‘Seinfeld’s’ Departure Gives ‘ER’ More Clout

Despite reports to the contrary, Fox Television denies that its president sent Jerry Seinfeld a thank-you note after the comic announced plans to end his dominant NBC sitcom this season.

Yet even if NBC’s competitors didn’t officially thank him for that Christmas gift, flowers could just as easily have come from fellow NBC series “ER”--or rather the studio behind the show, Warner Bros. Television.

“Seinfeld’s” leave-taking will focus the spotlight on NBC’s efforts to renew “ER,” which, after an exclusive monthlong negotiating period that begins in February, would be free to entertain offers from other networks.

While NBC was already motivated to retain prime-time’s top-rated series, industry sources say that with “Seinfeld” out of the picture, securing rights to “ER” becomes even more vital if the No. 1 network wants to maintain that status--potentially adding to the amount Warner Bros. will be able to negotiate.

In addition, NBC also may have to fret about what it will take to convince “Mad About You’s” Paul Reiser and Helen Hunt to return for a seventh season. Neither has decided yet whether to do another year of the series, and Hunt--a possible Oscar nominee this year for the romantic comedy “As Good as It Gets”--has a budding movie career she could opt to pursue unless NBC, as one source put it, “backs up the [money] truck.”

Under a best-case scenario, NBC keeps both shows but still shells out an unprecedented amount of cash. Published reports have indicated Warner Bros. might seek $10 million per episode of “ER,” compared to the estimated $1.5 million the company currently receives. Some have suggested an inflated sum was planted by rivals to ratchet up pressure on NBC, but sources say the studio’s asking price could actually be even higher.

“You don’t have to be a genius to figure out that [Seinfeld] gives them more leverage, because NBC needs the show more,” said an executive at another studio. “On the other hand, NBC has a certain amount of leverage. . . . The dynamics work both ways.”

Indeed, the negotiations are more complicated than just the money at stake, due to the labyrinthine workings of network television.

In the way that the business operates, “ER” provides Warner Bros. clout in extracting possible concessions from NBC regarding the ordering and scheduling of other programs. The studio already produces “Friends,” “Veronica’s Closet” and “Suddenly Susan” for the network, plus at least two projects planned for next season: another comedy from the trio behind “Friends” and a new drama from “ER” executive producer John Wells.

On the flip side, however, sources agree that Warner Bros. can’t become too greedy precisely because the studio has so many other potentially fragile projects in play at NBC, which holds the ultimate power over if and where those programs get scheduled.

“You expect some horse-trading,” said one source near the discussions, which, to the surprise of some industry observers, NBC has yet to initiate.

For its part, NBC has stressed that the network won’t let itself be held hostage by program suppliers--a mistake officials made in the 1980s, when producers of “The Cosby Show” and “Cheers” bargained for such perks in their renewal talks. Even “Cheers” star Ted Danson received commitments to produce series, among them “Down Home,” a short-lived comedy starring Judith Ivey.

Both NBC and Warner Bros. declined comment, but given the importance of “ER” to NBC’s success and the network’s increased vulnerability due to losing “Seinfeld,” sources contend that the network already has become more yielding in its hard-line stance.

As proof, observers point to promises NBC made to the producers of “Friends” and “Frasier.” NBC is said to have assured each creative team a slot for their next shows on Tuesday or Thursday--its most coveted nights--and separately committed to 13 episodes of a new variety series featuring Paul Reubens, a.k.a. Pee-wee Herman, to land that project.

Despite its leverage, Warner Bros. still faces a delicate juggling act. Beyond serving its own interests, the studio must also make a good-faith effort to generate full-market value for its “ER” production partners, including novelist/series creator Michael Crichton and Steven Spielberg’s Amblin Television. Those entities share in the negotiated network licensing fee.

In addition, the actors will doubtless want to sweeten their deals--just as the “Friends” cast members launched their new-contract bid in 1996 after hearing about the $4 million an episode that show was expected to garner in syndication.

Whatever the final price, the buyer may have to accept “ER” as “a loss leader”--that is, a franchise, such as NFL football, that by itself costs too much to be profitable but helps a network in ways that extend beyond its time period.

In “ER’s” case, those ancillary benefits are substantial. Not only does the series contribute mightily to NBC’s prime-time dominance, but the show also boosts ratings for late local news after the program and “The Tonight Show With Jay Leno,” which generally does its biggest ratings of the week Thursdays.

For CBS, then, acquiring “ER” might not only alter the prime-time balance of power but also rattle late night, where David Letterman’s program consistently trails Leno.

Historically, because change entails risk, hit series seldom if ever jump networks, though that hasn’t prevented attempts to nab them. Most recently, ABC inquired about acquiring “Frasier,” which NBC retained at a substantial raise for its production company, Paramount Network Television.

Few believe, in part due to the ripple effect it would have on the television business, that NBC will lose “ER.” Though the series is owned by Time Warner--whose co-chairman, Ted Turner, made a bid last year to bring “Seinfeld” to his cable networks--insiders believe cooler heads will prevail.

The question now is to find a resolution that can satisfy all the interested parties--without establishing a precedent that will upset the entire economic structure of network television.

According to PaineWebber Inc. analyst Christopher Dixon, the enormous figures being tossed around might even require crafting a deal that incorporates revenue-sharing (in which the studio would receive a portion of NBC’s advertising) or creates some other new financial model.

“In television today, the cost of programming is getting to the point where it’s almost prohibitive,” he said. “It’s fair to say that the ‘ER’ negotiations will have a significant impact on the network television business going forward.”

NBC officials previously said in regard to “Seinfeld” that the network is willing to pay the going rate for success. With “ER,” they will have an opportunity to display that resolve.

“ ‘Seinfeld’ demonstrated the incredible amount of money at stake,” one veteran television executive said, due to the scarcity of hits as more channels nibble away at the TV viewing pie. As for the negotiations, he added, “There’s going to be a lot of rich people coming out of this.”