The near elimination of the financial interest and syndication rules has set off the expected combination of fear and outrage within the Hollywood production community, though some were at least expressing hope the networks will live up to past pledges of kinder, less-predatory practices.
The decision also prompted attacks on Washington, with Disney Studios president Richard Frank lashing out at the Clinton administration, saying he finds it "interesting that a supposed friend of Hollywood who wants to regulate everything from airlines to health care would eliminate a rule that has been in place for 20 years."
Producer Leonard Hill, a partner in the distribution entity ACI, said the ruling is "totally out of step" with the new administration and that the onus is now on the networks to prove their over-the-fin-syn-bargaining table rhetoric about wanting to foster diversity and promote independent companies was sincere.
A key issue, in the eyes of Hollywood, is whether the networks will now engage in the practices that brought about the original consent decrees -- namely, extracting rights from suppliers as a condition of access to the schedule.
"I'm a very nervous chicken right now," Hill said. "I have seen what's happened when the fox got in the henhouse before."
More practically, Jerry Isenberg, president of Hearst Entertainment Prods. and chairman of the Caucus for Producers, Writers and Directors, delineated the two fundamental subdivisions of the decision: the series business, where independents have been squeezed out of competition almost entirely already, leaving webs and the studios to duke it out; and the TV movie business, where the ruling is "terrible," he said, and could do real damage to entrepreneurs.
In short, there will still be demand for producers to make programs, though their long-term prospects for owning shows isn't encouraging.
Breaking down the ruling, here are some of the issues:
SERIES
The biggest limiting factor here, beyond the rules, remains economics: Based on the high failure rate of new series, how much do the networks want to gamble in terms of supplying their own lineups?
"The wonderful thing about all this is that it puts all the deficits in their (the networks) hands," said one studio source. "They can choke on the deficits just like the studios have. If they want to own it, they can take the risk and swallow the red ink."
Diminished power
Observers also suggest that one unexpected fallout of the changes could actually be diminished power for the networks' in-house production arms, since the networks will be able to pick and choose partnering in outside projects without the risk and overhead of operating their own production entities.
CapCities/ABC has made a real commitment to establish ABC Prods. as an independent production company, and Hill said it's now incumbent on all the networks to run those units at arm's length and "show they are not preferred and do not have special access."
As for the question of risk, ABC is shooting nine pilots this year (three for Fox Broadcasting Co.) and CBS Entertainment Prods. has a role in eight pilots. NBC will produce another five but has already endured the downside of expanded in-house production this season, canceling the NBC Prods. sitcoms "Here and Now" and "Out All Night."
Network sources have indicated that there is an upward limit, based on costs, to how much of their own schedules they would want to supply. So far, the biggest increase in hours from the networks have come through their respective news divisions, with ABC recently adding a third news magazine, NBC to schedule a second hour in June and CBS to expand to four hours this summer with a news hour hosted by Connie Chung. Such programs are relatively inexpensive to produce and also help amortize costs from the news operations.
Hearst, one of the larger independents, has already felt compelled to ally itself with networks in producing prime time series, teaming with CBS on a summer series and a pilot for next season. Other midsized indies, such as Reeves Entertainment and Viacom, have allied with either networks or studios to support their involvement in the series area.
Studios and indies like Stephen J. Cannell Prods., meanwhile, already have taken preemptive steps to hedge their bets in this area with the creation of ad-hoc networks, including Warner Bros.' Prime Time Entertainment Network, Paramount's "Star Trek" and "The Untouchables" first-run hours, MCA's announcement ofan original movie network and the Cannell hours "Renegade" and "Street Justice." More first-run action fare is also anticipated from Columbia Pictures TV.
"They are establishing a beachhead so they won't be dependent on the networks for (exhibition)," said Ken Kaufman, a partner in independent telefilmery Patchett Kaufman Entertainment.
SCHEDULING
This remains the most nebulous and disturbing aspect of the decision in the eyes of many suppliers, with the assumption that the networks will provide series they have an interest in better time periods. "Anyone who figures a network isn't going to do that hasn't been paying attention," one producer said.
On the series side, some independent producers see allying themselves with a network as a means to "level the playing field," as Hearst's Isenberg put it, vs. the major studios, who owe their scheduling clout to established hits (witness Paramount's hold on NBC the last several seasons thanks to "Cheers"), the volume of shows they may provide (Lorimar's eight series on ABC) or relationships with A-level talent.
"The filmed series business is by and large so fraught with risk, so questionable, that to attempt to do it without the partnership of the exhibitor (i.e. the network) puts us at a huge disadvantage" vis-a-vis the studios, Isenberg said.
Independents squeezed
Independents, in fact, already have been virtually squeezed out of the series business. Of 125 reported pilots ordered as candidates for next season, more than 80 are under the auspices of the major studios (including Fox) and 22 are produced at least in part by one of the networks. Shows provided by indies largely fall into the category of relatively inexpensive reality series.
"There is no room for the small independents in the series business," Isenberg said.
Network officials maintain partnerships with networks will allow midsized companies to continue to play in the series arena -- hence promoting diversity -- though the tradeoff will be at least a portion of back-end rights.
Independent producers note that there will still be plenty of opportunities to produce, but perhaps scant chance of remaining independent. "Individuals will still work," one producer said, adding that he didn't see a major difference from that perspective between drawing checks from the networks or the studios. "Where (the rules change) comes out is if you're trying to build any form of a company."
Hill, however, said producers content to give up ownership are those "who like that comfortable Soviet security of salary."
TV MOVIES
This is the area, according to most observers, where the independent producer -- or, more accurately, the small entrepreneur -- will be hurt, depending on how aggressive the networks decide to be.
While movies and miniseries don't offer the big homerun associated with a hit series, they can be modest moneymakers overseas and long-term library assets. "They (the networks) will eat into our numbers, no doubt," Kaufman said, noting that the real opportunity for TV movies beyond their network run is overseas, not in domestic syndication, where the webs are still constrained.
As Hill pointed out, TV movies also come from a diverse roster of suppliers, including the indie producers who make up ACI, formed specifically to exploit their product abroad as well as domestically.
It bears noting that studios with interests in cable webs traditionally supply the vast majority of their own product. MCA and Paramount, for example, produce most movies for the USA network, and Turner Broadcasting takes an ownership stake in all original movies made for TNT.
MISCELLANEOUS FACTORS
Another area of particular concern in the revised rules includes the elimination of provisions against favoritism, which would have prevented a network from steering a hit show to its own stations or affiliates.
'Simpsons' sale
An illustration of that would be the recent sale by Twentieth TV -- the syndication and production arm of Fox Inc. -- of "The Simpsons," the top-rated series on Fox Broadcasting Co., to the seven Fox owned-and-operated TV stations.
"What the government has done here is sort of make a network OPEC," said Disney's Frank. "Now there are four guys able to set prices as buyers and sellers." Frank did see one bit of positive light in the FCC's move to reduce the fin-syn regs, saying there is "no doubt" it will now have to address the Primetime Access Rule (prohibiting network affils in top-50 TV markets from airing off-net fare in access). Disney has lobbied vigorously for the elimination of the PTAR rule.
Hill also turned to current headlines to find some room for hope in the 20 -year-old battle. "The Cold War is over," he said. "Maybe the Berlin Wall can come down with fin-syn."
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