Novel TV Deal Could Rein in Program Costs

Article excerpt

In a case of the right talent meeting the right need at the right time, Ed Zwick and Marshall Herskovitz, the creators of the 1980s ABC hit show thirtysomething, have concluded a complicated new television series deal that several participants say may be the first step in a radically changed approach to controlling escalating program costs.

The deal is unusual in several ways, beginning with the fact that it involves four series at two networks, ABC and Fox, under the control of two Hollywood studios, Disney and Fox. But it is the element of who will own the rights to future sales of the shows -- should they be successful -- that places the deal at the heart of the issue roiling the entire television industry.

Under the deal, Bedford Falls, the company owned by Zwick and Herskovitz, will create at least three new shows for ABC, all to be produced through Buena Vista Television, the studio owned by ABC's parent, Walt Disney. They will also create at least one new show for the Fox network, produced through a subsidiary of Fox Television, the studio owned by the Fox Inc. unit of News Corp. Thus, in both cases the shows will be partly owned by the companies that own the networks broadcasting the shows. Earlier this year, NBC was forced to pay the Warner Brothers unit of Time Warner $286 million a year to retain ER, television's most popular show. In the wake of that, numerous producers and studio executives have said that NBC, in an apparent attempt to control future costs, is pressing creators of programs either to cede some of the ownership rights to the network or else to sign licensing contracts that give the network exclusive rights to the show for up to 10 years. Executives at NBC, a unit of General Electric, deny those reports. Still, referring to the reports about NBC, Zwick said: "This seems to be the trend. In making this deal, we were looking for a way for the artist to fit into this changing dynamic." Herskovitz added, "Without a doubt, the ownership issue drove this deal." In a change from conventional practice, Zwick and Herskovitz will receive more than 50 percent of the syndicated rerun profits from all the shows they create under this deal. "This deal represents what the future is going to be," said Lloyd Braun, chairman of Buena Vista. "The system as currently constituted is madness." Under the current system, studios pay established writers millions of dollars in upfront fees to secure their talents to create shows. While the studios retain the bulk of ownership rights, the writers end up with modest profits when or if the shows are successful. …

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