Film output deals on their way out

Titles include 'Biker Boyz,' 'Island,' 'Match'

ABC is tearing its hair, faced with the prospect writing a fat check to DreamWorks for a batch of movies sitting on its shelf that may never find their way onto ABC’s primetime schedule.

The titles include “Biker Boyz,” “The Island,” “Match Point” and “Surviving Christmas,” all box office disappointments and all locked in to an output deal ABC signed with DreamWorks years ago in a shared window with Turner Broadcasting’s TNT and TBS.

The deal comes to an end in September, and both ABC and Turner are planning to learn from their mistake by not renewing the pacts.

ABC, in particular, has pretty much abandoned movies because their ratings have fallen off drastically over the last decade. The network now restricts theatricals to holiday periods (for family movies) and low-viewing nights like Saturday.

And output deals no longer make sense even to a basic cable network because, as Bob Levi says, “at least 50% of the titles are not going to work” on the network, mainly because they flopped in the multiplexes. Levi, a movie-sales consultant and a former top program buyer for Turner, did the original DreamWorks deal. (Levi was one of the few execs who would speak openly about the output issue, because the networks and the studio plan to continue to do business with one another, title by title.)

ABC and Turner aren’t the only ones expected to shy away from future output contracts. Fox and its cable sibling FX couldn’t be happier that Revolution Studios is shutting down operations in October, because they also unwisely tied themselves down to an output deal engineered in 2001. For every box office success like “Black Hawk Down” and “Anger Management,” FX is shouldering the burden of finding slots for such shaky performers as “Gigli,” “Rent,” “Freedomland” and “Tears of the Sun.” (These underachievers will not show up on Fox.)

In addition to sticking the networks with non-commercial titles, movie-output deals drain precious dollars from the coffers of Turner and FX, which could be put to better use — namely, bidding on more blockbusters from the six major studios.

The stress is on Turner and FX because, over the last decade, the broadcast networks have almost ceased to rely on theatricals, filling their primetime schedules with scripted dramas and comedies, as well as talent contests, other reality shows, gameshows and newsmags.

Broadcasters generally need more than 10 million viewers for an individual program to ignite buying frenzies on Madison Avenue; and the only theatricals to top that number in recent seasons have been Christmas movies on ABC: “The Santa Clause 2” and “Polar Express” as well as a repeat of the original “Santa Clause.”

By contrast, with a lower threshold for success, basic-cable networks have stepped in to displace their broadcast rivals, grabbing first-network windows to most of the blockbuster titles. FX has nabbed “Spider-Man 3,” USA has landed “Pirates of the Caribbean: At World’s End,” and Turner has already locked up “Rush Hour 3” even though it doesn’t open in theaters until later this summer.

The pics don’t put up wrestling-type numbers on cable, but in aggregate, they can really help a network’s circulation and bottom-line averages.

To inflate the overall Nielsen numbers, a network like USA will schedule the first primetime runs of a hit movie in its network premiere each night over a weekend. Two months ago, USA unleashed a Friday-to-Sunday burst of “Sweet Home Alabama,” and all three runs of the Reese Witherspoon vehicle ended up among May’s 50 highest-rated programs in ad-supported cable among adults 18-49.

One big reason Turner and FX stuck themselves with an output-deal albatross: They were concerned the major studios would funnel their movies to cable-network siblings. Universal movies, for example, would go to USA, and Paramount titles to CBS and Spike; the pictures would thus be unavailable in the open marketplace.

But that scenario never really played out, mainly because movies have profit participants who would speed-dial their lawyers if they got even a whiff of a sweetheart deal between a movie company and its cable-network division.

FX did land “Night at the Museum” and “X-Men: The Last Stand” from Twentieth Century Fox, a sister company, but the network had to bid on both titles, ending up paying more than the amount offered by any of its rivals.

That’s a buying pattern that could represent good news for DreamWorks, which will be able to harvest bigger dollars by creating an auction for its future hits, selling them to the highest bidder. These movies won’t be locked in to a pre-negotiated price as part of an output deal.

And more cable networks are buying fresher theatrical movies, ranging from Oxygen and AMC to TV Land and Animal Planet.

So DreamWorks may be able to cast off the malign spell of box office failures. Instead of moldering in the studio’s vault, even marginal pictures could find a home on basic cable for the right price.