As TV networks tighten belts, look for fewer stars, fewer risks

An early meeting was promising. Bergen is a bankable TV star, a five-time Emmy winner for the network’s own Murphy Brown and, more recently, a feisty fixture of ABC’s Boston Legal.

But when it came time to negotiate her salary, the two sides were worlds apart. In past years, the network and its studio supplier would have coughed up the dough to make the deal happen, and Bergen’s mere presence would increase the odds that Big D would secure a spot on CBS’ schedule.

Instead, CBS passed, the network confirmed. It instead cast Deanna Dunagan, a well-regarded but largely unknown Broadway actress, for a fraction of Bergen’s asking price.

That’s the math in the new Hollywood, where a combination of declining network ratings, sharply lower ad revenue and escalating production costs have forced cutbacks. The new austerity is being felt most keenly during the spring “development season,” when networks groom a new crop of shows they’ll consider for fall lineups.

Among the tactics:

• Reining in those star salaries — reduced by 10% to 50% from their previous paychecks — and hiring cheaper, unknown talent and fewer established big-name actors.

• Filming in relatively inexpensive locales such as Atlanta, Boston and Detroit, thanks partly to tax breaks for television productions. All of Fox’s drama pilots and many of NBC’s will be filmed in Canada, where the stronger U.S. dollar and lower labor costs save $500,000 an episode.

• Sharply reducing the layers of credited producers who collect paychecks but do little day-to-day work on series, and eliminating most penalty fees when sought-after projects don’t get made.

• Shooting many shows more cheaply by using digital video instead of 35-millimeter film, and emphasizing multicamera sitcoms with a studio audience (such as CBS’ Two and a Half Men) over film-style comedies (such as NBC’s The Office), which cost twice as much to produce.

“This is a moment in time when everyone recognizes we have to do things differently,” says Nancy Tellem, CBS Paramount Television Group chief.

She blames the situation on a “perfect storm” of last winter’s writers’ strike, the tanking economy and NBC’s decision to hand five hours of prime time to Jay Leno this fall by sharply reducing its drama slots.

Leno’s move, she says, “sent shudders through the entire community” as it increased networks’ leverage to cut costs. Even current series aren’t immune; some are being asked to cut budgets 10% next season.

Limiting ambitions

Back in the heady days of Friends, ER and Seinfeld— and even more recently with Heroes and Lost— huge sums were lavished on new dramas and comedies, in a business in which the vast majority of the new shows each year wind up failing. The prospect of a smash hit, however slim, was enough to warrant big investments by the major networks.

But increasingly, “it’s a business where the hits no longer pay for the losers,” says NBC Universal Television co-chairman Marc Graboff. “Revenues are lower, there’s fragmentation in ratings, and the costs are higher. Twenty-two hours a week of high-quality, high-cost programming is a very difficult challenge.”

That’s why it’s not happening anymore.

Cheaper reality and news shows fill slots that would otherwise go to sitcoms and dramas. Leno’s weeknight show will cost a fraction of a drama’s price tag while leaving less room on the TV schedule for another show to become a smash hit or eventually score a big payday from syndication.

Big stars such as Kelsey Grammer have taken pay cuts to keep working. And although Charlie Sheen (Two and a Half Men) and Laurence Fishburne (CSI) pull more than $350,000 an episode, second-tier players who routinely got $125,000 an episode not that long ago now are settling for about $80,000.

“What it’s forcing us to do is look at how to produce even more efficiently than we had in the past,” says CBS Paramount studio chief David Stapf. “We can’t just throw money at things.”

He adds that “the key is to do it in a way where viewers don’t notice.”

Last year, NBC raised eyebrows by scrapping pilots and picking new shows based on scripts, shaving millions in upfront production costs. But every new show it tried failed this season, and the fourth-place network is back making pilots again.

Even so, several networks are making fewer pilots, saving money but possibly reducing their chances of finding a hit from the right blend of script, cast and director — a recipe for successful shows that sometimes isn’t obvious on a paper script.

NBC scrapped plans to shoot one pilot — a period family show called Life in the ’80s— after spending more than $1 million because the show came too close to a remake of 1989 movie Parenthood that was also in the works. “Three or four years ago, we would have made both of them,” NBC Entertainment president Angela Bromstad says.

CBS and ABC are exceptions to the pared-down development trend. ABC has ordered 24 pilots, featuring TV stars such as Grammer, Friends‘ Courteney Cox, Everybody Loves Raymond‘s Patricia Heaton and Gilmore Girls‘ Lauren Graham.

Research and development “to me is the lifeblood of the business,” says ABC network and studio chief Steve McPherson. “It’s the process that has brought us all the shows that have been iconic over the years.”

But in this new climate, networks are taking fewer swings for the fences as a new conservative approach favors series about cops, lawyers and doctors over more ambitious serialized thrillers such as Lost.

“As pressure has mounted and the economy has worsened, in some cases there is a greater reluctance to take risks and chances in favor of tried-and-true franchises,” says Peter Roth, president of Warner Bros. TV, a major supplier unaffiliated with a top network.

“In some ways I understand it: It’s often a way to break through the clutter in marketing,” he says. “From the networks’ perspective, it’s thought to be a more sure-fire way to get a hit.”

Familiar themes

But hits are elusive even in good times, and that’s true now more than ever as network audiences drift to cable.

Typically, one in five pilots becomes a weekly series, and of those, perhaps one in five proves lasting.

There are still a few big bets:

• ABC is spending $7 million on Flash Forward, an ambitious series based on the sci-fi novel that it hopes is the next Lost. (Everyone blacks out for 2 minutes and 17 seconds and has a vision of the future.)

• Fox has Human Target, based on the DC Comics franchise.

• CBS has the 9/11-influenced Back, about a man missing for eight years, starring Jericho‘s Skeet Ulrich.

• And NBC has Day One, which follows the fallout of a “global catastrophe.”

More typical is the marketing-driven tendency — as in movies — to rely on tested franchises. Even though NBC’s Bionic Woman and Knight Rider bombed, remakes of previous hit shows remain a popular tactic.

ABC has Eastwick, based on the feature film version of John Updike’s The Witches of Eastwick, and V, based on NBC’s 1980s sci-fi series about reptilian aliens.

Fox, meanwhile, has a new take on Britain’s Absolutely Fabulous, about two outrageous women. NBC is mulling that do-over of Parenthood, and CW, which renewed its Beverly Hills, 90210 remake, is at work on a new version Melrose Place and a spinoff of Gossip Girl.

Fox will spin off The Cleveland Show from Family Guy. And CBS is weighing its own spinoff of NCIS.

A few proposed sitcoms have used the economic climate in their story lines.

ABC’s Canned centers on a group of friends who are fired on the same day, and another series stars Frasier‘s Grammer as a Wall Street big shot who loses his job and is “forced to reconnect” with his small-town family.

Meanwhile, Fox has Two Dollar Beer, about Detroit pals who are sons of laid-off autoworkers.

“We’re always looking at the zeitgeist and finding aspects we can reflect on TV,” McPherson says. “Comedy is a great way you can get a release. There’s less pain because you realize we’re all going through it and you can laugh at other people in the same circumstance.”

But all the big networks are seeking to reignite the family sitcom, hugely popular in the 1980s with The Cosby Show but largely absent since Everybody Loves Raymond called it quits in 2005.

Overall, there are fewer foreboding, convoluted dramas.

“Most of our pilots in general have a lighter tone. They’re a little more escapist conceptually,” says Fox entertainment chief Kevin Reilly. “The times can’t help but influence your choices.”

So can performance: The audience for NBC’s Heroes, which at $4 million an episode is one of TV’s priciest dramas, plunged 27% this season.

“We’re definitely trying to come away from dark, overserialized dramas,” Bromstad says.

Several proposed CBS series focus on aspirational “characters who have been through or are going through a period of transition in their life,” says CBS Entertainment president Nina Tassler, though it wasn’t planned that way.

Take The Good Wife‘s Julianna Margulies, who plays a lawyer returning to the work force when her disgraced politico husband, a fictional stand-in for former New York governor Eliot Spitzer, is sent to prison.

“They go through obstacles, they triumph and they succeed,” Tassler says.

That sounds like a happy ending the networks would love to script for themselves.