Fox Family put up for adoption

Channel may split from parents

NEW YORK — Fox Family Channel execs haven’t brought in an elephant from Ringling Bros. to sit in on programming meetings.

But as they jockey to find primetime series and movies with broad enough appeal to pull both adults and kids to their TV sets, these executives could be excused for feeling that a pachyderm is presiding over their strategy sessions.

The metaphorical elephant represents the imminent sale of Fox Family by parent company News Corp. to a media biggie such as AOL Time Warner, Walt Disney, Viacom, Sony, NBC, MGM or Comcast, all of which are expected to study carefully the nuts and bolts of Rupert Murdoch’s offering.

But the potential buyers have made it clear to News Corp.’s bankers that the $6 billion asking price is way too high, reminding Murdoch that he publicly downgraded the network’s price to below $4 billion as late as six months ago.

At that time, Murdoch’s 50/50 Fox Fam partner, Haim Saban, activated a clause in their contract that obliged Murdoch to buy out the Saban half. Those negotiations have come to a halt because Saban keeps insisting that Fox Family Worldwide, whose key asset is the Fox Fam channel, is a jewel that should fetch at least $6 billion.

What News Corp. is asking potential buyers to bid on is a network that’s still trying to find its way after dumping its older-skewing shows 32 months ago and then scrambling to come up with the right programming mix needed to attract more young adults, the demographic that Madison Avenue will pay a premium for.

Murdoch and Saban bought Family Channel from the Rev. Pat Robertson for $1.9 billion in 1997, inheriting “an audience consisting of 60% of people over the age of 50 and almost no kid and teen delivery,” says Maureen Smith, who became president of Fox Family Channel in June 2000.

Adding the name Fox to the Family Channel, the new management engineered a massive overhaul of the network, tossing out older-skewing rerun series such as “Diagnosis Murder” and “Hawaii Five-0” and buying series, movies and specials aimed at kids during the day and family audiences in primetime.

“We flipped the switch on the programming changes in August 1998, and the 50-plus audience went away in droves, causing our household ratings to take a serious hit,” Smith says.

The problem, she continues, is that “viewers perceived the new schedule as designed for kids. And during the day the kids did watch the channel. Unfortunately, their parents didn’t show up at night.”

Quick change

“Fox Family’s programmers tried to do too much too fast, and it backfired on them,” says Derek Baine, senior analyst for Paul Kagan Associates.

The network foundered for a good part of 1999 and 2000. Baine points out that Fox Fam’s cash flow tailed off from $142.5 million in 1998 to only $115.2 in 1999. He has dramatically revised the network’s 2001 cash-flow projections, slashing an earlier prediction of $174.4 million to the just-issued number of $126.2 million.

Fox Fam’s average household rating in primetime has fallen almost in half, from a 1.3 average in 1998 to the current level of 0.7. But the network’s researchers say that, whereas adults 18 to 49 made up only about 30% of the 1998 audience, the young-adult makeup has grown to 43% for the 2000-01 season.

The reason more young adults are watching in primetime, says Fox Fam’s senior VP of programming and development Tom Halleen, is that they’re noticing such series on the schedule as “Providence” and “Freaks & Geeks,” promotable specials like the catchall “13 Days of Halloween,” original reality shows such as “Scariest Places on Earth,” and movies like “Dances With Wolves,” “Witness,” “Ghost” and “Mrs. Doubtfire.”

Rerun series such as “Providence,” from NBC Prods., and “Freeks & Geeks,” from DreamWorks, are known commodities that Halleen says will not only draw young adults on their own but serve as promotional vehicles for the original series Fox Fam plans to commission for primetime.

The overall ratings of “Providence,” which cost the network a stiff $700,000 an episode, are not stellar, but its contract with NBC limits Fox Fam to scheduling only two episodes a week — back to back — on one night.

Smith says “Providence” should perform better starting in fall 2002, when Fox Fam will be able to play it five nights a week, making it easier for more viewers to find the show.

“Freaks & Geeks” is headed for a short shelf life on Fox Fam because DreamWorks produced only 18 hours before NBC canceled it.

But other rerun series stocked with lots more episodes are in the hopper. Fox Fam gets Aaron Spelling’s WB hit “7th Heaven” in fall 2002 and Carsey-Werner-Mandabach’s “3rd Rock From the Sun” in fall 2004.

Fox Fam will battle its sister network FX to secure the rights to strip the Twentieth TV series “Dharma & Greg” and “King of the Hill” in fall 2004.

The Fox Cable Group, which bought “Dharma” and “Hill” for subsequent allocation within the group, may not actually make its decision until 2003.

The original series Smith is high on is “State of Grace,” a nostalgia-drenched coming-of-age half-hour about 12-year-old Hannah and her urban Jewish family, which moves to a North Carolina community in 1965.

It’s a fish-out-of-water story, embroidered with voiceover narration by Frances McDormand as Hannah 35 years later. One source says the production cost could climb to as high as $750,000 a half-hour. From Stan Rogow Prods., “State of Grace” will get a double run at 9 p.m. Monday, beginning in June.

Halleen is also buying lots of movies, including a Disney package that will deliver to Fox Fam such titles as “The Sixth Sense,” “Six Days Seven Nights,” “Shakespeare in Love” and “Bicentennial Man.”

Original movies are also in Fox Fam’s gameplan, but Halleen says the network will stop producing them on an assembly line.

Churning out 26 of them in one year, as Fox Fam did in the late ’90s, didn’t work, he says, because they cost only about $2.5 million apiece — a bargain-basement price — and the network had too little time to build up any promotional head of steam to get them noticed.

“We’re now treating movies as events,” he says. “By producing only about six movies a year, we’ll be able to take our time promoting them. And since we’re budgeting each of them at $3 million to $4 million, we’ll get a higher level of writing, directing and acting talent.”

Fox Fam’s executives say they’re confident the programming blueprint will lead to better ratings and more advertising dollars over the next few years. “I’m pumped up over what we’ve already accomplished,” Smith says.

But, she adds, “no one knows what the future holds.”

A new buyer of Fox Fam could throw out Smith-Halleen program design and start all over again, just as Murdoch and Saban did when they dug the grave for Pat Robertson’s programming lineup in 1998.