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MGM will rep NBC’s tube product overseas

"Will & Grace" take off for Blighty

Visit Variety’s NATPE special report.

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The international TV biz is abuzz with the news that NBC is getting out of the foreign distribution business by sealing a deal with MGM to represent its product overseas.

The deal is likely to be completed within days and will mean a handful of layoffs at NBC Enterprises.

The Peacock’s hit comedy “Will & Grace” and its feel-good dramedy “Providence” as well as its sudser “Passions” will be handled by the Lion at the upcoming Mip TV trade show in April.

International mavens on the NATPE floor said that the squeeze on prices for U.S. network dramas and sitcoms in foreign territories has gotten tighter in the last few years.

“Year-on-year increases from foreign are not more than 3%, and in some territories have actually dropped,” one key Euro buyer said Wednesday of the revenues the Hollywood companies are now collecting from TV clients abroad.

Without hit movies or telepics/miniseries to drive sales, it’s very hard to keep pricing up for U.S. shows sold piecemeal abroad.

NBC is the only major U.S. network not aligned with a studio that churns out feature films.

“It’s tougher and tougher out there,” NBC Enterprises senior VP Jerry Petry said. “We’re facing reduced time slots and more local production abroad. Foreign buyers are under-indexing sitcoms and dramas, and we’re feeling the pinch.”

The pairing with MGM does have a certain logic: The Lion boasts a newly reactivated feature film division — think “Hannibal” — and some long-running cable sci-fi fare, but has for years lacked network dramas and sitcoms. MGM is not officially commenting on the deal, as it has not been completed, a spokeswoman said.

Word on the NATPE floor was that NBC Enterprises considered a number of distributor offers, but that MGM’s attention to its own brand convinced Peacock brass that the Lion would protect NBC’s brand as well. Others said that price was the key: MGM was apparently willing to guarantee a gross of $550,000 an hour on the product taken over from NBC.

The timing of the deal with MGM is piquant: NBC Enterprises sales execs just inked a deal for “Will & Grace” in the U.K. with Channel Four, and Britain is arguably the toughest market in the world to place an American show.

Price terms were not revealed, but estimates on the floor put it in the $50,000-$60,000 range. Channel Four has utilized top-tier U.S. sitcoms for years on its sked: “Will & Grace” will air alongside “Friends” and “Frasier.”

The deal between the Peacock and the Lion does not involve the network’s news and sport material or late-night programming, for which NBC Enterprises will retain foreign rights. NBC will also retain all rights for Canada.

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