There are some surprise factors in the ‘Friends’ equation

Today’s adventure in Advanced TV Economics explores how the key players in deciding whether “Friends” returns for another year aren’t just Jennifer Aniston or David Schwimmer but ... some guys you’ve never heard of at the Tribune Co.?

Those who skipped the introductory class needn’t worry, because this course perplexes even TV industry officials. At its core, however, is a simple (if confounding) dilemma -- namely, how television can afford to produce shows for which there is a public demand but no clear financial model to support them.

Such is the case with “Friends” -- in its ninth season, still TV’s most-watched comedy. Yet because rerun rights play such a vital role in underwriting the franchise, Tribune -- also owner of the Los Angeles Times -- could handcuff NBC, producer Warner Bros. Television and the show’s handsomely paid stars in any attempt to extend the series.

This odd scenario, by the way, also clouds the future of other popular programs, with “Friends” merely representing one prominent example of how forces beyond ratings dictate what endures on the networks.

Because the studios that make the shows primarily glean their profits from after-network rerun airings, known in the industry as the “back end,” several programs that have loyal followings might not endure beyond this year. CBS’ Ted Danson sitcom “Becker” faces such a predicament because of the marginal appetite among TV stations for its reruns, and “JAG” -- a military drama ostensibly flying high, averaging more than 15 million viewers -- is also in peril.

Nothing makes the point, however, more starkly than “Friends.” Under a deal reached in February, NBC pays Warner Bros. nearly $7 million an episode for the show through spring. NBC doesn’t make much off the show at that price, but the program’s ancillary benefits, such as helping promote other series, remain considerable.

Warner Bros. then pays each of the six stars $1 million per show and probably spends a few million more to pay the writers and producers, as well as to actually make the show, putting the cost above $7 million. The studio nevertheless makes a tidy profit because on top of NBC’s fee, the repeats have been sold to TV stations for a sum totaling about $4 million per episode.

Much of that cash comes from Tribune, one of the country’s largest broadcast operators, which carries “Friends” reruns in more than half of the two dozen cities where it owns TV stations -- among them New York, Los Angeles and Chicago, which jointly account for 15% of U.S. homes.

Tribune’s agreement runs until 2011, but the company has committed to acquire only new episodes produced through this season. And with more than 200 installments already in the can -- far more than the usual total required for syndication -- the company is said to have little interest in anteing up for more.

A Tribune spokesman declined to comment on the company’s plans, citing a desire to stay out of any “Friends” negotiations involving NBC, Warner Bros. and the performers.

Nice try, but it’s impossible to divorce the show’s back end from the question of whether this will be the end, even before determining if the cast can be brought on board.

Simply put, should Tribune’s contribution disappear, the “Friends” follies become considerably thornier. Fearing the toll its absence would exact on “Must-See TV,” NBC wants the show but doesn’t relish the idea of covering the lost syndication income, which could add $3 million to its per-episode investment.

Warner Bros., meanwhile, has little incentive to continue the series without being assured a profit, which it won’t be, barring a huge increase from NBC or the stars (who might be unwilling to return under the best of circumstances) accepting a salary cut.

In short, companies that control large groups of TV stations -- particularly Tribune and Fox, which air sitcom repeats on stations like KTLA and KTTV, respectively, before and after prime time -- can make or break even hit shows. “Those companies wield tremendous power in the television business,” said an executive at a competing studio. “They’re the gatekeepers.”

“JAG,” moreover, is in the same leaky boat. Although its reruns do well enough on the USA network, that channel isn’t obligated to buy additional episodes, leaving CBS and sister Viacom unit Paramount wrestling with how to foot the bill for another year, despite the show’s popularity.

NBC and Warner Bros. have yet to initiate serious talks about “Friends” and are promoting this season as its finale, but they haven’t closed the door entirely. Still, any hope of seeing new episodes in 2004 hinges at least in part on Tribune wanting more fresh installments to run, and rerun, into the next decade.

Admittedly, you can make a case that the show has exhausted every conceivable variation on putting Ross and Rachel together and pulling them apart and that hanging on would be about commerce, not creativity. From sitcoms to athletes, there is a certain nobility, to be sure, in leaving near the top of one’s game.

That said, when millions of people dutifully show up every week, as they do for “Friends,” programmers rightfully swallow hard at the prospect of cutting them loose. From that perspective, the TV industry does itself and its customers a disservice if arcane bean-counting considerations alone extinguish the brightest lights -- in essence, yanking a product off the shelves that the public still demonstrably wants.

Not that I blame Tribune for wanting to judiciously allocate its resources. In fact, if the company must choose between buying episodes of “Friends” and sharing extra cash with its hard-working employees, I, for one, think the world can muddle through watching “Scrubs.”

*

Brian Lowry’s column appears Wednesdays. He can be reached at brian.lowry@latimes.com.