Programming

What Charlie Sheen's Meltdown Means For Stations

While they'd like to have more episodes, reduced licensed fees are good, too 2/25/2011 04:06:00 PM Eastern

Sean Compton, Tribune's president of programming and entertainment, said on a panel at this year's NATPE that he just hoped Two and a Half Men star Charlie Sheen would make it through 35 more episodes.

Looks like his concerns now ring more true than ever.

After Sheen's radio rant Thursday and subsequent show shut-down, that scenario is in real danger of becoming realized.

If this is the end of the road for Men, it could have widespread financial ramifications for CBS, Warner Bros., and the TV stations that air the program in syndication, but not all of those financial effects are negative.

Sheen was signed through next season, which was to total 24 episodes. Shutting the show down for just the rest of this season means losing eight episodes. That will net a loss to Warner Bros. of approximately $10 million, according to sources, although that loss will be filtered down through profit participants, including creator and executive producer Chuck Lorre and Sheen himself. For TV stations, losing eight episodes out of an ever-cycling spate of shows isn't very impactful.

Effects of an Early Exit

The bigger losses come if season nine does not take place.

Two and a Half Men's first cycle is capped at nine seasons. If the show ends right now -- and it's anyone's guess as to whether that will happen -- Two and a Half Men's first cycle will end in December 2013, shortening the original deal by 39 weeks and causing the second cycle to kick in early.

Should that happen, Warner Bros. will take approximately $80 million in losses, assuming the show earns about $2 million per week in cash license fees. Warner Bros. also earns approximately $2 million per episode in barter advertising sales, but less original episodes won't effect those sales.

For stations, the show's early departure from CBS would be a mixed blessing.

Tribune, the show's main launch group, would prefer to have all the episodes that Warner Bros. can produce. Right now, there are 177 episodes of Two and a Half Men in the can, which is more than enough to sustain a hit sitcom for years. The similarly troubled Roseanne ended up with 220 episodes, while the far less problematic Seinfeld, one of TV's biggest shows ever, wrapped with 180 episodes and is still going strong on broadcast and cable platforms.

"We support Warner Bros.," says Tribune's Compton. "They've provided us with a wonderful show and I am grateful that second cycle is done and that we have it. Obviously, we hope it goes into the ninth season and we get more episodes. Should the show end now, it wouldn't be the end of the world for us, but obviously we would much prefer to have north of 200 episodes."

Still, if Two and a Half Men's first cycle ends early, its second cycle starts sooner, which means that stations start paying less for the show.

"We love and appreciate Two and a Half Men in syndication. We value it immensely. But if for some reason we get to the second cycle sooner, great. The sooner we get to the second cycle price the more money we save," said one station executive who airs the show in several markets.

Currently, Two and a Half Men's second cycle is set for seven years, which begins in 2014 and ends in 2021. If next season does not happen, that term will be moved up by a year. 

Hidden Repercussions

One hidden impact of an early network departure for Two and a Half Men would be less promotion and lower ratings for the show in syndication. Syndicated sitcoms -- take CBS Television Distribution's Everybody Loves Raymond, for example -- tend to perform better in both their network and syndicated runs if both are airing simultaneously. Should CBS end up cancelling Men, the network's promotion of the show in such high-profile vehicles as NFL football and across CBS' high-rated primetime also will cease. Lower ratings mean less revenue via barter sales, while license fees will remain static.

At this point, though, Sheen's antics have not affected Two and a Half Men's monster ratings in the least. It's still a huge performer in syndication, cable and network prime. It's by far syndication's top-rated off-net sitcom and it's primetime's highest-rated comedy among both viewers and adults 18-49. And even if the show ends earlier than expected, it will remain one of syndication's few multi-billion-dollar earners, with a long afterlife on TV stations and cable networks.

"All things being equal, everybody would prefer that even with Sheen's hijinks, that the show comes back and everything stays on track," says Bill Carroll, vice president, programming, Katz Media Group.

November