Sizing up the 'ER' deal Analysis: TV insiders say pact doesn't signal a trend, merely the need to lock up a blockbuster.

January 16, 1998|By David Zurawik | David Zurawik,SUN TELEVISION CRITIC

LOS ANGELES -- If money changes everything, as the saying goes, how will the unprecedented $13 million an episode that NBC agreed to pay for the hit series "ER" alter television?

That's the question being asked by almost everyone here in the network and television production community, the day after NBC and Warner Bros. Television, which owns "ER," announced a deal worth $858 million over the next three years.

The math is staggering. NBC will pay Warner Bros. $286 million a year for the right to air 22 episodes of the medical drama each season, starting next fall and continuing through the 2000-2001 television season. That is more than 6 1/2 times the $1.95 million per episode NBC is paying this year.

But while the numbers are huge, the deal is not likely to cause dramatic change in the landscape of prime-time television, according to Hollywood producers and network executives.

They dismissed as unfounded media speculation that the "ER" deal would lead the way to a two-tiered system -- as in professional sports -- with huge paychecks for the most coveted talent and the rest of the lineup filled out with low-rent journeymen.

"It remains to be seen what the overall ramifications are," Jamie ,, Tarses, president of ABC Entertainment, said yesterday. "But you have to start with the fact that 'ER' is a really rarefied situation. The performance of that show since the moment it came out of the gate was extraordinary.

"You couple that with what NBC experienced in the last couple of weeks -- both in 'Seinfeld' stepping down and the loss of football -- and I think it's unique. So, no, I don't think you're going to find every time you have a re- negotiation now, we're looking at $10 million-plus an episode."

Leslie Moonves, president of CBS Entertainment and the former chairman of Warner Bros. Television who negotiated the initial deal for "ER," agreed: "There is only one 'ER'; it's a monster. It is huge. It doesn't win, it wins by a mile. So, I don't think you can say, 'Since "ER" goes for "X," everything else will follow suit.' "

Changes wrought by the big bucks NBC shelled out for "ER" are going to be more subtle and mainly behind the scenes. The message of the sale is in what it tells us about network priorities in a 100-channel universe: that in order to survive, a network can't be just another channel. It has to be the channel. And to do that, it must have top-rated shows.

"What happened with 'ER' is an accident of timing, a freak set of circumstances," said Steven Bochco, whose company has produced such hit series as "Hill Street Blues" and "NYPD Blue."

Both he and Tarses were referring to Jerry Seinfeld announcing last month that "Seinfeld" would not return next year, depriving NBC of the second-highest-rated show on television. "Seinfeld" is a cash cow that adds some $200 million a year to the NBC coffers despite the $5.5 million NBC pays for each episode of the series.

In addition to "Seinfeld," NBC lost the rights to carry American Football Conference games to CBS on Monday. Then, on Tuesday, ABC outbid the peacock network to retain rights to "Monday Night Football."

That string of losses helped make it all but imperative that NBC retain rights to "ER."

So, how will the deal change the business of television?

"I think networks are going to try to make long-term deals in which shows don't come up so soon for re-negotiation," said Moonves. "But that's already been happening at ABC and elsewhere, and that's risky, too."

Take the case of Jenny McCarthy's "Jenny" at NBC. The network got in a bidding war for McCarthy and contracted for 22 episodes instead of the usual six or 13 from a new series.

But the series is a bomb, and NBC this week pulled it from the schedule after airing only 10 episodes. NBC will probably wind up eating 12 episodes at about $1 million each.

What the "ER" deal really underscores is how committed the networks are to the belief that they must remain the mass medium of national life. That is, if an advertiser wants to go coast-to-coast with one buy, he has to believe the networks are the only place to go. That is how the networks have managed to keep pushing up ad rates year after year, despite the steady erosion of their audience to other channels.

"The series like 'ER' and the franchises like 'Monday Night Football' that can do that will get top dollar. That's the lesson of the 'ER' deal," said ABC entertainment chairman Stuart Bloomberg.

And, for the first time, the networks are willing to let the handful of such shows be loss leaders.

The math on "ER" says no matter how much NBC raises its rates next year above the ceiling of $575,000 per 30 seconds now charged by "Seinfeld," $13 million cannot be recouped.

There are eight commercial minutes in an hour. Even at $600,000 per 30 seconds, that only amounts to $9.6 million.

Don Ohlmeyer, the West Coast president of NBC, says his network will make money through advertising alone next year on "ER," but no one here agrees.

"You're not going to make it on ads alone," Tarses says. "You have to consider the ancillaries."

The ancillaries involve extra money for network-owned stations, who get bigger news audiences after "ER"; the promotion on Thursday nights that you can do for other shows; the higher rates you can charge in shows preceding "ER"; and the way your sales staff can package less desirable shows with "ER" for ad buyers.

"Factoring in that, is it a good deal for NBC?" Tarses said. "Yes, it's a very good deal."

Pub Date: 1/16/98

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