Creator of ‘Law & Order’ Is Facing Chance of Being Outgunned in Talks

Holding a gun to someone’s head is common fare on the NBC hit series “Law & Order.” Dick Wolf, the show’s creator and executive producer, was poised to engage in a similar tactic when negotiating with the network later this year.

That is, until Tuesday, when NBC parent General Electric Co. struck a tentative deal to gobble up Vivendi Universal’s entertainment assets.

The proposed merger undercuts Wolf’s leverage in the upcoming talks to renew the “Law & Order” franchise, illustrating just how quickly alliances -- and fortunes -- can shift as a result of the sudden change in Hollywood’s landscape.

Wolf was widely expected to strike the most lucrative deal in TV history, as he sought an estimated $1.6 billion over three years for his trio of cop-and-courtroom shows: “Law & Order” and its two progeny, “Special Victims Unit” and “Criminal Intent.” That record amount could have been boosted by $200 million if the agreement included a fourth “Law & Order” show, which has been proposed for NBC’s fall 2004 schedule.

Aside from the shows’ phenomenal popularity, Wolf’s muscle also came from his 17-year production partnership with Universal Television, which owns more than 50% of the “Law & Order” programs.

If the merger between NBC and Universal is successful, however, there is little incentive for Universal to help Wolf extract the highest price possible from the network. In effect, it has switched sides of the negotiating table.

Wolf declined to comment for this story.

To be sure, the 56-year-old producer is certain to be made very rich from the renewal deal -- even if not quite as rich as he imagined before.

Still, the circumstances underscore how the changing dynamics in Hollywood are giving more power to the networks and the media conglomerates that own them. Concerns about this situation have prompted the Writers Guild of America to lobby the federal government to force the networks to buy 25% of their schedule from producers independent of them. The goal is to ensure more voices and diversity in programming.

“The more the networks produce shows in their walled-off gardens, the more alike their shows will be,” said Victoria Riskin, president of the Writers Guild of America, West. “There needs to be that healthy tension between the creative impulse and commerce, and that gives us the variety we need to see on television.”

While Wolf is likely to do just fine in his negotiations with NBC, Riskin added, “I’m more worried about what kind of leverage the Dick Wolfs of the future will have.”

The relationship between outside producers and NBC has tilted over time. Before the mid-1990s, federal rules effectively prohibited TV networks from owning the studios that produced their shows. Studios and networks were frequently embroiled in battles over the fees that networks would pay for programming. In many cases, the studios had the upper hand; they could always threaten to take a hit show to a rival network.

When the federal rules were relaxed, it prompted a wave of media consolidations pairing most of the networks -- Walt Disney Co.-owned ABC; Viacom Inc.-owned CBS and UPN; News Corp.-owned Fox; and the WB, owned by AOL Time Warner Inc. and Tribune Co.-- with major TV-production studios. That eliminated much of the bare-knuckled negotiating.

Not so for NBC, however. Before Tuesday’s tentative agreement with Universal, it was the only major network without a sizable production partner.

Which is precisely why the Wolf camp figured earlier this spring that it had plenty of ammunition to extract big increases from NBC.

The network has grown increasingly dependant on Wolf’s hourlong dramas, which consistently rank among television’s 15 highest-rated shows. By some estimates, the three “Law & Order” shows will generate about $180 million for NBC this year, nearly a quarter of the network’s prime-time profit.

This summer, nearly a fifth of NBC’s schedule has been “Law & Order” repeats. Unlike NBC’s other marquee dramas, including “ER” and “The West Wing,” repeat episodes of Wolf’s shows have the ability to draw big audiences. That fact alone, according to industry sources, means that NBC should pay more for an episode of “Law & Order” than the $8 million to $9 million an episode the network currently pays Warner Bros. for “ER.”

Negotiations to renew Wolf’s shows were put on hold this spring when NBC waded into the auction for Vivendi’s entertainment assets, including its movie studio, theme park and cable television properties.

Just how much Wolf may ultimately suffer at the negotiating table because of the Universal-NBC merger remains to be seen. But others haven’t been shy about claiming to be wronged because of media “synergy.”

In one case, David Duchovny, star of “The X-Files,” sued the 20th Century Television studio that produced the show, alleging that he had been cheated out of millions of dollars in profit. He accused the studio of offering the show to a sister company, the cable network FX, at a discount. News Corp., 20th’s parent, eventually settled with Duchovny.

“More owners, more buyers and more distribution is good,” said Marty Kaplan, associate dean of USC’s Annenberg School for Communication. “Fewer owners, few buyers and less distribution is bad. There are fewer options.”

For his part, NBC Chairman Bob Wright contends that a merger with Universal may actually provide more opportunities for Wolf and his shows. Wright, who would head up the proposed joint NBC-Universal operation, said he discussed those possibilities with Wolf on Wednesday.

NBC Entertainment President Jeff Zucker added that the network would certainly pay a fair price for “Law & Order.”

“It’s not an issue,” he said.