Seeing Stars, Cutting Jobs

In addition to barbecues and beach parties, many employees of the major television networks doubtless spent Labor Day wondering whether they will still have jobs come Thanksgiving.

Reacting to declining ratings, rising programming costs and flat advertising revenue, all the networks are pursuing what's euphemistically known as "belt tightening"--a term that usually implies shedding workers as opposed to pounds.

Certain NBC staffers have received memos asking them to describe and justify their positions, presumably in advance of potential layoffs. ABC has gradually sought to reduce staff and slash overhead.

CBS recently told financial analysts of plans to implement a major cost-cutting initiative. Without specifying how many positions will be eliminated, CBS Corp. President Mel Karmazin said that $70 million was being set aside to cover severance packages. Such announcements traditionally play well in those circles, and CBS' stock price benefited accordingly.

Some observers have attributed these reductions to huge programming commitments made in the last year, among them CBS' $4-billion deal to televise National Football League games, NBC's $850-million health-care bill to keep "ER" three more seasons and the more than $32 million that "Home Improvement" star Tim Allen will receive for what's expected to be that ABC comedy's final season.

Focusing on those agreements, however, overlooks the importance of such programming to the networks' survival. It also doesn't address less-justifiable expenditures in which networks indulge while firing low-paid assistants or cutting back on messenger deliveries seeking to offset disappointing earnings reports.

Football and "ER" have at least demonstrated their ability to deliver ratings. What should most aggravate those who fear losing their jobs, rather, is the money that networks and studios squander on unproductive deals--investing millions on programs that never air or engaging in expensive bidding wars to secure the services of writers who worked on popular series but haven't created one.

Driven by ego or fear of losing out to competitors, executives fall victim to feeding frenzies over writers or actors who become the "must get" star of the moment, despite the fact that such acquisitions rarely yield dividends over the long haul.

The Hollywood trade papers regularly trumpet the astounding figures commanded by such talent, such as CBS' $15-million agreement for future series from the creator of "The Single Guy" or the DreamWorks studio committing slightly more to a writer whose credits include working on "The Cable Guy" (Jim Carrey's lone box-office flop) and "The Ben Stiller Show," a series Fox pulled after eight telecasts.

Granted, the latter fellow worked on "The Larry Sanders Show" as well but, based on the number of writers who came and went on that series, one might conclude that its co-creator, producer and star, Garry Shandling, was the key ingredient in its creative artistry. In the thrill of the hunt, TV executives can forget to engage in such calculations, clamoring to land hot writing prospects from "Friends" or "Frasier" without discerning until too late where their contributions begin and end.

Beyond what's spent on those deals, each year several projects announced with great fanfare never get off the ground. Every network can tell stories of ordering shows and then burying them in the summer, while Fox has twice produced multiple episodes of series before deciding against broadcasting them at all.

In extending sight-unseen commitments to talent, networks also agree to what are known as "penalty payments"--requiring them, in essence, to pay those involved for not putting their shows on the air.

Compared to that kind of largess, the high fees doled out to established programs and stars don't look quite so bad, offering an almost certain return on the investment. Allen and "Frasier's" Kelsey Grammer make a lot of money, yes, but in those vehicles they happen to attract viewers, in the same way Shaquille O'Neal and Mark McGwire fill arena and stadium seats.

Western International Media Chairman Dennis Holt, who oversees the nation's largest media-buying firm, summed up the necessity of retaining such marquee players when NBC renewed "ER." "It was cheap at any price," he said. "If you had to have brain surgery, you wouldn't negotiate the fee."


The same can hardly be said of shelling out big bucks for the privilege of producing a new series pilot with someone who hasn't created one before or, having already made millions, has little desire to do so again. The savviest executives recognize this, but that didn't prevent many from tripping over themselves to sign members of "Seinfeld's" writing staff to exclusive contracts, praying that the show's success will somehow rub off.

Of course, developing TV programs can't be an exact science. After creating the marginally popular HBO series "Dream On," producers Marta Kauffman and David Crane dreamed up "Family Album," a CBS series that came and went without notice. Their next show, NBC's "Friends," became the sort of hit that practically obliterates the memory of failure.

Agents play on insecurity about passing on the next breakout hit to drive up talent salaries, but to paraphrase a veteran publicist, blaming agents for demanding outrageous sums is akin to criticizing farmers for using fertilizer. Earning clients the most they can is, after all, what agents do.

What networks and studios must do is take stock of their own business practices and where they place their bets. Laying off middle-level managers always impresses Wall Street, but saying "No" when asked to commit millions on a writer with some noteworthy credits--but perhaps not the requisite chops to create another "Friends"--requires considerably more backbone.

A few TV officials have said they're doing precisely that, although the process isn't without risk or consequences. No one is immune from guessing wrong, and the hunger for hits often leaves executives most regretting the deals they didn't make.

Because of that dynamic, those desperate to succeed will surely continue to chase talent with near-drunken abandon, even as CBS' Karmazin begins sawing away at the network's "dead wood" as if the company were a massive old oak. Yet wouldn't it be refreshing, just once, if a guy like that started by taking a look at the branch he's sitting on?

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