Underscoring the complications created by Hollywood mergers, ABC is in negotiations with its parent, Walt Disney Co., to renew its hit comedy series "Home Improvement" for two more seasons.
The process--said to have raised the hackles of the show's producers and star--highlights the difficult issue for program creators when a studio partner shares corporate heritage with the network on which the program airs.
The negotiations are the first major test of its kind since Disney acquired ABC. Network executives have maintained that they negotiate with Disney just as with any other supplier, but there's considerable skepticism in Hollywood that the two parties can put aside the fact that both ultimately report to Disney Chairman Michael Eisner.
Yet the studio is obligated to seek the highest price in negotiations on behalf of the producers and others who share in profits from the program.
Sources say the sides are talking about a two-year renewal of "Home Improvement," which is in its sixth season and remains ABC's highest-rated program. A network spokeswoman would acknowledge only that talks have begun about extending the series.
At this point in the show's run, Disney is free to entertain offers from other networks. On the open market, the sitcom could generate a license fee (the amount networks pay suppliers to produce the show) estimated at more than $3.5 million per episode--an annual commitment approaching $90 million, based on 25 original episodes per year.
However, there appears to be little threat of Disney's moving the series to another network as the studio struggles to revive ABC, which has seen its ratings dip sharply during the last year.
Such relationships cause producers to wonder whether they are getting fair-market value on properties despite a studio's duty to the series' creators.
"Can Disney negotiate with ABC the same way Carsey-Werner can?" one TV producer asked, speaking on condition of anonymity.
Wind Dancer Production Group, Disney's partner in producing "Home Improvement," is said to be after a figure comparable to ABC's renewal deal on "Roseanne," which Carsey-Werner produces.
"Roseanne" is coming to the end of a three-year deal that originally called for payments averaging about $3.2 million per episode (though third-year fees were revised down when ratings began to sag). Carsey-Werner was also able to extract large sums from NBC on "The Cosby Show," as did Paramount in its hardball dealings related to "Cheers."
Network executives say being "held up" in such past negotiations taught the networks the value of supplying their own hits.
The question is where that leaves producers and stars, who fear they may not get the same deal they would if the seller and buyer weren't affiliated. "This could hurt ABC [in dealings with talent] in the long run," said one source in the production community.
ABC is hardly alone. Fox produces "The X-Files" and "The Simpsons," two of the Fox network's top-rated programs. Some of CBS' most popular series--including "Touched by an Angel" and "Walker, Texas Ranger"--are made through the network, NBC has become more aggressive regarding production, and the WB and UPN networks are owned entirely and in part, respectively, by Warner Bros. and Paramount.
The "Home Improvement" cast is said to have tentatively agreed to deals through an eighth season with the notable exception of star Tim Allen. A spokeswoman for Allen declined to comment, as did representatives for Wind Dancer and Disney.
Though studios have the right to shop a series after its fourth or fifth season, it's exceedingly rare for a network to let a prime-time hit shift to a competitor. In fact, NBC is said to have expressed reservations about doing business with Disney, seeking assurances that the studio wouldn't move successful shows to ABC.