TCA 2012: ABC Chief 'Optimistic' About 'Modern Family' Resolution

Modern Family

"I expect the season to start at time," Paul Lee told the TV press Friday.

ABC chief Paul Lee greeted the TV press Friday with no news to report: his top-rated series is hardly one big, happy (Modern) Family.

"We’re in the middle of negotiations at the moment; and we’re optimistic that we’ll be able to resolve it," the Entertainment Group President told TV reporters gathered for the Television Critics Association's semi-annual press tour of a "wonderful" series he expects will start on time.

Thus far, his network has managed to stay largely out of the fray as his top-rated comedy’s six adult cast members sue the show’s studio, 20th Century Fox TV, claiming their contracts are "illegal" under California law. The move by the show's actors -- Julie BowenTy BurrellJesse Tyler FergusonEric Stonestreet, Sofia Vergara and Ed O’Neill -- was seen as a bold tactic in a salary negotiation that has gotten particularly ugly in recent days.

For the series' third season, all but O’Neill had made about $65,000 per episode. Earlier this week, 20th TV offered new contracts that would pay the cast $150,000 per episode for the fourth season with a $50,000 bonus, escalating to around $325,000 for the expected ninth season. The cast wants significantly more, especially in the later years of the show. 

As The Hollywood Reporter first reported, Modern Family’s co-showrunner Steve Levitan sent an email to the cast Wednesday from himself and co-showrunner Chris Lloyd. The letter is said to have described the cast as a “family” that should work through its issues. It is believed to have irked some of cast members and their reps because the pair has sizable back-end stakes that will prove particularly lucrative. (With the exception of O’Neill, who has a small back-end, the actors have no equity stake in the show.)

All six actors did appear at a table read for the top-rated comedy’s fourth season premiere Thursday morning, and their reps met with 20th TV chairmen Dana Walden and Gary Newman later that day. ABC’s head of business affairs Jana Winograde, reportedly sat in, since the network’s licensing agreement with the studio provides that ABC fund production of the series’ later seasons. Though he remained tight-lipped on specifics, Lee noted: "We are with 20th on this." Sources say there was “progress” made at the meeting, with at least one suggesting a deal could come by the weekend’s end.

To be sure, there is much at stake for both the network and the studio. Modern Family, which regularly draws more than 13 million viewers, generated $164 million in advertising revenue for ABC in 2011, up 40 percent from a year earlier, according to Kantar Media. What’s more, the multiple Emmy-winning series has proved an American Idol-style launching pad for the network’s other comedies, including Happy Endings, Don’t Trust the B---- in Apartment 23 and the upcoming alien effort The Neighbors.

Coming out of its breakout freshman season in 2010, 20th TV inked a rich syndication deal with USA – the NBCUniversal-owned cable network’s first major comedy acquisition—for a license fee close to $1.5 million an episode. That’s roughly on par with the deal Turner’s TBS struck with Warner Bros. TV for repeats of The Big Bang TheoryModern Family, which garnered 14 Emmy nominations last week, is poised to reap many more millions from broadcast stations when the series rolls out in syndication in 2013, and foreign revenue is said to be particularly robust.

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