Warners and the $150 million deal
Warner Bros. worldwide TV distribution president Jeffrey Schlesinger is in town this week meeting with the top brass at the free-to-air networks and Foxtel.
At stake is the future of the studio’s output deal with the Nine Network, which is worth a reported $150 million a year.
Nine CEO David Gyngell and Schlesinger are close friends. However Gyngell has flagged he wants to reduce the fees it pays the studio, particularly given the need to boost Nine Entertainment Co's bottom line to support the share price.
Currently the deal, which expires next year, gives Nine just one prime-time hit, The Big Bang Theory, plus a lot of series which air on digital network Gem and movies whose value to FTA broadcasters has slumped in recent years.
Gyngell has consistently spoken of Nine’s increasing commitments to local production, given the vast majority of the top 50 rating shows in Australia are home grown.
“Most US shows don’t work. If you look at pilot season, from an original idea through to second season, only 5-10% make it,” Gyngell told this reporter late last year.
“We’re committed to local production. Our major investment is in the big franchises, Australian dramas, news, current affairs and sport."
One Australian broadcaster describes Schlesinger’s visit as “testing the waters” as he meets with the FTA networks and Foxtel. Warner Bros. does not attend the MIP market in Cannes in April so the next opportunity for the studio’s executives to talk to the Oz broadcasters will be at the LA Screenings in May/June.
Nine occasionally on-sells WB shows to Foxtel, most recently sci-fi series The Tomorrow People which launches on Fox 8 on April 3.
Under one possible scenario, Nine could agree to a modified deal where it slashes the number of series it takes and WB could place other shows with Foxtel.
If Nine doesn’t renew, WB’s options may be limited. The Seven Network has an output deal with the Walt Disney Co. and a strategic partnership with Sony. Struggling Network Ten has output deals with 21st Century Fox and CBSParamount.