MCA Sells Film Rights to CBS, Bypassing Cable

MCA Inc. has sold rights to 10 of its recent movies, including “Born on the Fourth of July” and “Field of Dreams,” to CBS Inc. in an unusual move that will bring the films to network television before they are seen on any pay TV service, an MCA official confirmed Sunday.

The deal comes amid complaints by MCA that its movies, despite enjoying a hot streak at the box office, have been shut out of a pay TV market dominated by Time Warner Inc., which owns both the HBO and Cinemax pay TV networks and the Warner Bros. film studio.

The rights sale is calculated to help CBS boost its ratings, which have lagged behind both NBC and ABC. If successful, the ploy will presumably pressure other networks to consider buying the rights to Hollywood films that they have generally bypassed for a decade. It also could weaken pay TV services’ hold on customers who subscribe on the assumption that they will see major films before they are shown on commercial TV.

MCA’s Universal Pictures unit has been searching for an outlet for some highly popular films that didn’t attract strong bids from either HBO or from its principal competitors, Viacom’s Showtime and Movie Channel units.

None of the pay services “was disposed to come forth and make a deal that was in any way viable,” MCA President Sidney J. Sheinberg said Sunday in confirming the transaction.

Executives for CBS, Time Warner and Viacom couldn’t be reached for comment.

Earlier this year, MCA General Counsel Robert Hadl complained in a Federal Communications Commission hearing that HBO simply wasn’t interested in buying Universal product since its marriage with Warner Bros., a major film supplier. Time Inc., HBO’s parent, acquired Warner Communications, parent of Warner Bros., last year.

“Monopolists behave in a certain way,” one MCA executive said later of the dispute with Time Warner.

A Warner representative didn’t respond directly to the charge at the hearing.

More recently, Time Warner has raised further fears among competitors by negotiating to fund much of Pathe Communications Co.’s pending purchase of MGM/UA Communications Co. in return for extensive long-term rights to distribute MGM/UA films, individuals familiar with the Pathe deal have said. MCA has threatened to sue Time Warner if its dealings with MGM/UA appear further to restrict the cable TV market by capturing MGM’s movies for HBO or other Time Warner cable divisions.

Showtime has agreed to buy “Back to the Future II” and other Universal films produced by Steven Spielberg’s Amblin Entertainment and already holds rights to show “Parenthood,” a Universal film produced by Imagine Entertainment.

But the Viacom-owned services haven’t bid aggressively for the whole Universal slate--and one individual who has dealt closely with Viacom said the company has been pressuring MCA to bolster Viacom’s services financially by purchasing stakes in them.

Universal’s contracts with the Time Warner and Viacom pay services expired in 1988, just as the economics of pay TV appeared to tighten. Other major studios are still supplying the services under existing contracts.

For the past decade, the big networks haven’t been heavy buyers of rights to Hollywood films, which are generally displayed in movie theaters and then on videocassette before moving to the pay TV services and finally to independent television stations.

The Universal films will move straight from the videocassette “window” to CBS, which will air them in 1990 and 1991, individuals familiar with the deal said.

The precise value of the deal wasn’t clear, but it appeared that CBS would pay the studio amounts similar to the fees--between $6 million and $8 million per film--that studios have routinely received from pay cable services.