What’s the Real Price of Rising TV Deals?

When Columbia Pictures paid Jim Carrey $20 million to star in the movie “Cable Guy,” the other studios howled that the figure would prompt a crazed escalation in production costs.

Television appears to be undergoing a similar wave of largess as new projects are being considered for next season, causing network executives to worry that the spending spree will not only upset prime-time’s economic structure but also prevent fresh ideas from getting on the air.

Skyrocketing expenses come in the form of commitments to actors, producers and studios. Often made without a script or even a premise, these deals call for networks to shell out millions of dollars in “penalty payments” if a series doesn’t get produced, virtually assuring that certain projects will make it on the prime-time schedule.

During the last few months, the price of those deals has risen dramatically. Networks that once paid a producer’s or star’s salary (perhaps $50,000 to $100,000 per episode) multiplied by a number of episodes as a penalty are now in some cases guaranteeing license fees--the amount paid to produce an episode--generally running 10 times as high.

Fox, for example, pledged license fees valued at $12 million or more on two new dramas: “Roar,” a mythic adventure story from Shaun Cassidy (“American Gothic”) and Ron Koslow (TV’s “Beauty and the Beast”); and “The Visitor,” a sci-fi concept from the producers of “Independence Day.” Based on those looming penalty payments, sources say both shows are essentially sure bets to make Fox’s schedule next season.

In the frenzied competition among the networks, each has been drawn into making such agreements. ABC committed $15 million to an action show based on the movie “Timecop,” and CBS signed major deals on projects from former “Home Improvement” writer Howard Morris and “The Single Guy” producer Brad Hall.

Several stars already have seven-figure commitments for next season as well, including Kirstie Alley (teamed with the producers of “Friends”) and Tony Danza at NBC, Tom Selleck at CBS and “Roseanne’s” Laurie Metcalf on ABC. In some instances, networks have even kicked in series the star would only produce, as CBS did by giving Bill Cosby three shows in addition to his new sitcom.

“Every day we break new records in terms of how absurd some of these deals are,” said ABC Entertainment Chairman Ted Harbert. “Jamie [Tarses, president of ABC Entertainment] and I just shake our heads.”

“The cost of failure keeps spiraling upward,” added NBC Entertainment President Warren Littlefield. “If we’re not careful, the television business is going to resemble the motion picture business, and we know that doesn’t work.”

Television insiders attribute the spate of such contracts to a variety of factors, beginning with management changes at ABC, CBS and Fox.

“You have a lot of companies that are saying, ‘We need results, and we need results now,’ ” Littlefield noted.

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In addition, competition has increased, leaving networks desperate to find hit programs just to maintain current audience levels. A strong advertising market has also lined network pockets (prime-time leader NBC sold a record $2 billion in ad time before the season began), inspiring networks to invest in top stars and producers hoping to win a larger piece of that pie.

“Every day, every week that goes by the networks are losing more audience to cable. They’re trying to hold on to their market share,” said Alan Berger, International Creative Management executive vice president, whose agency was involved in recent series agreements for Metcalf, Selleck, Arsenio Hall and Spike Lee.

“While the networks are still flush with cash, they’re trying to get as many star players as they can. It’s a hit-driven mentality. . . . They’re trying to ‘open’ the show, in the same way you have to open a movie or it’s out of theaters.”

Development involves a winnowing process. Industry sources estimate that 600 scripts for possible series were developed last year, with the networks ordering roughly 150 pilots and scheduling 39 new programs in the fall.

The idea is for networks to bring projects along gradually, beginning with a script and producer that are then wedded to a star or stars before a pilot episode is produced. Based on that prototype, the network decides whether to order a series.

Under the current system, talent armed with the prospect of huge penalty fees if their projects aren’t ordered can bypass several stages of the process and improve considerably on the long odds. Insiders thus fret that networks will schedule shows based on financial obligations, reducing opportunities for new faces and original concepts.

“The mistake will be if it clogs the development passages and good ideas don’t come forward,” Littlefield said. “In the long term, I don’t know if the audience is going to get the best [shows] because of these deals.”

“They’re trying to cut out the development process,” said CBS Entertainment President Leslie Moonves, whose company helped raise the ante in terms of stars with huge agreements to land Cosby and Ted Danson.

Moonves has acknowledged that CBS felt compelled to prove its ability to attract top stars, saying of Danson and Cosby, “Without those deals on the table, I wouldn’t have gotten them.”

Thus far the star strategy has produced mixed results. “Cosby” and ABC’s “Spin City,” starring Michael J. Fox, opened big but have seen their ratings decline in subsequent weeks. “Ink” was hurt by premiering against a World Series game and looked disappointing in its second week.

After signing Cosby and Danson, CBS reduced by almost half the number of comedies in development, realizing that two slots for new series were filled. Similarly, sources say studios will be hard-pressed to sell new dramas at ABC and Fox based on the projects to which they’re already committed.

Although some executives point fingers at agents for making unreasonable demands, ABC’s Harbert said the networks have themselves to blame.

“You can’t sit there and say too much about the agents and studios for asking, because we can say ‘no,’ and sometimes we do say ‘no,’ ” he said.

Executives say all these expensive deals may take much suspense from the ritual of setting prime-time schedules next spring, when network honchos gather in New York and assemble their lineups before presenting them to advertisers.

Universal Television President Tom Thayer, whose company will produce “Timecop” and “Roar,” said sweating out that process in the past demonstrated to him the value of securing such commitments.

“I just got tired of going to New York in May and sitting around on my hands waiting for the phone to ring,” he said.