|
'ER' doctors rescue NBC
|
 |
January 14, 1998: 6:33 p.m. ET
Network agrees to pay almost $1 billion to keep top-rated drama
|
NEW YORK (CNNfn) - One day after losing NFL football rights, NBC agreed Wednesday to shell out nearly $1 billion to keep its top-rated hospital drama "ER" from jumping to another network.
The move keeps NBC's key Thursday night line-up from going on the critical list after the creators of "Seinfeld" - the other half of the network's ratings juggernaut -- announced plans last month to call it quits at the end of this season.
In a joint announcement Wednesday, NBC and Warner Bros. Television, the production company of "ER," said they reached an agreement for NBC to continue to broadcast the top-rated show through the 2000-01 season.
NBC is estimated to be paying about $13 million per episode to Warner Bros. Television. Based on an average of 22 episodes a season, the deal works out to around $860 million - easily the highest price ever paid for a television show.
Warner Bros. Television is a division of Time Warner Entertainment Co., parent company of CNNfn.
Industry analysts said the "ER" deal is likely to boost programming costs for networks at a time when advertising growth is unclear.
"Probably this will raise the cost of programming across the board for all of the networks, and this is not a positive element for network profits if advertising growth flattens out, which it very well may over the course of three or four years," said analyst Harold Vogel of Cowen and Co. "In fact, it is almost a certainty that over that length of time you are going to have an economic slowdown."
One bright spot for NBC, said Vogel, is that the agreement covers three years, allowing the top-rated network to protect its Thursday night lineup until 2001.
NBC executives sounded a positive note in announcing the deal. "We are very excited to reach this agreement," said NBC's West Coast president, Don Ohlmeyer. "We value this partnership and look forward to an additional three years of riveting, dramatic television."
The departure of "Seinfeld" from NBC's blockbuster Thursday night lineup, say analysts, made it imperative for the network to hold onto the highly rated "ER" as an anchor program that evening.
"ER" premiered on NBC in September 1994 and quickly became the most popular series on television as part of NBC's Thursday offerings. It was created by best-selling author Michael Crichton, who based it on his own experiences as a medical student.
The program is watched by an average of 32 million viewers every week. The show's 1997 season debut was a live broadcast which pulled in 60 million viewers.
The "ER" renewal also helped to counteract some of the gloominess around NBC after losing its National Football League broadcast rights to CBS. On Tuesday, the rival network announced it would pay about $4 billion for American Football Conference telecasts which had been a mainstay at NBC.
NBC went after ABC's "Monday Night Football" but was rebuffed after ABC's parent, Walt Disney Co. (DIS), paid $9.2 billion for the program as well as for Sunday night games to be aired on its ESPN cable network.
NBC television network negotiators saw early in negotiations with the National Football League (NFL) that the bidding for rights to broadcast games starting next season was reaching "insane levels" that would cause enormous losses, NBC Sports President Dick Ebersol told reporters Wednesday.
Ebersol said on a telephone conference call that each rival network that won the rights would probably lose from $150 million to $200 million a year, assuming a strong U.S. economy.
"We had to make the decision here and we passed," said Ebersol. NBC, a unit of General Electric Co. (GE), has broadcast the American Football Conference (AFC) part of the NFL package for more than 30 years.
"We're all a part of General Electric and GE is an earnings-driven company," Ebersol said.
He added that in the eight years he has run the sports division of NBC, "there has never been an instance when we've been willing to get into something that offered intolerable risk, and to us an intolerable and reckless risk is taking on a rights obligation that will lose $150 million to $200 million in a good economy."
Ebersol said in talks eight days ago NBC was willing to go as high as $340 million a year for the AFC Sunday afternoon package and would not even come close to $400 million. Rival network CBS, a unit of CBS Corp., won the AFC package with a bid of $500 million a year.
Fox Television, a unit of News Corp. Ltd. retained the rights to the National Football Conference (NFC) Sunday package, and ABC Television, a unit of Walt Disney Co., retained the rights to a Monday night package of games. Ebersol said NBC was interested in the Monday games at around $500 million a year, but ABC won with its $550 million bid.
Ebersol said NBC has a full plate of other sports programming to air on weekends between January and August. Some of those sports continue in the Autumn, but to fill the place of Sunday football the network would have a movie package based on films already in its library, he said.
Football commentators such as former grid star Phil Simms are expected to leave NBC, but multi-event sports personalities and technical support people will remain, Ebersol said.
On Tuesday, CBS Sports President Sean McManus said the network would not lose money on its football deal.
--By Randy Schultz
|
|
|
|
|
|
NBC
ER
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
