HBO to Produce New Programs for ABC

Walt Disney Co.’s struggling ABC TV network announced Monday that cable giant HBO would develop new shows for ABC over the next two years.

ABC will finance shows created by HBO Independent Productions and will have the first chance to air any of the programs. If the network takes a pass on a show, HBO can shop it to competing networks. ABC will not get the rights to any of HBO’s original hit series, however, such as “The Sopranos” and “Sex and the City.” HBO is a unit of media rival AOL Time Warner Inc.

The ABC-Home Box Office partnership represents a dramatic shift in Disney’s strategy. In recent years, ABC has depended almost entirely on its in-house studio, Touchstone Television, to churn out the bulk of the network’s prime-time lineup.

But ABC saw its prime-time ratings plummet 20% last year to third place overall.

This fall, six out of seven new shows on ABC will be Touchstone productions.

“ABC became too inbred, and they had to go outside” of the Disney studio, said Jon Mandel, co-chief executive of Mediacom Inc., which helps companies buy TV advertising. “HBO has quite a good reputation, so [the agreement] makes sense.”

ABC executives concede they need a better mix of programming.

“It’s virtually impossible for one studio to program one whole network,” said Lloyd Braun, chairman of ABC Entertainment Television Group. “We don’t want to limit ourselves.”

Although HBO produces a limited number of original shows, it led all networks this year in Emmy nominations with its drama “Six Feet Under.”

ABC is not expecting Sopranos-style shows; instead it hopes the deal will generate one or two programs, such as CBS’ hit comedy “Everybody Loves Raymond,” which is co-produced by HBO.

“There might be a show, on first blush that looks like an HBO show, but on a second glance could be right for us,” Braun said. “The lines are getting more and more blurred on what’s right for cable and what’s right for broadcast television. And HBO has shown that they can do both.”

Braun said the earliest that an HBO-produced show will appear on ABC will be fall 2003.

Braun said ABC’s challenge to rebuild the network has actually turned into a positive in attracting suppliers such as HBO.

“Studios believe that there’s opportunities here,” Braun said. “There’s room on our schedule.”

He said that ABC will make deals for shows with other independent production companies such as Carsey-Werner-Mandabach (“That ‘70s Show”).

Braun said the deal will be good for ABC because HBO has established relationships with marquee talent--producers, writers and actors.

“We’re not trying to put HBO programming on ABC,” said Russell Schwartz, executive vice president for HBO Independent Productions. “This is not about us just taking stuff that doesn’t work on HBO and sticking it on ABC. This is about developing programs for ABC.”

He added that his three-person team isn’t planning to churn out a bunch of shows. “We’ve never been about producing a schedule of 12 shows. We build them one at a time,” Schwartz said.

The ABC deal marks a renewed emphasis on broadcast TV for HBO Independent Productions, which currently only has “Raymond” on the air. A decade ago, the HBO unit was busy making shows such as “Martin” for Fox Broadcasting Co. and “Roc.” But by the mid-to-late 1990s, the studio had been priced out of a market that awarded multimillion-dollar development deals to second- and third-tier writers.

But the economics of television have shifted. Studios and networks phased out many of those big development deals, and they are showing more willingness to make deals with suppliers who are outside the company.

ABC has been the most reliant on in-house product of the major broadcast networks, said David W. Miller, a media analyst in Los Angeles with the investment banking firm Sanders Morris Harris.

“If you look at Fox, CBS or NBC, there’s a little more balance in shows that were developed in-house and those developed by outside suppliers,” Miller said. “Disney’s strategy has been to produce its own shows and own all of the economics of the shows. That’s great if all of the shows are hits, but sometimes you want to hedge your bets.”

Under the deal, ABC will pay HBO an undisclosed amount for a development fund for new programs. In addition, HBO could request joint ownership in a project, but ABC executives could veto that request. ABC and HBO executives met for the first time to discuss the partnership on July 15.

“It happened very quickly,” Schwartz said. “This seemed like a good fit, it seemed natural and right for us to work with ABC.”

*

Times wire services were used in compiling this report.