Marc Graboff on Updating ‘Idol,’ How He’d Help NBC and Paying ‘Friends’ Cast With Private Planes (Q&A)

A version of this story first appeared in the Oct. 11 issue of The Hollywood Reporter magazine.

Marc Graboff had a front-row seat for negotiations that brought Survivor to CBS, kept the Friends cast on NBC and moved Jay Leno from 11:35 p.m. to 10 p.m. (and back). Now, one of TV’s most respected dealmakers is leading Core Media Group, best known as the parent company of Fox’s American Idol and So You Think You Can Dance.

In his nearly 2-year-old role as president, Graboff, 57, oversees about 500 employees globally, plus a varied — and expanding — portfolio of businesses ranging from a music management company (19 Entertainment) to a production company (Doomsday Preppers‘ Sharp Entertainment) to publicity rights for Muhammad Ali and Elvis Presley. (Those brands represent 20 percent of Core’s business, but he reveals he is seeking a strategic buyer as the company hones its focus on content.)

For Graboff, the first employee in the CAA mailroom during the 1970s before attending Loyola Law School, Core provides an opportunity to act more quickly than he could during his decade-and-a-half tenure at CBS then NBC. At the latter, he rose from head of business affairs to chairman of NBC Entertainment and Universal Media Studios following Ben Silverman‘s departure.

Graboff now has a three-for-one drama development deal at his former network through his company’s Halfire-Core joint venture, along with projects set up for broadcast (Fox’s Billy the Kid) and cable (OWN’s Crazy.Sexy.Life.). The married father of three (daughter Jessica recently was made an agent at CAA) sat down with THR in September in his West Hollywood office.

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You’re now looking at broadcast networks from the outside. What’s their biggest challenge?

There’s so much inertia. I think it’s going to continue for a while, but you’re seeing more and more cracks in the facade. Drama development at the broadcast networks is slower this year. If I were a writer of a serialized, edgy one-hour show that’s darker, why would I go to a broadcast network? So the networks have a real challenge to attract those kinds of writers. The biggest selling point the broadcast networks have is that they still attract scale; when you hit on a broadcast network, you hit big. The other is that a typical network spends over $100 million a year on development and pilots. That’s a lot of money to launch six shows, times four or five networks. And how many of them work? Those guys are playing at the $10,000 blackjack table. We don’t want to play at that table.

What does your table look like?

We’re trying to provide content that’s lower-budget but still high-quality through international co-productions or incentives. You know, Breaking Bad originally was going to be shot in L.A., then they got incentives to do it in New Mexico. You’ve got to be nimble like that. How many times was I at a broadcast network where we would want to shoot a show in Canada or Texas, and we would hear, “Well, so-and-so wants such-and-such as the star, who will only shoot in L.A. or New York”? We’re not bound by that. The trade-off is we won’t do pilots.

Historically, these kinds of lower-budget acquisitions have been relegated to the summer and have struggled. Why?

It’s because they’re treated as acquisitions and not as homegrown development. The networks are not invested, so you don’t get marketed or scheduled well. You get treated like, “Ah, that’s your low-cost acquisition. We don’t want anything to do with it.” What we’re doing is we’re engaging the network at the pitch phase, not at the phase of, “Here’s the pilot. Would you like to buy the series?”

How much are you saving the networks?

For The Blacklist, NBC is probably paying Sony — and every network pays in this range — low end $1.5 million to $2 million for an episode. You’re also doing a pilot where you’re paying $3.5 million to $4 million, and the studio’s deficiting $5 million. [In success, the studio makes that money back in ancillary revenue from syndication, international and digital.] Instead, what we’re saying is: “You read the script. You order 13 episodes. We’ll give these to you for well under $1 million an episode — $750,000 at the high end.”

If you were brought back to fix NBC, what would be your first move?

One thing I’d do is try to diversify the portfolio a bit more away from the very expensive programs. There’s not a directly proportional relationship between money spent and quality of programming. So I’d take the money that they’re spending and give myself more at-bats with it. I’d balance the portfolio with the expensive tentpoles — the $4 million hours: the Revolutions, the Blacklists ­­– and then the kind of things that we’re developing: international co-productions, shows shot on a lower budget, multicamera comedies. I’d do reality shows, too, but unfortunately those aren’t the cheap alternative anymore.

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Given the money being thrown at the host and judges, coupled with shrinking ratings, at what point does Idol not make financial sense?

Fox still makes a very nice profit from the ad revenue alone, and it helps them command a bit of a premium in the marketplace. There are a lot of intangibles. Think about what it does for their retrans negotiations and as a promotional platform. You’ve got to think about how many hours of television Idol provides for that network, too, so the unit cost per hour goes way down as a result. That said, the show’s expensive. At what point does it not make sense? When the ratings fall below a certain point, if we can’t read just the cost of the show, there could be a problem. But I don’t see that happening anytime soon.

How are you readjusting?

We’ve revamped the show this year behind the camera and in front of it. The judging panel is, as a whole, cheaper than last year because you’ve got one fewer judge. I could never bring myself to watch it when I was at NBC because it was the Death Star; now, I have intimate knowledge of it. Look, last season was not a great season, but I think we all learned a lot. Idol is still the gold standard, so what we’ve done this year is refresh the format and make it about the contestants again. The music’s going to be different and so is the look. And initial reports are that the judging panel has got a lot of good chemistry.

Where is the ceiling on these monstrous judge salaries?

They get it because they can. The arms race for competition-show judges started with Christina Aguilera on The Voice, and Idol should not have played into that arms race. But once they started, it got crazier. And then X Factor and then The Voice again — it ramps up. This year, other than one of the three [Jennifer Lopez, making an estimated $15 million], it’s within a normal salary range.

What’s the wildest thing you’ve had to write into a contract?

I remember trying to close the cast deal on the 10th season of Friends. We were apart by a not-insignificant amount of money on the per-episode fee, and I put a number on the table to the cast’s representatives. They were taping a show that night, so literally we’d wait for a break in shooting, then they’d all congregate in Jennifer Aniston‘s dressing room.

Then they’d come out with a note that they would hand to their rep, who would call me and the head of business affairs at Warner Bros. By this point, it’s already Dec. 23, and people are drunk in the halls, and their guy calls and says, “You’ve got to give them something other than just money to get this deal closed.” I said, “Well, we can take that same chunk of money that we had offered that they rejected and turn it into an equivalent amount of airplane hours on chartered jets.” They took the deal.

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Actors aren’t making “Friends money” anymore, on the front end or the back end …

One of the ways the business needs to change is to have more transparency in the backend world. We’re trying to be a very talent-friendly place, and one way we do that is not to provide a layer between the vision of the talent and what ultimately gets in front of the audience. It always made me nuts at the network or the TV studio to homogenize something you just paid so much money for. The other way to do it is on the business level, so we’re putting the finishing touches on our backend definition. I like to joke that I used to be a bomb builder, so I know how to dismantle a bomb. We’ve taken out a lot of the traps.

Such as?

For example, in the old days when the studios didn’t have their own home video companies, you’d have to hire Joe Blow Home Video Company to be your home video manufacturer and distributor, and they would license [the content] from you and they’d pay you a royalty of like 20 percent. The business matured and the studios created their own home video companies, but still they only take 20 percent of the revenue that comes in on home video and attribute it to the backend. In our definition, 100 percent of whatever money we make in home video, including electronic sell-through, goes into the pot. When we shoot in a territory where there’s rebates and tax credits, where you’re getting huge percentage of your budget rebated, studios don’t give the benefit of the credit to the participants. We are. Those are two examples among many.

Looking back, what’s the deal of which you’re most proud?

I was involved in building the first deal for Survivor with Mark Burnett. We created a model that enabled the show to get funding to be on the air, and it helped start the turnaround of CBS. Another one was with Dick Wolf in 2004. Law & Order was owned by Universal when it was not related to NBC, and NBC was the network for Law & Order and all the spinoffs when it was not related to Universal.

We were merging as a studio and network, and we had this talent who was like: “Wait a minute. I’m not going to trust how your network and your studio are going to negotiate with each other on my show.” And these were billion-dollar franchises. So we had to come to an understanding with Dick and create a template for how it would work going forward, which was both challenging and fun. We held up the NBC-Universal merger for that deal to close, and at the end of it Jeff Zucker sent me a bottle of wine and a box of cigars, which was really sweet. Dick Wolf sent his lawyer a Bentley.

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What deal do you regret most?

The way the whole late-night thing went down in 2010. Unfortunately, I was more the guy behind the [scenes] cleaning up the mess, and it was quite a mess. Long-term friendships were blown apart as a result of it. It didn’t need to be done so sloppily and with such hard feelings, but a lot of personalities were involved that just exacerbated it. The person who got tainted in all of it who was really innocent was Jay Leno.

You were the first mailroom employee at CAA. What’s your best story?

In 1977, CAA consisted of seven agents in a little corner suite in an office building in Century City. They didn’t have a kitchen, so I’d wash their coffee cups every morning in the men’s room. After several months, I became an assistant on the desk of Ron Meyer, who to this day is one of my mentors. But I drove him to the edge so many times because I was such a horrible assistant.

One of the things I’d do is forget to give Ron some of his phone messages. Any agent would go crazy, but Ron is the kind of guy that if you called him right now, you’d get a call back in 10 minutes from wherever in the world he is — he’s amazing like that. So in 2004, when NBC acquired Universal and Ron and I became colleagues, I wrote him a note that said: “I’m so happy we’re gonna be working together again. I’ve always looked up to you. Best, Marc. P.S. On June 6, 1978, I forgot to tell you [client] Bill Persky called.”