Analysis: ‘Big Bang' Pulls in Big Bucks

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

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