Not as Simple as A-B-C

The Fox network airs “The X-Files” and “The Simpsons.” In addition, the studio’s 20th Century Fox Television produces both shows, so Fox cashes in not only selling the reruns (conveniently shown on Fox’s TV stations and its FX cable channel) but on every “The truth is out there” T-shirt and “Ay caramba!” lunch box sold.

This is known as vertical integration--shorthand for corporate synergy slicing across a media giant’s various divisions in a way that’s simple, logical and highly lucrative. It’s an equation to which every network aspires, but this particular math has also prompted speculation that the TV business is putting commerce ahead of creativity--with networks ordering programs because they stand to benefit financially as the producer, not buying the best ideas.

The Walt Disney Co., which owns ABC, recently ratcheted up the stakes in this game by merging the network with its TV production unit. The decision has left other production companies worrying that ABC will freeze them out, stocking its schedule with Disney-produced programs. At the same time, some rival networks suddenly perceive Disney--which previously supplied shows to everyone--as an exclusive provider to ABC.

As one executive at a competing network put it, the move “has managed to make no one happy,” creating confusion internally as to who at ABC is responsible for what. CBS Television President Leslie Moonves called the arrangement “a shotgun marriage,” saying, “If any [other] network expects to get a show from that company, they’re out of their minds.” NBC Entertainment President Garth Ancier said there is “no question” ABC will have first crack at producers under contract to Disney.

If other networks think Disney will only offer them castoffs that ABC doesn’t want, some writers and their agents fear their Disney-backed projects that don’t fit on ABC will be left in the cold.

“Not all of the talent that Disney has made deals with are right for ABC, and they know that,” said Jay Sures, co-head of the television department at United Talent Agency.

ABC officials have stressed Disney has no intention of producing all its shows, saying that beyond cutting costs from overlapping areas, the new structure allows them to streamline and focus the process by which programs are created.

“The development that will be done will be strategically pinpointed to what the network’s needs are, rather than the guessing game that all studios go through sort of figuring out what the networks really want,” ABC Television Group Co-Chairman Lloyd Braun said last week.

Even so, other studios clearly appear at a disadvantage. And while all networks have gradually moved in this direction, Disney’s presence is more overt as the entertainment industry’s most recognizable brand name. Since buying ABC, Disney has revived “The Wonderful World of Disney” and taken over the network’s children’s lineup, including a block dubbed “Disney’s One Saturday Morning.”

Disney’s latest action follows a lengthy period in which “synergy” has seldom worked as planned. Networks aligned with studios--including Fox, UPN and the WB (which are half-owned by Paramount and Warner Bros., respectively)--have often feuded with their sister companies, turning to others for programming.

Walt Disney Co. Chairman Michael Eisner consolidated Disney and ABC after the network placed just one new Disney-produced series, “Once and Again,” on its upcoming lineup. (A second show, “Wasteland,” comes from Miramax, a Disney subsidiary.)

In similar fashion, management at Warner Bros. Television was replaced this year, due largely to strained relations between the studio and the WB, and friction has long existed--spanning several executive regimes--between Fox’s network and studio, which also produces such shows as ABC’s “Dharma & Greg” and WB’s “Buffy the Vampire Slayer.” This spring, the studio sold a promising new teen drama developed for Fox, “Roswell,” to the WB when the network didn’t immediately agree to premiere the show in the fall.

Though synergy hasn’t always gone smoothly, NBC’s Ancier thinks concentration of the industry into a handful of huge companies has broken down some of the resistance creative talent had to, in essence, limiting their options selling a show to a single buyer. That said, he added, “This ABC merger is a sort of sea change.”

This wasn’t an issue for more than two decades, thanks to Federal Communications Commission rules that strictly limited networks’ ability to own the programs they air. The elimination of those guidelines in the early 1990s paved the way for the launch of new studio-backed networks and a wave of mergers, including Disney’s purchase of ABC.

Despite the assumption that networks favor self-supplied programs, it can become a double-edged sword. A case in point is the critically acclaimed drama “Homicide: Life on the Street,” which NBC canceled because continuing the show--never a major ratings hit--didn’t make financial sense for NBC as its producer.

Because “Homicide” didn’t pull in enough money from syndication to offset rising production costs (the reruns air on Court TV), NBC officials didn’t see the benefit in shooting new episodes; instead, they filled that time slot with a less expensive new NBC Studios property, “Cold Feet.”

“In previous years [being owned by NBC] did work for us,” said “Homicide” executive producer Tom Fontana. “It was one of various elements that made them want to pick up the show. . . . It works for you when it’s an NBC Studios show [versus] another studio. It doesn’t work for you when it’s two NBC Studios shows.”

Former NBC West Coast President Don Ohlmeyer--a self-described fan of the series--has acknowledged that owning “Homicide” provided extra ammunition each year in lobbying for its renewal.

“It always helps to have some justification,” Ohlmeyer said. “Had we not had the success that we had [overall], it would have been difficult. I loved ‘Homicide’ . . . [and] one of the great things when you go from third to first [in the ratings] is that you don’t have to justify too much.”

Most industry sources agree that Disney’s reorganization points where the TV business is inexorably heading, as each network takes steps to exercise greater control--and wring more profit--from programs they air. CBS already has a stake in every series premiering on the network this fall, and NBC, after years of misfires, finally came up with two in-house hits last season that could pay off in syndication: “Providence” and “Will & Grace.”

The fear remains that networks will chase viewers away if they put on shows based on corporate interests as opposed to public tastes. Yet for all the rumblings about networks balking at doing business with Disney, there are those who insist programmers can’t risk turning down a potential hit, regardless of the source.

“If Disney has a project with a quality writer, with a quality piece of a talent, with a quality idea,” said UTA’s Sures, “they’re going to be able to sell that to another network.”