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TV Note: TV writers, producers face lighter paychecks

Wednesday, January 02, 2002

By Corie Brown, Los Angeles Times

As sob stories go, Tim O'Donnell's saga is no tear-jerker. For starters, he's rich -- big-house-BMW-private-schools rich. His tale of woe is that he faces being, well, less rich.

O'Donnell is a television writer-producer.

Although movies grab the spotlight, everyone in Hollywood knows that television mints the most millionaires -- and much richer ones at that. James Cameron created "Titanic," one of the biggest movies of all time, but Larry David, one of the creators of "Seinfeld," is far wealthier.

For the past decade, the television business has boomed. Spurred by an expansion in the number of television networks and increased demand for programming, the price for creative talent soared.

"You could surf whatever wave that [came] along," said Bill Grundfest, one of the original "Mad About You" writers, noting that even shows with middling ratings were passing for hits. "And then they backed the truck of money up to your house."

The everyone-gets-rich part of the equation, however, is starting to change.

The broadcast networks, caught between escalating prices and plummeting advertising revenues, are cutting costs, as much as hundreds of millions of dollars a year. And the bacon in the business is the writer-producer.

"Fewer scripts have sold this season; fewer pilots will be made. Staffs are shrinking," said Peter Benedek, a partner in United Talent Agency. "The notion that the entertainment industry is recession-proof is finished."

Programming costs have risen 20 percent in the past three years. Hourlong dramas, on average, now can cost $2 million to produce, and half-hour sitcoms can cost $1 million per show.

"The process is bankrupt," said Robert Iger, president of ABC's parent, Walt Disney Co. "We've been lemmings to the sea" with expensive writer-producer deals that didn't result in hit shows.

The halcyon days are likely to continue for writer-producers such as David E. Kelley and Dick Wolf, whose hit shows "Ally McBeal" and "Law & Order," respectively, have elevated them to the Pantheon of the profession.

But virtually everyone else can expect to get squeezed, according to several dozen talent agents, entertainment lawyers and studio and network executives.

The livelihoods of thousands of writers are likely to be hit hard. Their lawyers, agents and the rest of the entourage that surrounds even the modestly rich of Hollywood will see their income drop as well.

"Everyone will be affected," said Peter Roth, president of Warner Bros. Television. "We cannot have costs continue to spiral upward."

"With or without [Sept. 11], the economic trends were going to have to be reversed," said Dana Walden, president of 20th Century Fox Television.

The television industry operates on a firm schedule. Writer-producers pitch their series ideas to the networks during the summer and early fall. The networks decide which pitches they will buy. The writers then turn those ideas into scripts. By January, the networks will decide which scripts are good enough to be produced as pilots. In May, the networks announce which pilots will become television series. About 1 percent of the ideas pitched to the networks become series.

At each point along the development track, writers are paid fees that can range from tens of thousands of dollars to millions, depending on the writer's track record. Every aspect of a writer's payment is subject to negotiation, according to agents.

To reduce the demand for sitcoms and dramas, the networks are filling their schedules with game shows and unscripted series, as well as replaying first-run series on cable networks. The practice, called repurposing, means one series can fill the time of two or three series.

"Producers of top shows who ... made $750,000 a year and were in line to move up to the $2 million to $3 million overall development deal, are going back to working for an episodic fee -- $17,500 to $50,000," Fox's Walden said. "They're getting paid for a script, and only if it sells."

Television writer O'Donnell expects to feel the pain. "People are going to hear my last quote [what a writer is paid for one script] was $65,000 an episode and that my next quote will be $40,000, and they're not going to feel sorry for me," said O'Donnell, who started out writing for the hit show "Growing Pains" and has since written for "Dave's World" and "Clueless," among other shows.

One clear indication of long-term belt-tightening is the reduced number of overall deals for writers. To lock up the future work of someone deemed talented enough to create a successful show, a studio will put the writer under contract. The greater the competition for the writer, the richer the contract.

Warner Bros. Television signed one of the last big overall deals last year with "Dharma & Greg" creator Chuck Lorre for $7 million a year for five years.

There are about 250 writers with studio deals today, many paying the writers more than $1 million a year. That's down 26 percent from last year's 340 deals. That number is expected to take another fall next year.

Sony Pictures Entertainment, with several dozen television writers under contracts estimated to be worth $75 million, is pulling out of the business of making network shows. The studio determined television to be a hopelessly unprofitable business for many years to come.

Earlier this year, Michael Ovitz's Artists Television Group closed its doors, leaving more than a dozen high-priced writers such as "Sex and the City" creator Darren Star and "Friends" producer Adam Chase scrambling for new deals. Those who landed at other studios agreed to work for less money.

Fox TV recently demanded a 2 percent across-the-board cut in all of its shows in production, including "Ally McBeal" and "Malcolm in the Middle." That follows a 10 percent cut in all development budgets this summer.

Warner Bros. TV has asked the producers of its current shows, including "Friends" and "West Wing," to trim costs wherever possible.

Overall, the major broadcast networks bought 27 percent fewer scripts this year, the first step in the new-show development process, indicating they will be making fewer pilots and buying fewer new shows.

"Everyone will get a little less," said John Wells, creator of "ER" and "West Wing" and former president of the Writers Guild of America West. "This is not an unusual cycle, but it may be longer, more pronounced. That's what everyone is worried about."

"All the people making television programming love the business and make a lot of money at it," said Sony Corp. of America Chairman Howard Stringer. "But if the owners [of the studios] aren't making money, the clash was inevitable."

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