NBC Renews ‘Cheers’ but Pays 10% Less Than Before

In the latest example of how Hollywood is coming to grips with the cost of TV production, NBC on Thursday renewed the hit comedy “Cheers” for an 11th season--but for a lower fee than it paid last year.

A “Cheers” renewal was crucial to NBC because of the show’s importance in the network’s Thursday night lineup, the bulwark of its prime-time schedule.

The hit sitcom gained notoriety last year when NBC paid Paramount Pictures a record $65 million for 26 episodes of what was then the top-rated series in prime-time. At $2.5 million per episode, the renewal symbolized how programming costs were out of control.

In the current season, ratings for “Cheers” have slipped 18%, and the series is now ranked fourth. In addition, NBC lost money last year, the result of lower ratings, weak advertising revenue and higher news and sports costs.

Although terms of the renewal were not disclosed, industry sources said NBC will pay about $2.25 million for each of the 26 new “Cheers” episodes for 1992-’93, or $58.5 million--a 10% drop.

Over the last several months, the networks and Hollywood studios have engaged in an aggressive campaign to reduce the costs of producing prime-time TV series.

Despite the lower license fee, the entire “Cheers” cast will be returning, including star Ted Danson, who earns about $250,000 an episode.