Will NBC Take the Fifth?

Apr 14, 2003  •  Post A Comment

NBC has no fear that viewers will grow tired of Fear Factor.
The network is negotiating with series owner Endemol for a long-term renewal deal for its highest-rated reality series, sources said. The series’ current license agreement expires after next season. NBC had already ordered a fourth season of around 30 episodes from Endemol under its current agreement. The show is scheduled to return to production in early May.
NBC currently pays a license fee of around $800,000 an episode to Endemol, sources said. NBC is essentially looking to extend its current deal long-term with the option to renew the show each year. If NBC and Endemol can’t agree on terms for season five and forward, Endemol could shop the series around to other networks. However, NBC has the right to match any offer on the show, sources said.
Endemol, an independent producer based in the Netherlands, sold series such as Fear Factor and CBS’s Big Brother to U.S. networks at the beginning of the reality craze in the late 1990s, when it was able to negotiate limited-term licenses that had to be renegotiated after a few years.
The deal is somewhat atypical in the reality world today. Traditionally, reality series renewals are straightforward, because most are produced by sister studios to the network on which they air. The network license fee usually covers the full cost of producing the show and the studio assumes no risk, so the network gets a perpetual license, guaranteeing the show will remain on the network for its entire run.
Sources said distributor NBC Enterprises is interested in obtaining distribution rights for future off-network sales to cable and stations as early as fall 2004. If a syndication deal were to be worked out at the same time with NBC Enterprises, industry insiders speculate that could boost the show’s license fee on NBC.
Originally created as a summer series, Fear Factor started its third season on NBC in January, leading off Monday nights at 8 p.m. to 9 p.m. (ET). It gave a boost to the network’s lineup and turned into NBC’s highest-rated reality series, which the network desperately needed after being late to get into the reality game.
Fear Factor has more than 100 episodes in the can and more on the way, and many observers have looked at the series as a possible trend-setter in the world of syndication, where reality shows have not typically done well. Before now, only October Moon’s Real World and Road Rules have hit the syndication circuit, with Sony’s Ripley’s Believe It or Not coming this fall. Both were successful reality series in their original cable runs. Buena Vista and NBC have tried to turn prime-time game show successes into first-run editions for syndication. However, the possibility of a hit network reality series hitting syndication has not been explored in recent years.
One reality agent suggested interest would be strong once the series hits the gold mine of back-end sales.
“I believe that there is a likely strong market for Fear Factor, as local stations will not only get a show that they could not afford to produce on their own under the current syndication model,” the agent said. “Stations would gain the benefit of the multimillion dollar prime-time marketing machine that’s already made Fear Factor a household name.”
The series is averaging a 5.7 rating and 15 share in adults 18 to 49 and 13.5 million total viewers. It ranks seventh among all NBC series in adults 18 to 49 and ninth among all NBC series in total viewers.
Aside from the strong ratings, Endemol can make the argument that unlike most reality series, which don’t repeat well, Fear Factor is valuable because it uses a closed-ended standalone format that has done well for NBC in repeats, often wining its time period in adults 18 to 49.
On the flip side, NBC could argue that the show’s not a huge moneymaker because many advertisers still shy away from Fear Factor’s gross-out and humiliating content. Plus, the whole attraction of reality series in the first place is that they are cheap. If license fees start escalating toward scripted series realms, then the shows start losing their appeal.
Matt Kunitz and John de Mol are the executive producers of Fear Factor. NBC and Endemol had no comment.
-Chris Pursell contributed to this report