(FORTUNE Magazine) – The business of content -- copyrighted material such as movies and TV shows -- has always been a game of musical chairs. The latest scramble began in November when Capital Cities/ABC created a $200 million television production alliance with director Steven Spielberg, ousted Disney studio chief Jeffrey Katzenberg, and records billionaire David Geffen. Known as the "dream team," these superstars of content creation plan to develop an independent entertainment powerhouse in TV, film, music, games, and more. The Cap Cities venture -- achieved without billions of dollars of debt and useless goodwill -- is limited to TV, the most strategically important and potentially lucrative content business of all. Expect a frenzy of network/studio pairings to follow as eager players grab for a limited number of chairs. Says Katzenberg: "There's going to be a complete shifting of the landscape." That's because combining production and distribution of TV shows improves the odds in a risky business. The lapse of federal rules limiting network ownership of programming, scheduled for late 1995, is transforming the economics of TV. Hollywood studios will be able to get more shows on the air by aligning with a network. The networks, in turn, can benefit from ownership of shows. Disney's revenues from its Home Improvement sitcom, currently running on ABC, are estimated at $500 million, with most of that going directly to the bottom line.

There aren't enough chairs for everybody in this network/studio combo game. ABC now has its partner, and the Fox network is sister to Twentieth Century Fox. CBS and General Electric's NBC remain unallied. On the studio side, both Time Warner (parent of FORTUNE's publisher) and Viacom, which owns Paramount, are launching TV networks in January; nevertheless, both have considered deals with existing networks. Federal rules barring non-U.S. entities from controlling an American TV network hobble MCA, owned by Matsushita, and Sony Pictures -- but only so long as they remain in Japanese hands. Ted Turner would love to buy a network, but he can't unless Time Warner and Tele- Communications Inc., which own big stakes in his company, give him permission. Finally, there's Disney, reeling from a streak of bad luck, which needs a network most of all. Stay tuned.