Oprah Winfrey plans to stay on the nation's TV screens through 2007-08—and a deal with the ABC owned stations is nearly signed, sources say—but not everyone is happy to hear that daytime-TV staple Oprah Winfrey Show will be around for five more years. She had announced she would quit after the 2005-06 season.
Many TV stations paid huge license fee increases to King World for Dr. Phil because they believed that, starting in fall 2006, they would be able to move the show to 4 p.m. to lead into their local news.
"People bought Dr. Phil under the premise that they would overpay for the show in the first years so they could own it later and upgrade," says one industry executive. "Now those people are furious."
In many major markets, Oprah runs at 4 p.m., a prime daytime spot that takes viewers right into a station's early news. Because of the importance of that lead-in to their bottom line, stations are willing to pay top dollar for the syndicated show they depend on to deliver the biggest news audience. When King World renewed Dr. Phil for two years earlier this year, stations collectively paid license fees of about $2 million a week.
That's double what they paid when King World rolled out the show.
When Oprah and her production company, Harpo, helped launch Dr. Phil, they prohibited it from going head-to-head against Oprah in any market. Unless Dr. Phil can maintain his current rating strength through at least 2008, a tall order for any show, it is likely he will never get the chance to be daytime's top talker. It also will be harder for stations to make their money back on Dr. Phil, because they won't be able to charge as much for advertising at 3 p.m. as they could at 4 p.m.
"It's the equivalent of having him not as the opening-day pitcher but just part of the rotation," says one industry analyst.
Still, syndicators say daytime TV is better with Oprah on the air than without. "It's healthy for the syndication business to have multiple hits," says one executive. "Stations know that there are hits on the air and that they have to pay good money for them."
Sources say that, as part of her new contract, Winfrey will return to making some 35 weeks of originals a year. She had been winding down and was going to produce only 20 weeks of originals in 2004-05 and 15 weeks of originals in 2005-06. She also is expected to produce more originals starting as early as next year, after doing 26 weeks this season.
The return of Oprah also means that other syndicators have to adjust their development plans. If Buena Vista was considering trying to win the valuable 4 p.m. slot for Wayne Brady on the ABC-owned stations, that opportunity is now closed. And, if Warner Bros.' Ellen Degeneres does well next year, it also will have less chance to be upgraded into more valuable early-fringe time periods.
"The economics of what you develop has changed going forward," says one executive. "The highest- paid, highest-rated time period is no longer available."