Program Suppliers Pulling the Plug on Low-Rated Longshots

Five years ago, Lucie Salhany--then-chairwoman of 20th Century Fox’s TV production unit--stunned the industry by canceling the studio’s ABC series “Anything but Love.” Today that decision is beginning to look prescient.

Recognizing harsh economic realities of the TV marketplace, production companies that once battled to keep shows alive are exhibiting a new readiness to cut losses and pull the plug if a series is perceived to have little chance of ever recovering its investment.

Warner Bros., for years the leading volume supplier of prime-time TV shows, only recently decided not to continue the Fox comedy series “Party Girl” (pulled in late September because of low ratings) because the network wouldn’t commit to a better time period when the show returned. The studio also didn’t put up a fight regarding CBS’ decision to divorce its lineup of “Mr. & Mrs. Smith,” an action show starring “Quantum Leap’s” Scott Bakula.

Other program suppliers have become equally pragmatic. Universal Television halted production on its CBS drama series “EZ Streets,” waiting to see how the show--yanked after two telecasts--performs in its second go-round before agreeing to produce more. Witt-Thomas Productions also allowed “Common Law” to expire when ABC indicated the sitcom probably didn’t figure in its long-term plans.

Studios traditionally fought to keep even low-rated programs on the air, hoping a property would take off and be the next “Seinfeld” or “Mad About You”--shows that started slowly and eventually became huge hits, garnering more than $200 million when reruns were sold to TV stations. Of course, agents, actors and writers also want series to survive so they can keep drawing paychecks.

“You have to make tough decisions nowadays,” said Witt-Thomas partner Tony Thomas. “The deficits are so high, it’s just not financially responsible to keep making a show if the network says, ‘We don’t have faith in you.’ . . . When you’re going to spend $300,000 a week in deficits and there’s no future, you have to move on.”

Certain factions within the industry were aghast in 1991 when Salhany, as newly appointed chairwoman at Fox, killed “Anything but Love.” The network wanted more episodes, but Salhany reasoned that production deficits didn’t justify further expense in light of the show’s marginal prospects in syndication.

Currently president of the UPN network, Salhany remembers the reaction but doesn’t regret the decision.

“When I joined Fox, I could see what was going to happen in the future because I spent so much time in the syndication business and at stations,” she said. “[The economics] just didn’t work, and no one wanted to recognize it.”

With the syndication market soft for all but prime time’s biggest hits, and network ratings steadily declining overall, studios find themselves trying to determine whether they’re banging into a brick wall trying to prolong low-rated longshots.

The television business has long been built on the rare success that pays for many failures. Disney, for example, sank millions into TV for years before hitting a home run with “Home Improvement,” which has grossed more than $500 million in syndication.

But hits have become more difficult to generate, and the losses more staggering. Deficits can run well into six figures on hourlong programs--”EZ Streets” reportedly cost the studio more than $1.6 million per episode to produce. The network license fee paid to suppliers generally runs from $900,000 to $1 million on new one-hour shows, with the difference to be recouped from domestic and overseas sales.

Dramas at least have potential overseas, especially action shows that transcend language. By contrast, comedy shows must reach the critical mass of 100 episodes for syndication, and failed shows that go only six or 13 episodes have virtually no rerun value and leave the production company saddled with millions of dollars in debt.

“What is Sony going to do with 44 episodes of ‘Ned & Stacey’?” asked one TV agent, referring to the second-year Fox series.

Production companies nevertheless face pressure to keep shows alive. Entertainment attorney Bob Myman, who along with client John Ritter produced “Anything but Love,” noted that studios have a duty to protect their partners’ interests.

“From a producer, writer or actor’s point of view, they’re your creative and business partner. Their job is to loan you money to make the shows and fight like hell to keep you on the air,” he said.

For that reason, Myman indicated that studios that cut and run on marginal projects could be penny-wise and pound-foolish, scaring off talent that might supply them with future hits.

“If that attitude is out there, you’ll have a lot of trouble making deals with top writers and producers,” he said. “All things being equal, you’d rather make a deal with someone who has a reputation for fighting to keep your show on the air.”

Warner Bros. Television President Tony Jonas also stressed that studios must work in concert with producers, basing their actions on creative elements and not just financial concerns.

“We can never make those kind of decisions unilaterally,” he said. “We’re in the business of backing the passions of our producers as best we can.”

With several networks owned by major studios, broadcasters also seem more aware of bottom-line issues. Networks sometimes inform suppliers that a show is in trouble even if they aren’t ready to cancel it yet, or advise them to try to reduce overhead on a program with dubious prospects.

“I’m very sensitive to their deficits,” Salhany said. “It used to be ‘That’s your problem.’ It’s our problem too.”

Studio executives can have personal incentives to keep series alive, since their bonuses are often linked to the number of programs they sell and get renewed--a gauge some insiders view as outdated in measuring profitability.

A less questionable motivation stems from uncertainty regarding what will break out and the pot of gold that awaits a bona fide success.

“We don’t want to be so pretentious [as to say] that we know every show that’s going to hit,” Jonas said, citing ABC’s “The Drew Carey Show,” which has blossomed in its sophomore year after an inauspicious start.

Even so, the consensus is that suppliers can no longer afford to keep shows on the air for vanity’s sake or to outshine competitors when scorecards of studio production are assembled each spring. “Everybody has become more conscious” of the bottom line, Thomas said. “The volume business doesn’t make sense in television anymore.”