Network Bidding War Looms for ‘Frasier’

NBC, still seeking to close deals with the “Seinfeld” cast for next year, now finds itself in the midst of another high-stakes negotiation: to renew the Emmy-winning comedy “Frasier.”

Sources say NBC and production company Paramount Television failed to come to terms on an agreement this week, ending an exclusive negotiating period and freeing the studio to entertain offers from other networks. ABC and CBS are “salivating,” as one source put it, about the opportunity to acquire the series.

“They’ve asked for a lot of money and NBC has balked,” said one network executive.

Several factors make it unlikely that Paramount will take the show away from the top-rated network, but third-party bidding would drive up NBC’s price. Paramount is said to be asking for more than $3 million per episode, or $75 million for a full season.

The potential bidding war illustrates one reason the network television business is so cyclical: Hit shows age and cost more to license even as their ratings tend to gradually decline.

Even in a best-case scenario, the “Seinfeld” and “Frasier” negotiations promise to drive up NBC’s programming costs, while competitors have more leeway pursuing new shows. A similar fate has befallen prime-time leaders in the past--including NBC in the late 1980s, when producers of “The Cosby Show” and “Cheers” won scheduling concessions from the network.

When those shows went off the air, NBC quickly slid into third place, climbing back to the top thanks to “Seinfeld” and the explosive success of “ER” and “Friends.” NBC executives remember that decline and are determined to resist being manipulated by suppliers.

But facing dwindling audience levels, networks have become increasingly desperate to find such hits and more willing to try to appropriate them from competitors.

CBS recently stole the 8-year-old sitcom “Family Matters” from ABC for next year, under a deal estimated to be worth $1.7 million for each of 25 new episodes. That decision was said to have outraged ABC, which threatened to retaliate by refusing to buy future shows from the production company, Warner Bros. Television.

With its prime-time ratings slumping, ABC in particular is said to be keenly interested in “Frasier,” which has carved into viewing of its top-rated comedy, “Home Improvement.” ABC could schedule both shows Tuesdays and again become a dominant force that night.

There is a complicating factor should ABC bid on “Frasier,” since the network is still involved in renewal negotiations on “Home Improvement.” The producers of that show have sued Disney, alleging they aren’t receiving fair-market value because the studio owns both the network and the production company.

Paying a high price for “Frasier” might provide ammunition in that lawsuit. “Home Improvement” regularly beats “Frasier” in the ratings, with roughly 22.5 million people watching each Tuesday, compared with an average 17 million viewing the NBC show in the same half-hour. Both remain extremely popular, ranking among prime time’s top 20 programs.

Sources say “Frasier” star Kelsey Grammer has agreed in principle to star in the series three more years. The program will begin its fifth season in September.

Though ABC or CBS could offer a higher price, there is risk associated with changing networks. In most instances, ratings for established series drop when such a shift is made, and Paramount doesn’t want to damage the show’s popularity.

NBC can also bring leverage to bear on other fronts. Next month the network premieres a series from Paramount and Grammer’s company (“Fired Up,” starring Sharon Lawrence of “NYPD Blue”) in the half-hour between “Seinfeld” and “ER”--the most coveted real estate in prime time. The desire to retain a plum time period would offer a strong inducement not to upset NBC.

Rancorous negotiations could also affect several projects Paramount has in development at NBC, including a sitcom for next season starring MTV hostess Jenny McCarthy and a “Nightline” spoof from “Saturday Night Live’s” Al Franken.

Both NBC and Paramount declined to comment.