When ABC’s highly anticipated new drama “FlashForward” premieres in September, HBO will probably be scrutinizing the show’s ratings just as much as the alphabet network will.
That’s because the pay cable channel was pitched “FlashForward” and passed, but not before negotiating a nice stake in return for letting the producers shop it elsewhere.
HBO will get $5,000 to $7,500 for each episode that airs and roughly 7% of any revenue the show generates from its reruns, or the “back end,” in industry parlance.
“FlashForward,” which is executive produced by David Goyer and Brannon Braga, is based on the Robert J. Sawyer novel.
The industry uses a word that’s probably not appropriate for a family paper to describe this practice, but it can be called “chump” insurance.
No network executive wants to be the chump who let a hit walk out the door, even if a show isn’t a good fit with the first place it is pitched. So it has become commonplace in the industry to negotiate a piece of the show as insurance or a hedge in case the program becomes a hit somewhere else.
The deals not only highlight how networks have learned to protect themselves but also how competitors such as HBO and ABC can end up on the same team. Although co-productions between two studios or a network and a studio are not uncommon and are well-known, these pacts usually fly under the radar.
The networks that are initially on board usually spend some money on development and could hang on to a script or show and let it languish for months or even years.
Programs with chump insurance include the CW’s “Life Unexpected,” which is made by CBS Productions but was originally pitched at Disney’s ABC, which is now on the show’s payroll. CBS, meanwhile, has been getting a cut of the USA drama “In Plain Sight,” which is produced by NBC Universal. News Corp.'s 20th Century Fox Television had a stake in “Everybody Hates Chris,” which was made by Paramount (now CBS Television Studios) for UPN and later the CW.
Typically, a network letting go of a program will cut a deal that could give it anywhere from 2.5% to 10% of the back end and as much as $7,500 per episode, the latter of which becomes a line item in the budget.
Of course, there are limits to these pacts. HBO wanted a production credit on “FlashForward,” but apparently that’s not part of the deal with chump insurance.