Broadcast networks risk losing Emmycast

Thorny issues surface as Big 4, ATAS work to ink new deal

The clock started ticking June 1 on the contract period during which the four broadcast networks have exclusive rights to negotiate a new deal to air the Primetime Emmys, and already thorny issues have surfaced, including a difficult discussion over a license-fee increase.

The current fee is $7.5 million per year, and that's before the network in question spends an additional $3 million-plus on production and more for marketing and ads.

If the Big Four don't make a deal by the time the show airs Aug. 29 on NBC, broadcast exclusivity ends and the Academy of Television Arts & Sciences can solicit bids from basic and pay cablers. This show ends an eight-year "wheel" in which the Big Four did two shows each under the contract.

ATAS, which gets the bulk of its budget from the Emmy license fee, again has retained attorney Kenneth Ziffren to represent it in negotiations, working with academy leadership and an internal committee. Ziffren declined comment, but sources said he has had preliminary one-on-one discussions with reps from each of the broadcasters.

TV academy members have long complained that the Emmy license fee is too low. They compare it with the Academy Awards, for which ABC pays about $50 million a year, but that includes production costs. The Oscars, which have an exclusive long-term deal with ABC in the U.S., typically attract three times as many domestic viewers as the Emmys.

ATAS et al also will argue that the Big Four benefits from big event TV shows that build their brands. However, the broadcasters make only a modest profit at best on the Emmycast, and they are adamant that they are prepared to walk away if ATAS demands a big increase in the fee.

They point to weak ratings in recent years for the Emmys, especially since NBC began airing NFL games in direct competition (in the years the Peacock doesn't air the show). When it is NBC's turn, the network moves the Emmys to late August -- before the pro football season begins -- from its traditional mid-September slot.

For the other broadcasters, that means bidding for a show that in the best case will place second in the ratings to football.

Plus, networks have not seen a big ratings bounce even when one of their shows wins an Emmy -- think NBC's "30 Rock" and CBS' recently canceled "The New Adventures of Old Christine."

The benefit mainly goes to pay cablers, which showcase their longforms. "The show spends an hour on the movie-of-the-week categories," a broadcast source said. "We don't even do those kind of movies any more. They spend all this time on 'Little Dorrit,' which seven people have seen. If that's what they want to do, then the networks are like, 'I'm not sure ...' "

In short, HBO, Showtime and Starz benefit, the source added, "because they have a subscription model. They spend more on ads because it does make a difference for them."

The broadcasters are pushing for other changes to the deal as well.

Some seek to target the show even more toward women (who already make up roughly 55% of the viewing audience).

Several want a multiplatform deal, allowing them to air pre- or postshow programs on their sister cable networks and online. CBS, which doesn't have a sister cable channel aimed at women, appears willing to let those rights be sold separately.

ATAS tried giving the Emmys to one network in the past (Fox), and eight years ago it almost made a deal to put the show on HBO, which was going to drop its pay wall for the night.

In the end, however, it became clear that if the Emmys were not on broadcast, the Big Four would not enter as much, wouldn't buy their usual 100 or so tickets, wouldn't make their top talent available, wouldn't cover it as intensely and would fiercely counterprogram the telecast.

Given the pros and cons of making a deal, negotiations will likely drag out until just before the telecast.
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