NBC, Paramount Reach Pact on ‘Cheers’

NBC, after months of tense negotiations and threats of canceling its top-rated show, has reached a tentative agreement with Paramount Pictures to renew “Cheers” for a 10th season.

Under terms that are certain to inflate already spiraling program costs, the network has agreed to pay Paramount $74 million for 26 episodes of the series next year, industry sources said.

That is considerably below the $120 million that Paramount originally sought when it opened renewal negotiations in January, but it still makes the hit comedy the most costly TV show in the history of television.

The renewal terms also ensure that Paramount will no longer lose money producing “Cheers” for NBC--a demand that studio executives had taken a hard line on. “Cheers” costs about $60 million a year to produce.

Paramount and NBC officials declined to comment.

NBC, the dominant network in prime time for the past five years, has been facing considerable pressure this year because five of its established hit shows were up for renewal. Last month, NBC renewed “Matlock” but has yet to renew “The Cosby Show,” “A Different World” and “Golden Girls.”

Renewal of those shows is crucial since NBC has slipped this season from its customarily wide margin in the ratings to hold only a narrow lead. A failure to renew “Cheers”--with the series perhaps moving to another network--would almost certainly knock NBC out of first place next year.

The renewal negotiations surrounding such hit shows as “Cosby” and “Cheers”--last year the producers of “Cosby” tried to extract a $100-million “signing bonus” to renew the show for a seventh season--points up the growing rift between the networks and Hollywood over who will foot the bill for escalating program costs.

Paramount based its asking price on the advertising revenue that NBC earns from the “Cheers” time period on Thursday nights, which is about $115 million annually. The show costs Paramount $2.2 million per episode to produce, but NBC pays Paramount a license fee of only $1.25 million. Nonetheless, Paramount had earned hundreds of millions by selling the reruns of “Cheers” to local TV stations.