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For Debmar-Mercury, 10/90 math adds up

Distrib savors three-pronged paradigm

When Mort Marcus and Ira Bernstein joined forces to create Debmar-Mercury in 2005, the indie syndie distributor would have seemed on the surface an unlikely candidate to forge an innovative production and distribution model for sitcoms.

But that was before the duo had a fateful meeting with a frustrated Tyler Perry.

In 2006, Perry was determined to get a comedy series on the air on his own terms. Marcus and Bernstein had the ultimate motivation to help Perry find his path to primetime, as they needed to make some noise with their fledging company.

Six years and six shows later, the distribution plan that Marcus and Bernstein devised for “Tyler Perry’s House of Payne” has become so well-known that it’s referred to in biz shorthand as a “10/90” deal. And there are plenty of stars who have lined up to take a shot at Debmar’s unusual formula — among them Charlie Sheen and George Lopez.

The first meeting with Perry — orchestrated by Mark Itkin, then of WMA — led to a series of what-if conversations as Perry talked about his struggle to convince a network to back his vision for a multi-generational African-American family show. He was even ready to finance and deliver the production through his Atlanta studio facility.

“Tyler was visionary. He knew he had something but he couldn’t figure out how to get there using a traditional TV series business model,” Marcus says. “We had that light-bulb moment where we thought, ‘How would you convince us to do that show? What if you just made 10 episodes and they aired?’?”

With the dearth of African-American comedies in primetime (then and now), the Debmar toppers were confident there would be demand for Perry’s show in first-run syndication. They worked their station connections to set up a two-week test run for “House of Payne” in 10 key markets. The plan was to shop the show nationally with the proviso that station buyers would have to commit to 90 more episodes. That would allow Debmar to sell the rerun rights to cable immediately, and bring cost savings as Perry could produce episodes at an accelerated pace (about 40 a year) without sweating out a renewal every season.

But then Turner Entertainment topper Steve Koonin turned the plan upside down. Turner’s WTBS Atlanta was one of the “House of Payne” test stations, and the Atlanta-based Koonin knew well of Perry’s following among African-American auds. After the test run impressed, Koonin stepped up to grab the show for TBS first, starting in fall 2006, with the reruns hitting local stations in 2008.

The timing of the “House of Payne” deal were fortuitous as it coincided with Debmar’s acquisition by Lionsgate in mid-2006, though it has continued to operate as an autonomous unit.

TBS and Debmar have since partnered on two more Perry skeins (“Meet the Browns” and “For Better or Worse”) and the Ice Cube-Joe Roth adaptation of “Are We There Yet.” Next up is Sheen’s planned comeback vehicle, “Anger Management,” also produced by Roth and Lionsgate TV, for FX. And Debmar is closing in on a deal for a show with Lopez.

For talent, the tradeoff with Debmar is a smaller paycheck upfront but a more generous slice of the backend profits than most studios would offer. The 10-episode test model hasn’t been foolproof; “Big Lake,” produced with Will Ferrell and Adam McKay for Comedy Central, went 10 and out in 2010.

Sheen’s camp first met with Marcus and Bernstein back in 2009, when he was negotiating a two-year renewal for “Two and a Half Men.” Sheen’s manager, Mark Burg, had been impressed with their dealmaking, plus he had a relationship with Lionsgate as a producer of the “Saw” franchise.

With all his notoriety, Sheen is tailor-made for the Debmar model, which requires that a show be rooted in a highly identifiable star or property.

“It’s a three-legged stool, and you need all three pieces otherwise it doesn’t work,” Bernstein says. “You need someone who has a pre-sold branded element. It can’t be an unknown guy with a really good script. You need to be in business with people who have the financial wherewithal to afford this deal and play for the upside. And the third element is they have to be able to execute.”

The structure of the Debmar deals also offer accounting benefits to the cablers, because they’re able to amortize the cost of the 90-seg pickup over four-plus years.

Beyond the sitcoms, Debmar has enjoyed a growth spurt during the past few years with its original first-run productions like “The Wendy Williams Show” daytime yakker (which has been on a roll with young femmes), or programs it distribs for others, like gameshow “Family Feud.”

And there’s more to come, Bernstein hints.

“We have a portfolio of businesses,” he says. “We’re in the (show) representation business, the original production business and the sitcom business, and quite frankly we are trying to work on getting into the one-hour drama business.”

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