While Vivendi Universal has been struggling with mountains of debt and executive turmoil at its headquarters in France, Universal Network Television has quietly become the leading independent program supplier in Hollywood.
Part of that is due to prolific producer Dick Wolf, who calls Universal home. But a big part of it is due to Universal production heads David Kissinger and Sarah Timberman, who have been finding ways to cut favorable cable repurposing deals, despite their company’s not being vertically integrated.
“It has been a great hand that we’ve been dealt in that we are not entirely reliant on one network, and the fascinating thing is that we do have shows at every major broadcast [network] now,” said Mr. Kissinger, who is president of Universal Television Production Group and whose duties also include overseeing an original cable production unit for USA Network and Sci-Fi Channel. “As difficult as it has been making series deals, we have gotten through each process with relationships very well intact and with very promising shows in the offing.”
Universal’s scorecard looked pretty good after last May’s broadcast upfronts, with the studio securing orders for three new series for fall 2002, in addition to six returning series. ABC also ordered and scheduled Mr. Wolf’s planned revival of “Dragnet” for its 9 p.m.-to-10 p.m. (ET) post-“Monday Night Football” time period in January 2003. And NBC picked up 13 episodes of “Mister Sterling” for midseason. The series has not yet been scheduled.
Deja vu all over again
All told, Universal is set to produce 11 series (representing 10 hours of programming per week) for the broadcast networks-putting it behind only vertically integrated giants 20th Century Fox Television (19 shows), Warner Bros. Television (18), CBS Productions (15) and Touchstone Television (12).
Universal Network Television in its current form was created in late 2001 with the reintegration of Barry Diller’s Studios USA Television with Universal’s TV assets. Mr. Kissinger and Ms. Timberman are in the middle of moving from Mr. Diller’s old Studios USA headquarters in West Hollywood, Calif., back to the Universal Studios lot in Universal City. For some marquee writers and producers at the studio, it’s a bit of deja vu.
“Let’s put it this way, at the end of my current deal [in 2006], I [will have had the] same phone number for 20 years-the same popcorn stand, so nothing really surprises me,” said Dick Wolf, creator and producer of three “Law & Order” series and longtime Universal Studios tenant. “Actually, my current deal extends back to Studios USA and Barry Diller, so there is this strong comfort factor in dealing with an experienced team here, although I have been through every ownership incarnation-from [original owner] Lew Wasserman to Matsushita to Seagram to Studios USA and back to Vivendi Universal.”
Wolf Films’ production banner at Universal Studios, which dates back to NBC’s “The Rockford Files” in 1974 and the creation of the original “Law & Order” in 1990, has provided a solid backbone for Universal Television to use its clout to attract other A-list producers, such as Michael Mann, Josh Sternin and Jeff Ventimilia, and feed a secondary cable network pipeline for USA Network. “What is interesting is that we talk about what the impact of this reintegration [is] and the net benefit of that transaction,” Mr. Kissinger said. “While there are certainly benefits-chiefly access to Universal titles-we are also very aware [that] being one of the major entertainment companies should not make us complacent about the challenges that face us, because we remain an independent without a broadcast network. We faced the same challenges when we were Studios USA. We may be part of a major entertainment company, but we should also be aware of the obstacles that are still very real.”
Working in close coordination with recently named USA Networks Programming Group President/CEO Michael Jackson, a longtime British TV programmer who carved out a reputation for acquiring envelope-pushing dramas for Channel 4 in the United Kingdom, Mr. Kissinger and Ms. Timberman, who is Universal Television’s president of programming, used the USA cable network as a hammer in its negotiations with the U.S. broadcast networks.
By emulating a precedent-setting model, Mr. Diller and company first established with the split broadcast/cable windows between NBC and USA Network for “Law & Order: Special Victim Unit” and “Law & Order: Criminal Intent,” Universal was able to extract the same deals from CBS for Mr. Mann’s “Robbery Homicide Division” and from ABC for Mr. Wolf’s contemporary take on “Dragnet.”
The breakthrough with ABC is particularly notable because the Disney-owned network had been dictating so-called “repurposing” deals destined for its recently acquired ABC Family Channel-similar to the one Warner Bros. Television had secured last season for the short-lived midseason drama “The Court.”
“Repurposing has become part of the currency of the negotiations, and it is less anxiety provoking than it used to be,” Mr. Kissinger said. “Sometimes you get it if you have more leverage; sometimes you give it if you don’t have it. We gave it to ABC on another pilot with Dick on `Homeward Bound’ [a drama pilot that was not picked up]. But obviously, with Dragnet we had optimal leverage and we were able to win that concession from them.”
“When Barry [Diller] was intimately involved in those multiplexing deals [for “Law & Order: SVU” and “Law & Order: Criminal Intent”], it marked one of the most greatest fundamental and architectural changes in the television business since the quiz show scandals of the 1950s, when the networks took over their airtime instead of leasing out time slots for advertiser to program,” Mr. Wolf said.
“When Barry held out for this, everybody thought nobody [at the networks] would knuckle under, because it is vastly different than the deal for `The Court.’ Even though it was a Warner Bros.-produced show, [“The Court”] had a dual window deal under the Disney umbrella and the Disney platforms as opposed to the deals struck by USA, which is completely an independent company with no connection to NBC or the other [broadcast] networks.”
Repurposing rights
Mr. Kissinger and Ms. Timberman similarly used Mr. Mann’s cachet (he’s a filmmaker who got his start by creating “Miami Vice” in the ’80s) to get CBS to agree on a delayed USA Network cable window for “Robbery Homicide Division.” In attempting to build on the young-adult demo reach brought by “CSI,” the older-skewing CBS resisted the temptation to insist on placing “Robbery Homicide” on its sister Viacom-owned TNN cable network.
“Actually, it might be easier for us as a company with repurposing needs of our own. It is arguably easier to give up repurposing rights with a promise in other circumstances that we’ll be able to get those same rights from the networks we’re in business with,” Ms. Timberman said. “It is a give and take.”
The cable leverage USA Network affords Universal puts it in a more advantageous negotiating position than other struggling independent studios-such as Columbia TriStar Television, DreamWorks Television and Carsey-Werner-Mandabach-which don’t own general entertainment cable networks. But secondary cable platform deals, Mr. Kissinger said, also allow the studio to offer a scaled-down pricing structure on license fees to the broadcast networks-which typically escalate greatly as a TV series enters its third and fourth years of production.
“There are benefits for the network on discounts in programming” emerging from repurposing rights being granted to USA Network, Mr. Kissinger said. “CBS was willing to give us a [cable] window on this Michael Mann project in order to get some relief on the license fee for what is going to be premium network series.”
It is the sum of Universal’s production resources that has Mr. Jackson turning to Mr. Kissinger and Ms. Timberman to help develop some original cable series out of projects that were previously d
eveloped for the broadcast networks. The fruits of that new “cross-pollination” effort came with “Monk,” an offbeat drama about a super-sleuth cop who suffers from an obsessive-compulsive disorder, that was originally developed for ABC but premiered July 12 on USA.
“Certainly, we are spending 50 percent more on original programming for USA, and `Monk’ is a great example of what happens when there is this open channel of creative cross-pollination going on between our production units,” Mr. Jackson said. “We are going to be producing more for ourselves, but it is not going to be something of an imperative for the Universal Television production unit as it is for USA’s original programming group.”
While Universal has an in-house cable outlet with USA, it has always lacked a wider-casting broadcast network. NBC’s growing reliance on Universal-produced series (six in all) has raised renewed speculation that parent company General Electric Co. may make a run to buy the Vivendi Universal Entertainment assets. Much of that was fueled by brief comments by NBC Chairman/CEO Bob Wright when he suggested he might be interested in the TV production properties if Vivendi spun off those assets to cover its mounting debt-in the wake of ousted Vivendi Chairman Jean-Marie Messier going on an entertainment-related spending spree at the one-time water company.
“Well, a large focus of our development for next year was going to be shows about water purification, and we’re scrapping all of that, because those synergies are much less compelling,” Mr. Kissinger joked. “Obviously, those are things that occur very much outside of our daily challenges. We read about them, but we don’t particularly concern ourselves.”
There have also been reports that Mr. Diller, in addition to serving as chairman and CEO of Vivendi Universal Entertainment, could use his Wall Street clout with his separately traded and owned USA Interactive to mount a new spinoff of the Universal entertainment assets. Mr. Jackson acknowledged a Diller-led takeover is “clearly a possibility,” but claimed not to have any sort of intimate knowledge of talks instituted by new Vivendi Chairman Jean-Rene Fortou with his American-based Universal counterparts (including Mr. Diller) and bankers last week to figure out which assets to sell off.
“It is way too early to tell, and I’m not even sure the French know what they want to do yet, in terms of reviewing all of the assets,” said Mr. Jackson, who was not at the meetings.
Veteran producer Shaun Cassidy, who has links to Universal going back to when he starred in “The Hardy Boys Mysteries” and now as executive producer of CBS’s CIA-based drama “The Agency,” expressed no concern about a pending change in ownership at Universal, given the current management team that’s in place.
“Mr. Diller has proved he could do pretty much what he wants to do and bring more value to the assets he touches,” such as the Home Shopping Network, Ticketmaster, Hotels.com and Expedia properties within USA Interactive, Mr. Cassidy said.
“There has been a lot more stability under the current management,” he added. “David’s mandate has always been about getting the best people, which has made Universal a flourishing oasis for creatives in town who don’t necessarily want to take the first deal to come along at the network-aligned studios.”