The deals made by Tribune, Fox, and Weigel’s WCIU for Family Guy last week showed a return of cash into the syndication marketplace, something that has lacking for the past year or so.
But hold the bubbly; in fact, you might have to take the bottle of champagne back to the store.
It turns out Tribune paid less to renew the second cycle of Family Guy in order to keep the program on their station group, in addition to taking on American Dad on an all-barter basis, according to an article in Broadcasting and Cable. In fact, Twentieth agreed to accept a lower license fee for less than half of what Tribune paid for in the first cycle of the show.
Yes, there is still cash in the syndie market – but not much of it.
Broadcasters are being battered by the economy and weak advertising market, as major station groups are losing money and laying off employees. The cutbacks are so severe, it may be now costing them to compete with cable for the off-network rights of some of television’s most popular shows.
Off network sitcoms and dramas have long been the bread-and-butter of television syndication since the 1950’s – in the past, stations bought programming for straight cash. But when barter programming became popular in the 1980’s, stations feasted on the freebies and it hasn’t been the same since.
In the past, a sitcom like 30 Rock would have been sold for cash market-to-market – collecting strong license fees along the way. But this changed when Designing Women and Family Matters were brought to the market on all-barter basis in the 1990’s, meaning stations would pay no cash to acquire the show and the show’s revenues would depend solely on barter advertising revenues. Today, it’s the norm. And even worse for them, cable gets first crack at acquiring off-net programming (30 Rock was sold to Comedy Central and WGN America late last year and then to syndication on an all-barter basis.)
There is fear in the broadcast station community that The Big Bang Theory – currently one of television’s hottest shows on the air right now – may be headed to cable – and only cable. Fueling speculation of this is the recent deal USA Network made to acquire the exclusive rights the entire CSI library in 2014– for around $500,000 per episode. The price Warner Bros. may be asking for Big Bang may be too much for stations. The most likely scenario is a shared window between cable and broadcast.
Cable has an advantage that broadcast groups don’t – the luxury of collecting both subscriber fees from MSOs and earning advertising revenue, and its one of the reasons they can overpay for off-network fare (of course, they can cover their “losses” by raising their customers’ bills.)
In the past, broadcast stations had exclusive rights to off-network sitcoms in their initial cycles, protected by the “syndex” rules beginning in 1990. But in the last several years, cable has become more aggressive in acquiring off-network content – particularly sitcoms. It was only few years ago when most movie packages and off-net dramas started going exclusively to cable.
And broadcasters’ reputation for being bean counters will only cost them in the long run – just ask NBC, which gave up dramas in the last hour of prime-time to save bucks and decided to stick Leno in there instead – not to mention the cost-cutting at its O&Os, which saw WNBC-TV in New York get rid of Live at Five for a cheaper (and much lower-rated) lifestyle show and WRC-TV in Washington D.C. dropping Dr. Phil for a re-purposed content show.
With an abundance of off-network D-level sitcoms and low-rent first-run programming, local stations may wind up as third-class citizens in the marketplace.
Broadcast stations are now only repeating the mistakes their brethren at terrestrial radio have made: cut, cut, cut until there’s nothing left to cut. And it just might cost them the rights to one of the hottest sitcoms on the air today.