Miramax Joins the Osbournes

The stars of MTV’s raucous hit television series “The Osbournes” have landed another big payday--this time from Miramax Films for the DVD/videocassette release of the show.

With multimillion-dollar agreements for new episodes of the show, a lucrative book deal and now a rich DVD deal, the Osbournes have parlayed their profanity-laced lives into a cottage industry worth an estimated $30 million.

Rocker Ozzy Osbourne and his wife and manager Sharon Osbourne on Friday closed a DVD/video agreement worth roughly $7 million with Miramax, the company behind such films as the upcoming “Gangs of New York” and this year’s Oscar contender, “In the Bedroom.”

The new deal covers the first and second seasons of the show. Miramax, which is owned by the Walt Disney Co., will market both censored and uncensored versions of both seasons produced by MTV. The series, which follows the Osbournes and two of their three children day to day in their Beverly Hills home, is thick with profanity and frank discussions about everything from drugs to gynecological exams.

“The Osbournes” emerged as the highest-rated cable series in MTV’s 20-year history, averaging 5.3 million viewers during the first season and peaking at more than 7.2 million viewers for the season finale, based on Nielsen Media Research data.

The deal represents a shrewd move by the Osbournes and their agents. Early in their negotiations, the Osbournes switched representatives from Creative Artists Agency to Endeavor, which renegotiated the entire deal to give the family more control.

In May, they closed a multimillion-dollar deal with MTV for 20 more episodes of the show, which gave the clan ownership of the series and control over ancillary rights such as syndication, licensing and merchandising and the DVD/videocassette releases.

At the time of the original first-season deal, no DVD/videocassette or syndication rights had been negotiated since no one had any idea the show would become such a phenomenon, according to people knowledgeable about that deal. The Osbournes received $100,000 per episode in the first season. Endeavor was able to raise the second-season fee to between $400,000 and $500,000 per episode.

MTV, which under normal circumstances would have controlled home video rights for one of its series, is a profit participant in the video deal.

However, both MTV and Miramax are facing a delicate problem in marketing “The Osbournes” as one of its stars, Sharon Osbourne, battles cancer.

The family has said they will forge ahead with a new season for MTV despite the revelation that her cancer was worse than they previously thought. Sharon Osbourne told the press last week that although her surgery for colon cancer was a success, her doctors informed her earlier this month that the disease has spread to her lymph nodes. She also announced that the family would allow the MTV audience to watch her as she goes through radiation and chemotherapy.

The second season is scheduled to begin in November, and Miramax planned to release the first-season DVD in the fall to coincide with the campaign for the new season.

How the cancer treatment will play with audiences remains to be seen. Both MTV and Miramax are adept at marketing controversial fare and using controversy as a marketing tool, but a TV star in a life-and-death battle with cancer presents a unique and delicate situation.

Over the years, MTV has prided itself on pushing the envelope in airing controversial music videos such as Eminem’s “The Real Slim Shady” and Madonna’s “Like a Prayer” and shows such as “Jackass.” The network also dealt with one of the people on their series “Real World” living and dying with AIDS, and aired a special about the surgery Tom Green, star of another offbeat series, underwent for testicular cancer.

Miramax Films has deftly used (and sometimes even fueled) controversy to market such films as “Priest,” “The Crow,” “Kids” (which Miramax co-chairmen Bob and Harvey Weinstein distributed themselves through a company set up to handle just that movie), “Clerks,” and “Dogma” (which ended up being released through another distributor, Lions Gate).

Miramax closed the deal with the Osbournes despite the seriousness of Sharon Osbourne’s illness.

Harvey Weinstein noted that he sees “The Osbournes” as a possible franchise for Miramax, not unlike the company’s “Project Greenlight.” Weinstein pointed out that his relationship with Ozzy Osbourne dates to his days as a concert promoter, when he booked some of the rocker’s concerts.

Miramax spokesman Matthew Hiltzik said, “Obviously, audiences have embraced ‘The Osbournes’ not only for their unique brand of humor but for the multidimensional nature of their lives. While we can’t predict the future, we’re confident that these dedicated viewers will remain loyal to ‘The Osbournes’ during this challenging time.”

“Our first concern is for Sharon,” an MTV spokesperson said, “and we will deal with the [marketing] issue soon.”

Under terms of the deal, Miramax is paying $3 million for the first season.

The Osbournes will receive $2.8 million that will come out of an aggregate 30% royalty for the second season. They will also receive $1.25 million for their work putting together commentary and other promotional materials necessary for the DVDs. Miramax will shoulder the production, replication, distribution and marketing costs. The Osbournes’ new contract with MTV also gave them the right to assemble with outtakes additional episodes of the show to be sold into syndication, beginning in 2004.

Under terms of the MTV deal, the family will receive an estimated $10 million for the first 20 episodes. The agreement also includes a third season of 20 episodes for another $10 million, contingent upon whether the second season hits a certain ratings mark.

Whether a third season will be produced is at the discretion of the Osbournes, who have also entered into a two-book deal with MTV sister company Simon & Schuster. The first book, a paperback companion to the show, debuts in November at the beginning of the second season. A second book, in hardcover, will be published at a later date. The Osbournes received between $3 million and $4 million for the two books.

Another cable TV hit, “The Sopranos,” is one of HBO’s “strongest sellers” on DVD, but the premium network does not release figures.

Miramax’s deal for “The Osbournes” continues an industry trend that involves releasing TV shows on videocassette and DVD. Among network TV series successfully marketed in home video formats, the first season of “The Simpsons” has sold more than 1 million copies in DVD, according to a spokesperson for 20th Century Fox Home Entertainment. DVD sales have exploded since the format was introduced in 1997 and accounted for $4.6 billion in sales last year, according to DVD Entertainment Group, a consortium of the major studios and distributors.

Approximately 30 million U.S. households currently have DVD players, taking into account that some homes have more than one of the nearly 40 million players sold since the format’s introduction. The trade group predicts another 20 million players will ship to retail stores by the end of the year.

In related developments, Ozzy Osbourne said he would take three weeks off from Ozzfest 2002 to be with his wife during her first round of cancer treatment. The band System of a Down will replace him as the headlining act of the annual event, which was the brainchild of Sharon Osbourne.

Additionally, producer Gary Binkow has filed suit against Ozzy and Sharon Osbourne, claiming that they stole the idea for the TV series from him. Binkow claimed in the suit that he met with the couple and representatives of Miramax TV on several occasions between 1999 and 2000 to discuss “a real-life docu-sitcom” about their family.

Osbourne spokeswoman Lisa Vega said previously published reports had made clear that Binkow was not the show’s creator. MTV is not named in the suit.