WHY ‘HILL STREET’ HAS THE BLUES

How could MTM Enterprises let the father of “Hill Street Blues” get away?

Fans and industry people alike were pondering the question Friday even as Steven Bochco, co-creator and executive producer of what many consider this decade’s most ground-breaking series, announced he will make 20th Century Fox his new creative home.

Fox TV President Harris L. Katleman disclosed Friday that negotiations with Bochco were ongoing for three weeks before MTM announced that, in Bochco’s words, it had “invited me to leave” the series. Bochco refuses to say who at MTM asked him to leave, or why.

Bochco will write, develop and produce projects exclusively for 20th Century Fox Television beginning July 1.

A statement from MTM President Arthur Price issued Thursday shed no new light on the reasons for Bochco’s departure.

NBC’s referral of all questions regarding Bochco to MTM, meanwhile, illustrates the often confusing allocation of power between the networks and the production entities that supply their product.

Although NBC insiders categorize Bochco as “difficult,” a producer who insists on getting his own way, the network has no reason to be unhappy with the series which has won 25 Emmys. The series has never been a consistent hit in terms of mass audience ratings. But it attracts what NBC calls demographically desirable viewers--the so-called “upscale audience” that advertisers favor. NBC earns revenue every time the show airs. MTM does not.

Knowledgeable sources have pegged MTM’s deficit on “Hill Street Blues” at about $200,000 per episode, up from about $75,000 when the show began in January, 1981.

That means MTM will accumulate a very large deficit--about $25 million--before it will see the big windfall that syndication will bring. Under terms of MTM’s contract with NBC, “Hill Street” cannot be released for syndication until 1987--after seven seasons, instead of the more typical five.

A former MTM staffer suggested that MTM long has been trying to get the show’s budget under control, but Bochco is largely thought to be disinterested in anything that could detract from maintaining what he considers the show’s creative standards.

Co-executive producer Gregory Hoblit acknowledged that the show has become “much more complex” in the course of its 4 1/2 seasons, with both the cast of regulars and the guest roster steadily increasing in size. And MTM can only expect to see the cost of producing “Hill Street Blues” rise, since it has to pay yearly raises to 16 actors.

But informed insiders suggest that money alone would not have brought MTM to the point of “inviting” Bochco to leave.

Bochco reportedly considered “Hill Street” “his show” and frequently battled with the network to do the show his way.

Also, the apparent demotion of Hoblit--Bochco’s right-hand man since the show’s inception--further suggests that a power struggle with MTM brass was also a significant problem. The MTM statement on Bochco’s departure indicated that current staffers Jeffrey Lewis and David Milch will become executive producer and co-executive producer, respectively.

Fox’s Katleman said Thursday that he has known Bochco since the latter’s days at Universal--where Bochco was story editor on “Name of the Game,” “McMillan and Wife” and “Columbo.”

“He called me few weeks ago and said, ‘Hey, I’d like to talk,’ ” Katleman said. Fox Chairman Barry Diller and Katleman met with Bochco, as did “every studio in town,” Katleman said.

Asked about Bochco’s reputation as a “difficult” producer, Katleman said, “I think that the creative people react to the surroundings they’re in.” Katleman said he did not anticipate problems with Bochco. “I’d rather have somebody that’s passionate about his show than someone who thinks of it as an assembly line and says, ‘It’s just TV.’ ”

Katleman confirmed that Bochco’s first project for Fox will have to go to NBC, under terms of the producer’s deal with the network, which remains intact. Creative discussions with Bochco are expected to begin in May, which would put his first new Fox series on the air about one year from now.

Katleman also de-emphasized any concerns about budget problems with any new Bochco series. Bochco leaves on a Hawaiian vacation next week, after which he will return to supervise production of the series’ last two episodes for this season. Hoblit said Friday that there is “a real lurch taking place” on the set since the announcement of Bochco’s departure.

Bochco co-created the show with Michael Kozoll, who left during the first season. Bochco has headed the series as executive producer since its premiere.

“He really is the father of this thing,” Hoblit said.