By Jim Benson
Former Rysher Entertainment founder Keith Samples, who left the syndication business a decade ago after the success of Saved by the Bell to pursue a directing and writing career, has joined Media Rights Capital (MRC) fulltime to spearhead the finance firm’s investments in television.
The 4-year-old Beverly Hills company funds movie, TV and broadband content to the tune of $400 million per year from investors AT&T, WPP Group, Goldman Sachs and the talent agency, Endeavor, which also owns an unspecified minority stake.
Samples—eyeing network, syndication and cable assets that already generate healthy revenue streams or have the potential to grow—Tuesday evening confirmed that he started the new job three weeks ago.
MRC may eventually fund a project for Rosie O’Donnell, who is represented by Endeavor, say industry sources. After passing this week on The Price Is Right, which would have required a move from New York to Los Angeles, O’Donnell could get the funding to pursue her desire to host a game show (perhaps one drawn from an existing format).
Samples did not comment on any scenarios involving O’Donnell.
He accepted the position after meeting with the corporate partners and the head of MRC, former Endeavor agent, Mordecai Wiczyk. Endeavor was not consulted about his hiring, according to Samples.
After taking the job, Samples, who was serving as an outside consultant to the profit participants for The Office, approached all of them, including series star Steve Carell and creator Greg Daniels, who are represented by Endeavor, about acquiring the rights to the off-network comedy from NBC Universal for $275 million.
They agreed and, under the unprecedented deal, which amounted to roughly $2.2 million per episode, NBCU would also have received continued profit participation. The New York Post reported some details of the deal on Monday.
But sources suggest the total value of the MRC deal to NBCU could have reached $340 million if the show makes it to 155 episodes, the minimum amount that would be produced if Carell stays for the entire six years of his contract. The program enters its third full season this fall.
The MRC bid was prompted by Samples’ concern after he learned that Tribune would not be a player until fall, leaving 10 Fox stations as the only launch group in the major markets bidding for it. He believed taking one of two potential broadcast buyers out of the marketplace could hurt the series’ price.
But NBCU never seriously considered the MRC offer, which came June 14, late in the negotiations as it was waiting to hear back from Fox on its offer (which had been delayed by the sale of nine of its smaller stations).
If it had decided to negotiate with MRC, NBCU also feared TBS—long considered the only serious cable contender for the show—would have lowered its price for The Office and raised it for Twentieth TV’s My Name Is Earl.
A source close to NBCU insists that it was on target to make “far more” than MRC’s offer in the first 105-episode sales cycle alone.
By holding back “a ton of digital rights,”the source says NBCU expects to reach $3 million-$3.5 million per episode ($315 million-$367.5 million) for The Office through cash license fees and barter revenue from television and emerging broadband platforms in the first cycle.
But Samples and other syndicators were voicing their virtually unanimous opinions that the NBCU estimates were overblown and that Fox’s offer would be too low without Tribune in the mix. The profit participants became alarmed.
“I went to them and said, ‘I think the value of the show is worth more,’ and asked if they were okay with me looking around for aggressive ways (to boost the price),” Samples says. “They were. It was a good alternative. It was presented (to NBCU) and passed on. It’s pretty simple when you cut through it all.”
And there were also concerns among those close to the negotiations that by allowing TBS to exclusively air two episodes per week of The Office until 2009 at lower cable CPMs, advertisers would be reluctant to pay the higher broadcast rates when the simultaneous Turner-broadcast barter run starts in two years.
But NBCU disagreed, seeing broadband as a great ad revenue equalizer when “cumed” with TV barter, which consists of three 30-second national spots in each off-net episode.
NBCU also considered the MRC offer to be a one-time payment to buyout all existing and future syndication sales cycles, including digital rights. But Samples insists that isn’t true, since MRC’s bid would have allowed NBCU to continue to share in the upside.
“I don’t understand that,” he says. “The best deal is the best deal. They just have to negotiate.”
Additionally, NBCU was reluctant to turn the rights over to MRC, which they considered to simply be a “middle man” and not an "end user" like a station group or cable network. But sources close to Endeavor say that was never an issue during the negotiations.
And Samples dismisses the "middle man" label, since it only takes three or four major group deals to wrap up 80-90% of the domestic sales revenue these days. He says he could have easily handled that alone or in combination with an outside firm like Mort Marcus and Ira Bernstein’s Debmar-Mercury.