Cablers prepare for rerun race

Bravo, 'The West Wing' deal set the tone

NEW YORK — Hundreds of millions of dollars are about to flow from cablers to distributors as the bidding heats up for reruns of “CSI: Crime Scene Investigation,” “Law & Order: Special Victims Unit,” “Third Watch” and three or four other network-primetime hours.

No one in the industry can remember a more dynamic cable marketplace for off-network hours.

In previous years, an oversupply would’ve depressed the price.

But that cloud has lifted in 2001 because there are so many more cable networks trundling barrels of cash to bid for these shows, networks as varied as FX, TNN, A&E and Court TV.

What could serve as the watershed moment in the transformation of the marketplace took place earlier in March when — almost completely out of the blue — the-arts-and-culture network Bravo elbowed aside such cable intimidators as TNT, USA and Lifetime to buy reruns of “The West Wing” from Warner Bros. for a record price: $1.2 million an episode.

King World execs, their competitive instincts turbocharged by such an eye-popping license fee, are hell-bent on setting a fresh record with the sale of the smash-hit CBS series “CSI: Crime Scene Investigation,” which just about every cable network that buys reruns would love to get its hands on.

One of the ways King World expects to displace “West Wing” from its top-grossing pedestal is to throw out the sales rulebook and offer a clause not included in the Warner Bros. deal with Bravo: a once-a-week run of “CSI” starting this fall and stretching through fall 2003.

The winning cable bidder would be able to draw on the previous year’s episodes in each of the three years of the weekly play contract.

Then, in fall 2004, King World would funnel the first 88 “CSI” hours to the cable network for five-a-week play, the same pattern as “West Wing” and most of the other contracts for off-network series.

From just those first 88 episodes, King World hopes to pocket a king’s ransom of $150 million. The biggest portion, $105 million, would come from the figure of $1.2 million an hour for the five-a-week off-network play, multiplied by 88.

The next $23.4 million would flow from the multiple of $150,000 a week over three years for the once-a-week run. King World could also reserve the right to barter two runs a week on Saturday and Sunday to TV stations market-by-market in rerun syndication for multiple years.

No cash would change hands in these last transactions, but King World could rake in as much as $25 million in advertising revenues.

The bottom line: If King World is able to parlay the weekly play inducement into a stratospheric license fee for reruns of “CSI,” every other distributor with an off-network hour will offer the same concession — unless the broadcast network that carries the original says no.

Studios USA’s “Law & Order: Special Victims Unit” is a case study in the complications that face distributors under pressure to siphon extra money from the rerun sale of successful series.

As part of the original deal between Studios USA and NBC for the first run of “SVU,” the USA Network already pays about $150,000 a week to get a run of the “SVU” episode nine days after it airs on NBC Fridays at 10.

But what if another network — TNT, for example — outbids USA for the rerun rights to “SVU” five times a week beginning in fall 2003? Confusion would then reign because in the 2003-04 season and beyond, “SVU” could be available on three networks at the same time: NBC, USA and TNT.

Viewing these events with alarm, Bill Carroll, VP and director of programming for Katz Television, who advises more than 250 TV station clients about what shows to buy, says, “We’re at a crossroads in the sense that distributors are striking at a fundamental truism: Everybody in the industry knows that programming exclusivity has an enormous value to a network or a TV station.

“But when that exclusivity vanishes because of concurrent plays and shared windows,” Carroll continues, “the networks’ affiliated stations are bound to become concerned. And they’ll have to remind the networks that it’s the TV stations that deliver the network programs to people’s homes.”

Garnett Losak, VP and director of programming for Blair Television, like Carroll, counsels TV stations about program buys. “The TV station is powerless in this equation,” Losak says. “One of the reasons for the erosion in the ratings is that there are a zillion other places to get programming,” from cable networks and videocassettes to digital video-on-demand and streaming video on the Internet.

“But,” Losak adds, “at least the stations will get the first run” of “CSI” before a cable network schedules the episode. CBS, which is co-owner of “CSI” with Touchstone TV, needs a gigantic aftermarket payday from the series, Losak says, because the costs of producing the show keep escalating.

Alan Bell, prexy of Freedom Broadcasting, the Irvine, Calif.-based company that owns a number of net affils, is not yet ready to strap on his armor and attack the broadcast-network barricades.

In Bell’s analysis, it’s a fairly safe bet that the Big Four won’t make programming moves that “are totally destructive to their affiliates” because these networks also own groups of TV stations, most of them located in the biggest markets. The O&Os would get hurt just as badly as the affils if net programming started turning up all over the dial.

Another marketplace force affecting the sale of “CSI” is a lawsuit headed for trial April 9 brought by Steven Bochco, the creator and co-exec producer of “NYPD Blue,” who claims 20th Century Fox cheated him out of as much as $60 million by selling the “Blue” reruns inhouse to Fox’s cable network FX.

(Twentieth settled a similar lawsuit by actor David Duchovny, who charged he was cheated out of profits because the studio sold “The X-Files” to FX at below-market value.)

King World has a sister network called TNN, which is aggressively buying off-network series to build up its programming inventory to compete with better-stocked rivals such as USA, TNT and Lifetime. If TNN winds up with the rights to “CSI,” King World plans to make sure TNN pays more money than whichever competing network has submitted the “highest” bid.

Litigation continues to be a growth industry in Hollywood, which means contract lawyers will be poring over the details if cable-network siblings end up buying the current off-network hours — USA for “Law & Order: SVU,” TNT for Warner Bros.’ “Third Watch,” Fox Family for Twentieth TV’s “Judging Amy,” and TNN for Paramount TV’s “Charmed” and King World’s “Family Law.”

If there’s a harbinger, the fact that Bravo stunned the showbiz community by glomming onto “The West Wing” could mean the industry is heading into a three-month period of head-swiveling surprises.

And no one will be happier than the distributors who harvest the bales of cash.

More TV

  • Brian Roberts and Jeremy Darroch

    Sky Auction: Comcast Beats Fox With $39 Billion Bid

    NEW YORK — Hundreds of millions of dollars are about to flow from cablers to distributors as the bidding heats up for reruns of “CSI: Crime Scene Investigation,” “Law & Order: Special Victims Unit,” “Third Watch” and three or four other network-primetime hours. No one in the industry can remember a more dynamic cable marketplace […]

  • Meryl Streep Wants Tracey Ullman to

    Meryl Streep Wants Tracey Ullman to Run for President

    NEW YORK — Hundreds of millions of dollars are about to flow from cablers to distributors as the bidding heats up for reruns of “CSI: Crime Scene Investigation,” “Law & Order: Special Victims Unit,” “Third Watch” and three or four other network-primetime hours. No one in the industry can remember a more dynamic cable marketplace […]

  • Into The Dark -- "The Body"

    TV Review: 'Into the Dark: The Body' on Hulu

    NEW YORK — Hundreds of millions of dollars are about to flow from cablers to distributors as the bidding heats up for reruns of “CSI: Crime Scene Investigation,” “Law & Order: Special Victims Unit,” “Third Watch” and three or four other network-primetime hours. No one in the industry can remember a more dynamic cable marketplace […]

  • Bob Greenblatt, chairman of NBC EntertainmentPaley

    Bob Greenblatt Poised to Step Down as NBC Entertainment Chairman (EXCLUSIVE)

    NEW YORK — Hundreds of millions of dollars are about to flow from cablers to distributors as the bidding heats up for reruns of “CSI: Crime Scene Investigation,” “Law & Order: Special Victims Unit,” “Third Watch” and three or four other network-primetime hours. No one in the industry can remember a more dynamic cable marketplace […]

  • New Report Alleges NBC News Chief

    NBC News Chief Andy Lack Faces Scrutiny Over Handling of Sexual Harassment Claims

    NEW YORK — Hundreds of millions of dollars are about to flow from cablers to distributors as the bidding heats up for reruns of “CSI: Crime Scene Investigation,” “Law & Order: Special Victims Unit,” “Third Watch” and three or four other network-primetime hours. No one in the industry can remember a more dynamic cable marketplace […]

  • RuPaul

    TV News Roundup: RuPaul's Netflix Comedy 'AJ and the Queen' Adds 4 Cast Members

    NEW YORK — Hundreds of millions of dollars are about to flow from cablers to distributors as the bidding heats up for reruns of “CSI: Crime Scene Investigation,” “Law & Order: Special Victims Unit,” “Third Watch” and three or four other network-primetime hours. No one in the industry can remember a more dynamic cable marketplace […]

  • Jon Huertas and Chris Sullivan

    'This Is Us' Bosses Talk Toby and Miguel Centric Episodes and Filming in Vietnam

    NEW YORK — Hundreds of millions of dollars are about to flow from cablers to distributors as the bidding heats up for reruns of “CSI: Crime Scene Investigation,” “Law & Order: Special Victims Unit,” “Third Watch” and three or four other network-primetime hours. No one in the industry can remember a more dynamic cable marketplace […]

More From Our Brands

Access exclusive content