MRC is the toast of the TV business
EmptyIt's now the sixth-largest supplier of primetime television programming. Yet few in Hollywood know anything about it.
A year after entering TV, Media Rights Capital has landed series on ABC, HBO, Comedy Central and Lifetime. In the fall, MRC -- backed by AT&T, ad conglomerate WPP, Goldman Sachs and investment fund D.E. Shaw -- will program the CW's entire Sunday lineup.
But despite scoring more new series orders this year than any major TV studio, MRC has kept an extremely low profile.
The company operates behind an iron curtain, aggressively guarding information about its projects and financial structure. There will be no MRC name card onscreen and no producer credit for its TV topper Keith Samples on any of its shows.
Despite the veil of secrecy, MRC has the industry talking.
Many are welcoming a viable indie player in a marketplace dominated by vertically integrated conglomerates, and many believe MRC has fashioned a business model that will change television. But the indie's meteoric rise also has left some wondering whether it is growing too big too fast. Could MRC be another ATG?
After a flying start in 1999, Michael Ovitz's Artists Television Group crashed and burned two years later, a victim of backing too many expensive series right off the bat without the support of an off-network revenue stream.
In its first year, ATG scored a dozen pilots at all broadcast networks, five of which were ordered to series, including the comedy "Cursed" for NBC and Darren Star's drama "The Street" for Fox. Another, CBS' "The Ellen Show," was reworked and picked up the next season.
This year, MRC's tally includes six scripted series, including Mike Judge's animated comedy for ABC "The Goode Family," and two reality shows.
Additionally, MRC filmed two multicamera comedy pilots for Lifetime as part of a four-for-one deal, guaranteeing that one, probably "Rita Rocks," will go to series.
The company's Fox comedy pilot "Outnumbered" is in midseason consideration and was featured last month at the network's upfront.
MRC co-CEO Modi Wiczyk, a former Endeavor agent who launched MRC more than four years ago with his Harvard Business School classmate Asif Satchu, says the perception that the company might be doing too much too fast in television is "a little miscast."
"We started thinking about going into television back in 2004-05 when we started laying the groundwork by selecting our investors such as WPP and building up the staff," he says. "We're out of the gate rather quickly, but we were in the gate for a long time, very carefully preparing."
As with ATG, the danger with MRC's aggressive push in TV is that if it "deficits" too many shows -- meaning it loads up on expenses with the hope of recouping down the road -- it could get stuck with big losses if most get canceled quickly, as happened with ATG. None of ATG's shows lasted more than a season.
But there are key differences between the MRC and ATG business models. ATG spent about $60 million in upfront costs on overall deals, outbidding the major studios to snag such big-name talent as Star, Mitch Hurwitz and Tom Fontana. It also was saddled with $5 million-$7 million in overhead from hiring top-notch executives for its team, led by former Columbia TriStar TV president Eric Tannenbaum.
In contrast, MRC has little overhead and virtually no development costs. Its small TV team is led by Samples, a somewhat unorthodox choice given that his primetime experience comes primarily from directing episodes of WB Network series and consulting top showrunners on syndication sales. A syndie veteran, he founded and ran Rysher Entertainment until 1997, when he left to focus on his writing and directing career. Samples' association with MRC first surfaced in June 2007 in connection with MRC's unsuccessful bid to acquire the off-network rights to NBC's "The Office," which Samples orchestrated.
Samples' team consists of a couple of lesser known executives, including head of production Jim Glander and production exec Brandon Hill.
"We're not in the development business, we're in the episodic business," says Samples, who along with Wiczyk has received high marks from TV executives for his entreprenuerial skills.
Indeed, MRC doesn't develop TV projects internally. It often picks up completed scripts, such as the animated comedies "Goode" or "The Life and Times of Tim," originally a 2007 Warner Bros. TV pilot for Fox.
With rare exceptions, including "Outnumbered," MRC doesn't make pilots, opting for more cost-efficient straight-to-series orders. That is in sync with some broadcast networks' recent shift toward straight series orders from outside suppliers.
MRC also is taking on challenges that traditional production outfits won't, like supplying a whole night for the CW, where the economics are so challenging that such major studios as 20th TV and Universal Media Studios generally won't produce shows for the network. MRC already is moving to expand the CW demographic on Sunday from 18-34 to 18-49 to attract more viewers and ad revenue.
Instead of a development staff, MRC so far employs in-house nonwriting exec producers such as former studio execs Mindy Schultheis and Michael Hanel. MRC also doesn't offer upfront money to talent but rather profit participation. "Goode" co-creators Judge, John Altschuler and Dave Krinsky are rumored to own as much as half of the project's backend.
"Sometimes, to get your foot in the door, you have to make deals you wouldn't normally make," one industry source says.
But the practice of giving substantial profit participation to networks and talent also raises eyebrows.
"Their business is crazy," a top network exec says. "They will be lucky to survive."
Some high-level studio execs disagree with that assessment. "They're buying their way into the business with fees above normal and backend (payments) way above normal, but they can still make money," one says. "Now they have to get lucky and get a couple of hits. If they don't, their deficits will begin piling up like Mike Ovitz's ATG."
Even with part of the episodic deficits covered by a distribution deal with Columbia TriStar TV, ATG's costs began to add up quickly with so many series, all of them on the deficit-heavy broadcast networks.
MRC, on the other hand, is limiting its financial exposure by doing a mix of broadcast shows and less expensive cable series.
It also retains international rights to its series and is selling the six ordered shows, plus "Rita Rocks" and midseason CW hopeful "F.A.T. City," through its deal with Elisabeth Murdoch's ShineReveille.
Additionally, industry observers suspect that MRC's aggressive initial strategy of giving away ownership of its shows could be replaced by more standard business terms after the company establishes itself.
Unlike Ovitz and his $100 million investment in ATG, MRC seems to be following Max Bialystock's two cardinal rules of producing: One: never use your own money. And two: never use your own money.
MRC gets its backing from a syndicate of big-name investors who put up a $400 million annual fund; $250 million was allocated for an ambitious eight-picture feature slate featuring projects with the likes of Robert Rodriguez, Cameron Diaz and Sacha Baron Cohen.
The company's track record in the field is mixed so far, with the critically acclaimed drama "Babel" and flops "Sleuth" and "Deception."
On the TV side, it's too early to predict how successful MRC will be.
"You can't judge us by one year," Wiczyk says. "We're going to have a lot of programming, a lot of ups and down. Let's see where we are four years from now."
MRC and Endeavor: An evolving relationship
Media Rights Capital boasts blue-chip financial backing from AT&T, WPP, Goldman Sachs and D.E. Shaw. But it's talent agency Endeavor, once a nonvoting minority investor in the company, that has attracted the most attention.
In 2003, Endeavor provided seed money to its rising indie film financing agent Modi Wiczyk to launch MRC.
Under California law, talent agencies are not allowed to produce or maintain an ownership interest in entertainment product. So a year ago, when MRC's ties to Endeavor came under media scrutiny, reps were emphatic in stressing that the company is a financier, not a producer. "We are not producorial," Wiczyk told The Reporter in April 2007.
Now reps for MRC and Endeavor confirm that the talent agency is no longer an investor in the company.
The financial split is said to be mutual, as MRC didn't want to be tied to one talent supplier and Endeavor didn't want to be tied to one buyer. (As with its movie division, most of MRC's TV projects have involved Endeavor clients.) Insiders also note that Endeavor's plan had always been merely to help MRC grow into a stand-alone business.
Even with potential legal obstacles minimized, MRC still won't call itself a production company.
"We're a sales entity, a source of capital and infrastructure for phsycial production, but the productions exist on their own," Wiczyk says.
However, in the press release last month announcing the CW's deal with MRC, CW entertainment president Dawn Ostroff referred to MRC as "the leading independent producer of television programming."
MRC's series orders
Surviving Suburbia (CW, comedy, 13 episodes)
Valentine, Inc. (CW, dramedy, 13 episodes)
Easy Money (CW, drama, 13 episodes)
The Goode Family (ABC, ani comedy, 13 episodes)
The Life and Times of Tim (HBO, ani comedy,
Krod Mandoon (Comedy Central, comedy, 6 episodes)
Rita Rocks (Lifetime, comedy, pending)
F.A.T. City (CW, drama, pending)
In Harm's Way (CW, 10 episodes)
Name That Tune (MTV, VH1, CMT, 19 episodes)