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'New Fox' will turn back the clock on network ownership of shows

'New Fox' will turn back the clock on network ownership of shows
Dana Walden and Gary Newman, co-chairmen of the Fox Television Group, address reporters during their executive session at the Fox portion of Television Critics Assn. at the Beverly Hilton Hotel on Aug. 2. (Frank Micelotta)

The future of Fox after its parent company 21st Century Fox sells its studio to the Walt Disney Co. may look a lot like broadcast TV’s past.

Fox Television Group co-chairman Dana Walden told reporters Thursday at the Television Critics Assn. press tour in Beverly Hills that the network, referred to as “New Fox,” will be helped by making programming decisions that are not dictated by whether a series is owned by its studio.

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“It will be the only network to operate with complete independence,” Walden said. “We see this as a great opportunity.”

Once Disney completes its $71 billion acquisition of 21st Century Fox’s production studio and other entertainment assets, Fox will be the only major broadcast network not part of a conglomerate that owns a production studio.

Walden said that will free the network from favoring programs created by a studio owned by its corporate parent over other projects that come from outside production entities such as Lionsgate, MGM, Warner Bros. and Sony, none of which are aligned with major broadcast networks.

“We want to be their first choice at the big four networks,” she said.

For nearly 25 years, federal regulations limited how much programming a broadcast network could own. Once those rules were abolished in 1993, Disney acquired ABC, NBC bought Universal Studios and Viacom merged with CBS. (The still nascent Fox network was not subject to the rule due to the limited number of hours it broadcast at the time).

The rule change allowed networks to become profit participants in the prime-time series programs they put on their air, giving their parent companies the chance to benefit from revenues generated by selling repeats to TV stations and cable networks, international broadcasters and, more recently, streaming services. The networks have been filling their schedules with those programs ever since, with ownership often being a deciding factor in the pick-up of a series.

Walden noted that the number of prime-time programs ordered from what she called “independent” studios dropped from 16 this past season to just six on the 2018-19 TV slate.

“Indies have gotten the squeeze,” she said.

Walden said buying from outside suppliers increases the chances for ratings success. The three biggest scripted hits of the past TV season — ABC’s “Roseanne,” CBS’s “The Big Bang Theory” and NBC’s “This Is Us” — are not owned by the networks that aired them.

But a major reason networks have increased their ownership stakes in programming is the growing challenge to cover the cost of a series solely form advertising revenue. As consumers face more viewing choices, networks have been squeezed by the decline in ratings.

Many scripted series programs, especially long-running hits, are not profitable with just the revenue generated from their runs on a network.

Walden acknowledged that having profit participation in a program is an economic necessity in the current TV environment and that “New Fox” will be seeking at least part ownership in the programs it buys from the studios.

Whether Walden and Fox Television Group co-chairman Gary Newman will be the ones doing the show-buying for “New Fox” remains an open question. Walden is reportedly headed to Disney to oversee ABC’s network and production studio once the Fox acquisition is closed.

Peter Rice, president of 21st Century Fox, is expected to join the acquiring company as head of Disney’s television group.

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Walden and Newman did not comment on the reports and offered no new information on who their future employers will be.

“Some things have yet to be resolved, including the management structure at both companies and what the future holds for Gary and me,” Walden said.

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