Thursday, January 14, 2021

One of the many benefits of media consolidation

Ken Levine (MASH, Cheers, Simpsons, you name it) has a non-covid explanation for Warners decision to simultaneously streaming all of its theatrical on the under-performing HBO-Max. It all comes down to the great foundational principle of Hollywood accounting, self-dealing.

Let’s go back to the ‘80s and that now quaint form of entertainment -- television.   If you had a hit sitcom the studio would sell it into syndication to the highest bidders.  If you happened to be a writer or actor or director who had a piece of the show you got insanely rich.  The studios would get richer, but that’s fair.  They also laid out all the money above the license fee to produce the show.  And lots of shows fail and the studios lose money.  But still, in success, everybody scored big.  

Then the studios started launching cable networks.  And of course they needed product.  Let’s take MASH — an absolute cash cow in syndication.  Owned by 20th Century Fox.  The studio debuted FX.  The studio decided to run multiple episodes of MASH.  Its value in syndication dropped because no longer were local markets the exclusive provider of the show.  20th made less money on MASH.  But they made more money on FX.  They sold and kept all the advertising.  Anyone who was a profit participant in MASH got screwed.   As a result, Alan Alda sued 20th and won a hefty settlement.   

The point is 20th was more concerned with their cable channel than one of their shows.   This type of thing happens when giant conglomerates take over studios.  

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