Warner’s Million-Dollar Rabbit : TV’s Classic Cartoons Earn Top Ratings, Huge Profits for 32 Years

Television viewers are notoriously fickle. Star-studded, multimillion-dollar programs come and go each season, skewered by ratings that reflect America’s quicksilver tastes. So what kind of show could deliver top ratings and untold profits for 32 consecutive years?

Try “Bugs Bunny,” “Looney Tunes” and “Merrie Melodies” from Warner Bros. For more than three decades, Warner has claimed a No. 1 rating for its Saturday morning reruns of the classic cartoons originally made for the Silver Screen.

“Bugs” reaps an estimated $8 million to $10 million annually--nearly all profit since Warner recouped the production costs long ago--for a one-hour appearance on the Saturday morning ABC lineup. From its vault of about 750 “short subjects,” which typically run five to seven minutes, Warner rotates different batches of cartoons to other TV markets as well.

In the Monday through Friday “strip” syndication business, Warner recently has earned an estimated $8 million annually from local TV stations and the sale of ads, while still more income flows from cartoons licensed to Nickelodeon, the basic cable TV service.

This month, Warner moved all of its “Looney Tunes” business from syndication to the Fox television network, where higher ratings are expected to result in a 25% surge in the ad rates the cartoons can command. Competitors give Warner top marks for exploiting the shows.

“This is as good as it gets in my book,” says Haim Saban, a Hollywood producer and syndicator who has nine animated cartoons airing in the U.S. market. “These guys are incredible.”

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Much of the credit goes to veteran Warner executive Edward Bleier, who introduced Bugs Bunny to Saturday morning television audiences in 1961, when he worked for ABC.

Eight years later Bleier joined Steven J. Ross, now Time Warner Inc. chairman, when Ross’ Kinney Service Corp. acquired the Warner studio. Warner executives won’t divulge the profit they’ve reaped from the cartoons since that $400-million merger, but the old “Looney Tunes” and “Merrie Melodies” have likely paid for the deal through reruns and merchandising.

Warner Bros. Chairman Robert A. Daly, who licensed the cartoons for CBS in his days as a network executive, says: “Ed has done a marvelous job in handling the library, in packaging and selling these cartoons to television and to cable.”

Still, for all its success in television licensing, Warner Bros. trailed Walt Disney Co. in its efforts to exploit its animation library in merchandising, theme parks and new feature films or television production during the 1980s.

While a new Disney management team aggressively milked its animation franchise, Warner was still coping with the aftermath of losses from the purchase of Atari, which totaled $875 million by mid-1984.

The debacle forced Ross to divest all but Warner’s core entertainment and music businesses before he could begin to build anew with acquisitions of Chappell music publishing, Lorimar Telepictures and--in his career “capper”--complete the $16-billion merger with Time Inc. in 1990.

In trying to make up for lost time, Warner has acquired 50% of the Six Flags amusement parks and opened 12 retail stores in the last 12 months. The marketing of the characters has been aggressive at the parks.

At the stores, more than 50% of the sales come from “Looney Tune” merchandise, featuring Porky Pig, Daffy Duck, Elmer Fudd, Tweety and Sylvester, Yosemite Sam, Road Runner and others, in addition to most-popular Bugs Bunny.

Warner Bros. has revived its animation business in television, introducing new series such as “Steven Spielberg Presents Tiny Toon Adventures” and “Batman: The Animated Series.”

The potential profit of a new character can be extraordinary, as Walt Disney Studios President Richard Frank recently told a group of entertainment industry executives gathered at an Oppenheimer & Co. conference. According to Frank, “The Little Mermaid” has generated $2 billion in revenue since that Disney character debuted in the 1989 theatrical film.

As yet, however, no new feature-length film has come off Warner’s drawing board, to the dismay of some on Wall Street.

“I think it’s ridiculous that they don’t make animated feature films using their classic cartoon characters,” one analyst grumbles privately.

Making an animated full-length feature poses a dilemma for Warner, because of the very success of its television licensing over the last three decades.

“The American public is seeing these characters on television seven days a week,” explains Warner Bros. Chairman Daly. Unless the studio comes up with something extraordinary, it would be difficult to lure a paying audience to the theater.

In addition, the Warner Bros. animated characters may be best suited to the one-reel, seven-minute comic routines conceived initially.

Unlike the sweet characters created by Walt Disney for feature-length fairy tales, the Warner animators showed their tart, acerbic wit from the start, often spoofing songs (“Merrie Melodies”) or folk tales.

The Warner characters are akin to stand-up comics: funny in short doses but potentially tiresome in a 90-minute performance, observes Hank Saperstein, chairman of U.P.A. Productions of America, which owns the last major animated library (“Mr. McGoo,” “Dick Tracy”) still in private hands.

Yet the brevity of the individual “Looney Tunes” make them highly suitable for television, where the cartoons can be packaged and reshuffled in endless combinations for an audience that turns over every four or five years. Most of the pratfalls and comic routines are timeless.

“The kids don’t look at the copyright; they could care less,” Saperstein says. Wistfully, he recalls that in the 1960s, prior to Warner Bros.’ sale, he proposed acquiring the TV rights to “Looney Tunes” for $5 million. Jack Warner’s elder brother, Albert, “gave it serious consideration,” Saperstein says. “Today, you couldn’t buy it at all.”