Unusual rights delay: hint of budget strife?

PBS’s ongoing negotiations to curb per-hour costs of producing programs and to assert more control over content are increasing friction with its largest producer, Boston’s powerhouse WGBH, according to sources at other stations with knowledge of the situation.

Rights for Downton Abbey were believed to be caught in a heated budget dispute. But the series aired to great effect.

For a period until just four days before the second-season premiere of the gem of this season’s PBS schedule, Downton Abbey from Masterpiece Classic, the approval of PBS broadcast rights for the series hung in the balance as WGBH protested the network’s contract demands.

With $202 million to spend on content in fiscal 2012, down from $207 million last year, and with flat revenue from station fees, PBS has been leaning on producers to lower costs (Current, May 16, 2011).

The network has been pushing for cost reductions for years; its available funds for licensing programs have hovered around $200 million for nearly a decade while production costs have continued rising with inflation. Earlier in the last decade, the PBS Board gave the network 3 percent to 5 percent annual increases in its National Program Service assessments to stations. But NPS fees have not changed in the past three years.

“The WGBH discussions are really at the center of so much of what we’re doing,” PBS President Paula Kerger told Current Jan. 5 at the Television Critics Association Winter Press Tour in Pasadena, Calif. Member stations “are expecting us to deliver a full schedule to them, but we haven’t had an increase in station dues in three years. And costs are not necessarily going down. So that’s why this is such an important time to try to figure this out.”

Both Jon Abbott, president of WGBH, and Michael Jones, PBS c.o.o., declined interview requests. Other sources, including a number of producers and executives at other stations, agreed to speak on the condition of anonymity because they are involved in contract negotiations of their own or soon will be.

PBS declined to discuss the negotiations, any disputed contract terms and WGBH’s unusually late approval of the Downton Abbey broadcast rights. In response to questions, the network released a statement from Jones: “As we have done on an ongoing basis for more than 40 years, PBS is currently negotiating with WGBH regarding new programming. Based on PBS’s and WGBH’s shared goal of serving member stations and the American public, we expect to bring these latest conversations to a successful conclusion.”

There’s more at stake than just production budgets. Producing stations, facing dwindling cash resources, attempt to pad their production budgets to cover growing overhead costs and capital to develop future programs. Sources say that cushion can amount to as much as 30 percent. “Those dollars sustain the station, support its infrastructure,” one station exec said.

As the talks continued during the past few weeks — multiple sources termed them “acrimonious” — station programmers noticed that PBS had not yet announced Season 2 broadcast rights for Downton Abbey. The delay was unusual for two reasons, they say: because the British import’s second season has been so highly anticipated, and because PBS had been able to announce Season 1 broadcast rights — six plays over four years —when the original program offer was announced last year.

As late as the afternoon of Jan. 4, just days before the Jan. 8 season premiere, both WGBH and PBS were telling programmers that broadcast rights had not yet been finalized. On Jan. 5, a station spokesperson told Current that Abbott had said, “At this time, negotiations continue.” Yet that same day, PBS program chief John Wilson, speaking to a Current reporter at the Television Critics Association Press Tour, said “there’s no ongoing discussion” regarding the rights.

Just before noon Jan. 6, PBS announced to stations that rights were in place and the program offer was being updated. Programmers say the broadcast rights are the same as in Season 1.

No contract? No bucks

Neither PBS nor WGBH would discuss specific disputed provisions in their production contract, but executives from other major producers said many series producers are unhappy with a related belt-tightening move by PBS, beginning in 2011, that halted PBS payments until production contracts are signed.

In the past PBS has generally provided pre-contract production money to trusted producers or for time-sensitive programming. Some shows routinely made it to air before a contract had been finalized, according to multiple sources.

In response to Current’s questions, PBS confirmed that its policy “is to have agreed-upon terms in connection with a program before we begin payment.” But network execs declined to say when or why it stopped releasing pre-contract payments. Jones noted in a statement that the network has “a fiduciary obligation to ensure that the funds entrusted to PBS for the creation of content are invested effectively with clear, mutually agreed upon terms.”

The statement added: “To support producers’ long-term planning, we continue to engage in multi-year agreements where appropriate. The practice of having a contract that outlines clear terms in place before payments begin is a responsible management procedure that benefits the system as a whole.”

Producers speculated that the end of pre-contract payments reduces PBS’s financial risk and lets PBS earn interest on its cash while awaiting completion of contract deals, which can take months.

For producers, however, doing without the advance money is “not viable,” said one, especially when undertaking series that will take years to complete. “Producers who had in the past been able to get advances when needed for shows that were accepted in principle can no longer get them,” the station source said. “TV just can’t work this way.”

“It’s pretty precarious right now,” said another producer, especially for series with ongoing, and sometimes increasing, costs. Base expenses such as salaries keep going up. And PBS also is asking producers to do more with their content: educational clips for schools, websites, mobile phone apps and promotion.

“A proactive approach”

Several sources said WGBH is chafing over what the Bostonians perceive as PBS intrusion into their editorial decision-making.

Wilson is now teamed with two high-ranking production vice presidents who have extensive experience with independent producers in cable television as well as earlier experience at PBS: Donald Thoms, who worked as a program buyer, producer and programmer for Discovery Communications’ cable channels after leaving the PBS programming department in 1999; and Beth Hoppe, a former top WNET program exec, WGBH producer and director and independent documentary producer who also spent two years at Discovery.

PBS said in an August news release announcing their hires that Thoms and Hoppe would be “working in collaboration with producers” and would “take a proactive approach to program development from idea generation to air.”

“We are working much closer with our producers on building up our schedule,” Kerger told Current. “And I think, with fewer dollars and more pressure on the dollars that we have, we’ve pushed our producers very hard.”

PBS “wants more input into what kinds of things would be successful on the network,” said an exec at a station that airs national programs but doesn’t produce many.

The network has research that shows what audiences like, particularly since 2009 when it acquired access to more detailed Nielsen survey data on program audiences. “So PBS is saying to producers, we’re going to be more collaborative in helping you choose topics to decide to cover as a co-production or an acquisition. It’s simply being more mindful of content,” the source said.

Some PBS production contracts have moved ahead amicably, such as Market Wars, the forthcoming reality-TV spinoff from WGBH’s Antiques Roadshow producer Marsha Bemko. “When we came to WGBH for a series to pair up with Antiques Roadshow, we really challenged them on unit costs,” Wilson told Current at the press tour. “We said, ‘Here’s what we can afford,’ and they rose to the challenge.”

“I think it’s in our collective interest as a system,” Kerger added, “for the producers and PBS to be working very closely together to try to make sure that we are producing as efficiently and effectively as we can. And for our producing partners, it’s obviously in their interest because they’re on the hook to raise the rest of the money. So it’s in our mutual interest to negotiate the best possible deals for what we have.”

If PBS can reduce the cost of its ongoing signature series, it will have more money for starting or upgrading new projects.

Major producing stations — WGBH, WNET and WETA — have long been perceived within the system as having high per-hour production costs, but their staple series also aim to meet high standards, angling to deliver a definitive 60-minute video account on a subject, by acquiring rights to expensive archival film footage and spending on other elements that distinguish PBS programs.

To maintain a strong bargaining position, PBS does not reveal contract prices, Jones said in a statement. One icon-series producer estimates that a documentary for a major PBS series usually runs between $300,000 and $600,000 per hour. Compare that to, say, the cost of a typical reality-TV show on commercial television, which might run between $150,000 and $175,000 per hour.

PBS acquires limited broadcast rights for its affiliated stations and typically owns few programs outright. The network contributes substantial amounts to major NPS series but little or nothing to many other programs, for which the producers or presenting stations must find grants from foundations or federal agencies. Producers of those programs generally have not involved PBS in the creative process, nor have they felt the need or desire to do so.

PBS owns full rights to History Detectives, the popular show co-produced by Oregon Public Broadcasting and Lion Television.

“We’ve always had a strong editorial collaboration with PBS,” said Dave Davis, v.p. of TV production at OPB, “and we get their editorial input on a regular basis at all stages of production.”

That continued as History Detectives planned its 10th season.

Davis said his staff and Lion Television agreed the series “needed some freshening up.” He added, “Obviously, our goal is to increase viewership and bring ratings up.” After the show’s producers talked with Wilson and Hoppe last fall and drew on PBS’s minute-by-minute Nielsen data, they came away with recommendations and ideas.

“It’s not a drastic change, but the format of the investigation is changing a bit, as well as the camera style,” Davis said. “It will be a bit faster-paced, more contemporary-looking.” The detectives will be more prominent as personalities and more spontaneous on camera.

“We’re testing out ideas and continuing to fine-tune,” Davis said. “I think the results will be good. I’m optimistic it will be a better program.”

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