'Office', 'Earl' Syndication Deals
Different strategies mark NBCU, Twentieth approaches By Jim Benson
Weeks of second-guessing and suspense culminated last week with the syndication sale of NBC Universal's The Office to TBS and 10 Fox stations. Meanwhile Twentieth TV's My Name Is Earl went solely to TBS for fall 2009.
The Office is on track to wind up with $1.8 million-$2.0 million per episode in cash and a total of $2.5 million-$3 million per episode once ad revenue from the barter spots is figured in. It could get even more in the second cycle if the show continues to grow in the ratings.
Twentieth got more than $600,000 per episode from TBS, but, unlike NBCU, it is holding back from rolling out Earl to stations until fall, when Tribune, one of two major players in the top markets, is back in the game.
In the midst of an ownership transition, Tribune had previously indicated that it will forgo new product until it sees how its two new off-net sitcoms, Two and a Half Men and Family Guy, perform this fall (B&C, 6/4, p. 4).
But NBCU put The Office on the station block anyway this spring. If it had waited until September, there would have been two station groups competing to bid up the price, and the acclaimed comedy could have possibly gone into the market in a stronger position.
With NBC moving it to 9 p.m. Thursdays this fall, the network thinks the male-skewing series can grow against primarily female competition from two very strong shows, ABC's Grey's Anatomy and CBS' CSI.
If NBCU had tried to reverse course by pulling the comedy now and bringing it back in the fall, syndication sources say, stations would have smelled blood and lowered their offers even further from the tepid greeting that NBCU received in this round.
The industry has reacted with puzzlement to NBCU's sales strategy. Even key profit participants were said to be concerned that Fox would lowball its offer without any competition for the series. “They got outplayed by the guys at Fox,” carps an individual close to the situation.
Among the executive producers on the show is Ben Silverman, the recently named co-chairman of NBC Entertainment and Universal Media Studios, whose interest in The Office has been put into a blind trust. While he steered clear of the negotiations, Silverman says he was nevertheless thrilled with the outcome.
“I'm really psyched,” he says. “The show has such a passionate following, and I'm so confident about how well it will do off-network on broadcast and cable. The barter component is fantastic, since the show delivers an upscale, concentrated, great demo that works well for the advertiser.”
According to sources, Silverman's fellow co-chairman, Marc Graboff, led NBCU's off-net strategy for the show and raised hackles from profit participants when NBCU initially intended to offer the strip version of the off-net episodes to cable before broadcast.
In a compromise of sorts, TBS acquired The Office to run episodes from the previous three seasons as a weekly one-hour block with no barter. The exclusive run starts this fall and goes through September 2009, when the simultaneous, multi-year, broadcast-cable strip barter window begins.
Sources close to TBS say the cable network paid around $600,000 per episode for both The Office and Earl. If they're starting at the same price point, Earl could come out ahead of The Office in the end because stations may be willing to pay more for a show without previous cable exposure.
TBS appears to have substantially raised its bid for The Office after NBCU agreed to the exclusivity provision. But just how much higher is a matter of debate. Some estimates approach $750,000 per episode.
NBCU accepted Fox's $200,000-$300,000–per–week, or $500,000-$750,000–per-episode, offer for fall 2009 broadcast rights to The Office. Fox gets the buzz-worthy show for multiple years in 10 major markets, where it may end up on nine with duopolies affiliated with MyNetworkTV.
Twentieth, which rushed Earl out to compete against The Office for cable dollars, will wait until fall to launch broadcast sales. President Bob Cook suggested last week that Twentieth could still accept a preemptive offer from its sibling Fox station group, although that's considered unlikely.
On the cable side, meanwhile, NBCU and Twentieth lost a key bidder when, sources say, Comedy Central bailed out after Daily Show host Jon Stewart's salary demands climbed with NBC expressing interest (B&C, 6/18, p. 3).
But the cable network would have had a hard time competing against TBS anyway. Since syndicators “cume” ratings of off-net strip episodes between broadcast and cable, the barter advertising is worth more at the higher-rated Turner network than at Comedy Central.
Ireland Back to GE
NBC Universal Stations chief Jay Ireland is leaving his role for a more senior position at NBCU parent company General Electric.
Ireland will leave his post as president, NBC Universal Television Stations and Network Operations, in mid July and become president/CEO of GE Asset Management. NBCU President/CEO Jeff Zucker announced Ireland's departure last week. Zucker said in a memo that he expects to name a “leadership transition” over the next couple of weeks.
The move comes at a time when many of the company's major owned-and-operated stations are posting middling ratings and its syndication arm has suffered recent misses like The Megan Mullally Show. NBC's owned-and-operated stations in big cities like Los Angeles and Miami have posted year to year ratings drops for a little more than a year. The stations have been hampered by NBC's primetime programming woes—the network finished last season in fourth place.
Ireland's promotion marks his return to GE management. Before joining NBC in 1999, he had been CFO of GE Plastics since '97. He started his career with GE in 1980 in the company's financial-management program after three years as a U.S. Army officer. He has been in his current role since December, overseeing all of NBCU's TV stations, the Telemundo network and its 16 Spanish-language stations, domestic first-run syndication, affiliate relations and network operations.
Ireland will lead GE's global investment, which manages some $200 billion, and he will become a member of GE chief Jeff Immelt's Corporate Executive Council and GE Capital's board of directors.
Said Zucker, “Jay has been one of the best Stations executives in NBC's history, with a long list of notable achievements to his credit.”—Anne Becker
Upfronts Up Only 1%
The broadcast upfront market is officially closed, with the networks raking in a total of $9.1 billion, about 1% up from 2006.
The CW completed its final deals last Friday for a total take of $650 million. “In just our second upfront, we exceeded our revenue goals, adding over a dozen new advertisers with great strength in categories like wireless, retail and theatrical, a bull's-eye for The CW's young adult viewers,” says Executive VP of Sales Bill Morningstar.
The network's 18-34 target demo is an attractive one for advertisers. And The CW has had much success with integrated advertising, such as the story-driven “content wraps.”
CW posted 11%-12% gains in primetime cost per thousand (CPM), the largest of any network. ABC's CPMs are up 8.5%-10% followed by CBS and Fox, with 8%-9% each, and NBC, with 4%-6%.
CBS, the No. 1 network in viewers, had the biggest take in the market with $2.5 billion, followed by ABC with $2.4 billion, Fox with $1.9 billion and NBC with $ 1.8 billion.
This year's market got off to a lethargic start as buyers parsed Nielsen's commercial ratings data and networks pushed for some credit for DVR playback. But NBC Universal's wide-reaching, nearly $1 billion deal with Group M, negotiated on live-plus-three commercial-minute ratings, kick-started the market and helped set a metric precedent. And while overall broadcast viewing is down, it is still the most effective way to reach a broad cross-section of consumers.—Marisa Guthrie
USA OKs Mate To Wrestling
USA Network has greenlighted a companion to its WWE wrestling fare: a reality show hosted by Jackass and Wildboyz star Stephen Glover, a.k.a. Steve-O.
Dr. Steve-O, a sort of Queer Eye-inspired makeover series, will see the gross-out daredevil traveling around the country to “de-wussify” wimpy guys by making them perform his trademark breed of crazy stunts. The weekly show will run on Mondays at 11 p.m. ET, directly following USA's WWE Monday Night Raw. USA has ordered seven episodes from Bunim/Murray Productions.
USA has spent years looking for a companion to Raw, which regularly ranks as the most-viewed weekly cable program.—Anne Becker