Analysis: ‘Big Bang' Pulls in Big Bucks

Warner Bros. to reap $4 million an episode on hot sitcom

By Paige Albiniak -- Broadcasting & Cable, 5/17/2010 1:26:27 PM

Related: 'Big Bang Theory' Sold to Fox, TBS for Fall 2011

After a year of discussion, posturing and pitching, Warner Bros.' sale of CBS' hit sitcom, The Big Bang Theory, turned out almost exactly as Warner Bros. predicted, reaping an estimated $4 million an episode. Should the show air on CBS for seven or eight seasons - it's currently finishing up season three -- Warner Bros. will earn $600 to $700 million in gross revenue on the loveable comedy about two geeks and a girl.

Considering that Big Bang will likely run longer than that and that this is only the show's first sales cycle, Big Bang should easily enter syndication's Billion-Dollar-Plus Club, along with such sitcom classics as Friends, Seinfeld, Everybody Loves Raymond, The Simpsons and Two and a Half Men.

The show sold to the Fox stations in ten markets at close to Two and a Half Men prices, according to sources, no mean feat in a television economy that's much different than the one Warner Bros. sold Two and a Half Men into in 2006. The previous record was held by Seinfeld, for which TBS paid $1 million in 1998. In 2006, FX paid $800,000 an episode for Two and a Half Men.

One of the deal's surprises was that Fox won the show instead of Tribune, which has had a great deal of success with Two and a Half Men, widely considered Big Bang Theory's perfect companion. However, when Warner Bros. called for "last and final" bids, Tribune didn't offer to pay as much as Fox did, and also wanted to air the show on its basic cable network, WGN America. TBS refused to share, as it should have after paying handsomely for the right to cable exclusivity.

Exclusivity has become a major factor in negotiations of syndication sales, because very few properties go exclusively to broadcast or cable. Two and a Half Men was the last off-net sitcom to go exclusively to broadcast, and most think that has helped keep the show's ratings so high. Tribune paid a premium for that right, however, and TV stations are unlikely to have that kind of money to throw around again, especially if cable is willing to pony up $1.5 million an episode.

That's why either a Tribune/TBS or Fox/TBS deal was always the most likely scenario. TBS could obviously afford to pay quite a bit for the show, but not enough to make up for the amount Big Bang will make in broadcast barter advertising, estimated to be around $1 million per episode.  Fox was willing to pay enough to beat out Tribune but not enough to get the show exclusively. That economic equation is why a simultaneous broadcast-cable premiere always made the most sense for Big Bang.

While many argue that the TBS run will water down the show's value to Fox, it's also the best-case scenario in terms of exposure. Had the show gone to Tribune, the show would have aired on at least two cable networks -- WGN America plus TBS, FX, Comedy Central/MTV (who bid together and wanted to share the show, according to sources), and USA. Sources say all of those nets introduced bids, although USA was only in the mix for a short time.

The run on TBS also offers the show some time-period protection. Fox will air the show in access periods and late-night, specifically between 6 - 8 p.m. and 10 - 12 p.m. ET. TBS will air it in prime, outside of access slots. With Conan O'Brien joining TBS' line-up in November, TBS is firmly out of the sitcom game in late-fringe, leaving the off-net sitcom business to Fox and Tribune in major markets. Considering how important that business is to TV stations - as evidenced by Fox choosing to stick with its sitcoms over adding Conan O'Brien to its late-night line-up - that should be considered good news for stations.

While Tribune ended up losing the show in major markets, that doesn't mean the broadcaster should be counted out as Warner Bros. starts selling the show across the country. Tribune owns 23 stations, including seven Fox affiliates, one ABC affiliate and one MyNetwork TV affiliate. Although Tribune didn't acquire the show in New York, Los Angeles and Chicago, it has plenty of other opportunities to pick up the show.

And contrary to popular thought, Tribune's Chapter 11 status did not play a role in Tribune's bidding. To the contrary, that Tribune is prepping to exit bankruptcy, which freed it up to bid as aggressively as it felt it needed to. That just wasn't as aggressively as Fox decided to bid.