NEWS ANALYSIS : MCA Has Been Left Out in Cold on Cable Deals : Entertainment: It is the only major studio not selling films to pay TV. It missed a chance in the 1980s. It may be looking for another one.

Hit films such as “Bird on a Wire” and “Back to the Future 3” are a staple of pay TV.

But unresolved differences between MCA Inc. and the leading pay networks have kept those and many other movies from MCA’s Universal Pictures off pay cable in recent years.

For three years, MCA has bypassed cable and sold a slate of films directly to network television. Critics say the move could be costing the company $25 million to $75 million annually in lost revenue.

MCA is the only major entertainment company that has no long-term deal with Home Box Office or Showtime, the two largest pay cable networks. It’s a problem MCA doesn’t need at a time when it’s still adjusting to its new Japanese owner, Matsushita Electric Industrial Co., and dealing with an 18-month dry spell at the box office.

In Hollywood folklore, MCA still nurses its old animosity toward Home Box Office in particular, because it lost a fractious battle in the early 1980s to diminish HBO’s grip on the pay cable business.

But the portrayal of MCA executives as a bunch of ideologues is ridiculed by MCA President Sidney J. Sheinberg, who says: “That’s pretty stupid. We wouldn’t leave 20 cents on the table if we saw it there.”

Sources in the pay cable industry tend to agree. It was stubbornness, not ideology, that landed MCA in its predicament. MCA demanded too rich a deal in the late 1980s, at a time when other studios and independent producers were willing to compromise. In the end, MCA was left out in the cold, and relief is still not in sight. Showtime, for one, has let it be known that it won’t be shopping for another big studio deal until at least 1994.

Against that backdrop, MCA has done its best to recoup lost revenue. As the company points out, higher fees can be negotiated in other ancillary markets for movies that have not been “chewed up” by repeated exposure on pay cable networks. In 1990, MCA sold a slate of movies directly to CBS; in 1991 and 1992, NBC has been the buyer.

Although the terms were not divulged, CBS reportedly paid between $6 million and $8 million for each film in 1990. Those rates would represent a handsome premium over the $2 million to $3 million CBS might have paid for average movies that aired first on pay cable, but not enough to offset the missing pay-TV revenue. A blockbuster movie, for example, may reap $12 million to $15 million from pay TV. By some estimates, pay-TV revenue could have added at least $25 million--and perhaps as much as $75 million--to MCA’s coffers last year.

Agents and lawyers have watched the situation warily, because top talent is accustomed to the exposure their films receive on pay television, not to mention the added revenue. One lawyer says he has sought concessions from MCA to compensate for the absence of the pay-TV deal. So far, however, the bypassing of pay cable “hasn’t really affected their product flow, or the type of creative people who have worked there,” says one agent.

To prove that neither side is intransigent, MCA is completing arrangements to send five movies (including “Cape Fear”) directly to Showtime while eight other titles from the 1991 slate go straight to NBC. “We have no religious fervor about going to pay (television) or skipping pay,” insists Thomas Wertheimer, the MCA executive vice president who oversees pay-TV negotiations. “We’re going where we can get the best deal.”

But the five-picture sale to Showtime illustrates how dramatically the world has changed since the early 1980s, when a strong studio like MCA could insist that no pay service would “cherry pick” its titles. Indeed, MCA was able to negotiate one of Hollywood’s richest deals in 1984 with both Home Box Office and Showtime, licensing movies to both services on a non-exclusive basis for six years.

By mid-1984, however, an unexpected slowdown in the growth of the pay-TV industry prompted HBO to seek easier terms from studios. Apparently, Universal turned a deaf ear. For whatever reason, MCA failed to renegotiate and extend its pay-TV agreements, which lapsed after the 1988 film slate. The pay-TV services filled their inventory with movies from other major studios and independents like Imagine Films (which, ironically, releases its movies theatrically through Universal).

In 1991, subscriptions for the top four pay services actually declined by 2%. As a result, the pay services are slashing the rates they’re willing to pay for theatrical movies. Given their limited budgets, HBO and Showtime are inclined to invest more money in original programming.

Will other studios someday be forced to “unbundle” their film slates, seeking ad hoc solutions like MCA in the pay cable marketplace? Wertheimer demurs.

Not even MCA wants to be the pioneer with arrows in its back.