Oscar’s ad pie: AMPAS got half the Oscarcast’s net ad revenue, but ATAS received only 12%. The Emmycast showered NBC with a profit of approximately $14 million.

  • The National Academy of Recording Arts & Sciences took home better than $17 million from the Grammycast in 1998. The org cut such a shrewd deal, getting $20 million a year for the broadcast rights, that the 1998 telecast was a break-even proposition at best for the Eye web. However, CBS stresses the young-demo pull is a big part of its appeal, especially as it is the only kudocast to air each year during a sweeps month.

  • NBC is clearly making a killing with the Golden Globes, whose costs are a small fraction of the Oscars’. And Academy Awards advertisers are paying five times as much to reach only double the number of viewers.

“The key to the difference between the Globes and the Oscars is the brand effect,” said Gene DeWitt of DeWitt Media. “This is a perfect example of advertisers being willing to pay extra because they believe viewers are more involved and more impressed by Academy Award advertising. The only other thing like it is the Super Bowl.”

Following are more details on the four kudocasts.

OSCARS

In 1999 income to AMPAS for the Academy Awards was $40,161,000. This includes what ABC paid for worldwide rights, most of which was for domestic broadcast. Foreign rights were worth about $3.5 million. The $40 mil also includes ticket sales (less than $250,000) and pre-show revenue.

AMPAS produced the Oscar telecast itself at a cost of $10,715,000. This left the org with a profit from the show of $29,446,000.

The ’99 show had a 28.6 rating, with each point equaling 994,000 homes. ABC paid $1.28 for each Oscar-watching household.

The telecast’s 30-second ad spots cost $1 million each. Figuring 70 spots sold, including the pre-show but not counting revenues from O&O stations, ABC was left with an Oscar profit of $23,089,000 million.

GRAMMYS

NARAS caught flak last year regarding allegations that little coin is actually flowing into its charitable orgs and for the high compensation of its president, Michael Greene. But NARAS deserves an award for wrangling such a rich TV rights deal.

The network’s payment is confidential, but published accounts and tax returns point to NARAS nabbing $24,531,435 from the 1998 Grammys — with $20 million coming from CBS for domestic rights.

This was the second year of a five-year contract to air the Grammys. Under the old deal, the domestic broadcast rights had reportedly cost the web only $10 million annually.

Aside from the coin from CBS, NARAS had $4,531,435 from tickets sales, merchandising, foreign syndication and other sources. The org itself produced the Grammys with Pierre Cossette, and had line-production costs of $7,149,693. This left NARAS with a net profit of $17,381,742.

Like the Oscars, Grammys have high production costs: For example, the bill for Ricky Martin’s performance alone on this year’s Grammys was a loca $200,000.

The show had a 17.0 rating in 1998, when each point equaled 980,000 homes. In effect, CBS paid $1.20 for each Grammy-watching household, although the Eye web gets a side benefit, since Grammy is the only kudocast to air during a sweeps month.

Though the Grammys’ cost per-household is nearly that for the Oscars, ad rates are much lower. The cost for 30-second ads on the 1998 three-hour telecast averaged $360,000. Figuring anywhere from 51 to 60 spots sold, according to industry sources, the 1998 telecast would seem to have been a seven-figure loss for CBS.

Eye web officials insist the network makes money on the Grammys. Indeed, the ad rate average for this year’s show was said to be significantly higher.

And even if the 1998 telecast was a loss-leader for the web, the sweeps-month telecast provides an important Nielsen boost to the Eye’s O&O and affiliate stations, which in turn are able to command higher ad rates based on improved sweeps numbers.

Moreover, the Grammycast is a key promotional platform for CBS as it bows midseason shows and touts other high-priority programs. It also rakes in the MTV demo, the Gen-X viewers that are hardest for the older-skewing Eye web to reach.

NARAS prez Mike Greene notes that the Grammys anchor the February sweeps for CBS. “We’re only happy to get in the line of fire for a higher license fee. If we were airing back in January, we wouldn’t have the other networks throwing their big guns at us. We’d be getting much higher ratings.”

EMMYS

In 1998, NBC gave ATAS $2,550,000 for domestic broadcast rights to the Emmys. The TV Acad also pocketed roughly $365,000 for Canadian broadcast and syndication income, ultimately netting $2,915,000.

Since ATAS didn’t produce the telecast itself, the exact cost of the show is not available from tax records. But informed sources place the expense for NBC to produce the show at roughly $4 million. The 1998 pricetag is slightly higher than usual for Emmys, since it was the 50th anniversary broadcast and ran four hours.

The ’98 show had a 13.6 rating when each point equaled 980,000 homes. In effect, NBC paid 49¢ for each Emmy-watching household.

Thirty-second ad spots on the four-hour telecast average roughly $300,000. Figuring 80 spots sold (less 15% ad agency commissions and not including O&O income), this leaves NBC with an estimated profit of $13,850,000.

GOLDEN GLOBES

NBC paid the Hollywood Foreign Press Assn. $2,065,266 for worldwide rights to the ’98 Golden Globes. HFPA had $357,001 in expenses (including the $246,027 banquet invitees scarfed down during the show), leaving the org a net profit of $1,708,265.

Since HFPA didn’t produce the telecast itself, the exact cost is not available from tax records, but informed sources place it between $1.5 million and $2 million. (Rental for the BevHilton ballroom is cheaper than the huge venues for the other shows, and the Globes feature no production numbers.)

The show had a 15.9 rating in 1998, when each point equaled 980,000 homes. Even figuring NBC’s costs on the high side at slightly more than $4 million, the Peacock web paid just 26¢ for each Golden Globe-watching household.

The cost on the three-hour telecast for a 30-second ad spot averages roughly $210,000. Figuring 51 spots sold, and excluding commissions and O&O income, this would leave NBC with an estimated profit of $5.03 million.

Former NBC president Warren Littlefield, who made the deal to bring the Globes from cable said the net is giddy with the results.

“We looked at the landscape and thought there was room for another major awards show besides the Oscars,” Littlefield says. “We aggressively pursued the Golden Globes knowing that our cost structure could be significantly less and our upside significantly greater.”

NBC has the rights to the Globes until 2006.