Mel's Diner: Blue Skies Over Debmar-Mercury

THE DISH: While the rest of the country endures another day in the Polar Vortex, it’s February, sunny and 80 at the Ivy at the Shore, a short walk from media company Debmar- Mercury’s Santa Monica offices.

It’s a fitting weather report for lunch with copresidents Mort Marcus and Ira Bernstein, who are having an undeniable moment in the sun, zigging, as they say, while the industry zags.

Last month the duo came away from NATPE having cleared much-buzzed-about upcoming game show Celebrity Name Game, hosted by Craig Ferguson, in more than 90% of the country.

This month, The Wendy Williams Show, which the company produces and distributes, has been hitting record ratings and demo highs for weeks. Meanwhile, decades-old Family Feud—which like CNG, FremantleMedia North America produces and Debmar-Mercury distributes—has been revitalized with Steve Harvey as host and improved time periods. Feud just crossed the 6.0 national household rating mark for the first time since such figures have been measured—and then continued beating its records. Bernstein, who in the 1980s was executive VP/director of ad sales for then Family Feud distributor LBS Communications, notes he’s been selling Feud for 30 years in some form.

Then there’s the revolutionary 10-90 sitcom model Marcus and Bernstein created, which continues exuding heat. Much of their focus the week of our lunch is on their next test, the George Lopez vehicle Saint George, set to premiere on FX March 6. Their comedy with Kelsey Grammer and Martin Lawrence, Braddock vs. Jackson, is next (likely premiering this summer on FX), and they already have interest in their Kevin James-led project before they’ve set a writer or a concept.

As the duo sits in the tropically-appointed restaurant on Ocean Avenue, one thing is as clear as the California sky: They don’t intend to take a second of this sunny day for granted. Over salads, Marcus and Bernstein discuss why things are clicking, why they’d be happy if more competitors copied some of their business approaches and more. Edited highlights of the conversation follow.

Congratulations on the success of Family Feud. For a show that’s been on for that long to have record ratings now is just, wow. To what do you attribute this latein- life success?

Marcus: Steve Harvey probably deserves the most credit. Bernstein: It’s the right format with the right host at the right time.

Marcus: Maybe it’s just me, but I think it’s just really funny. And the hosts that went before didn’t have that ability to capture the moment like Steve does. Fremantle has set it up so that it’s more like a sitcom.…One area it’s the right time is that there aren’t as many off-net sitcoms to fill the slots from 5-8. So Family Feud acts like a sitcom for those independent stations. So they’re more willing to put it there. And maybe with a sitcom, so that will allow it to sort of find its breadth.

What can you apply from this success to other areas of your business?

Marcus: That’s how we found Celebrity Name Game. We said, another show that acts on humor that could play with Family Feud or in five-day time periods where comedies play. Look, the reason we have the 10-90 sitcom model is because there weren’t enough sitcoms being made to fulfill the appetite of the cable networks and broadcast stations.

Let’s talk about tests.

Marcus: We’ve had this conversation a bunch, but when you think about every single network, including cable networks, every single order they make is a test. Because there’s an option to make more. And if they don’t like it, they cancel it. Yet in syndication, for some reason, off of a four-minute tape, the studios—and the stations—will commit to two- or three-year deals. And then wake up a month later and go, ‘Why did I do that?’ And then they do it again! And we’ve been trying to stop it. We think it’s wrong. We don’t think it’s healthy. And we don’t want the business to operate that way.

We think that there should be new shows when a show fails. And a show should come on and a new show should take its place. And keep trying until you get a hit.

Was the idea of testing what you thought you should be doing from the beginning with this company, when you guys got together?

Bernstein: It really, really started because of Tyler Perry. Because he wanted to do a show that creatively he 100% controlled. We said, we’re basically a business of 50-year-old white guys judging and most times we’re wrong. So how can we get an African-American sitcom on the air without all of us—including us—judging it? And that’s when we came up together with Tyler and us and Mark Itkin at WME with 10-90. And [Turner Entertainment Networks president] Steve Koonin gets a lot of credit for this too. We said, ‘What if we just did 10?’ And if the 10 worked, we make 90 more. It will print money. And so that’s what we decided to do. And the success of that sort of changed our thinking forever.

Once you started thinking about that, two years later, we’re looking at this crazy, outlandish, in-your-face personality on radio [Wendy Williams]. And looking at ourselves, saying, you know, most people that try to go to TV from radio fail miserably. This is a real talk show. This is a $20 million-plus venture. We can’t miss by 10. This was also early days. We went to Fox [TV Stations]…I said, ‘This is a little out of the box, but what if you just put it on in the summer? We’ll share it with you. We’ll split the costs.’ And that’s how it started. Marcus: And now, of course, Fox does tests all the time. And not just with us.

So for the business—and for your business— is that a good thing to see more tests overall?

Marcus: Yes, because if the studios just did pilots and made you buy a two-year show, there’d be no room for new shows....Every group should be doing tests. And they should be doing two or three a year until you find a show that works. Because it’s a one-in-ten business. And if you do it without it, it will take you three or four years to find a show.

How many 10-90s can you do at one time?

Marcus: I don’t think you’re ever in a position where you have too many.…History shows us that most shows fail.…So you go in and try to get the best you can and oh my god, if you’re lucky and they all work, that’s a problem we’d like to figure out.

Why do you think nobody else is doing the 10-90?

Bernstein: We go after really big talent and we give away very significant equity. And that’s really, I think, one of the main issues that the studios have.…If they give client X 25% of a show, and the most they’ve ever given away is 8%, they’ve got a big problem with 12 other artists that they have. We’re not saying our way is perfect, it’s not. It has a lot of issues. But their way isn’t either, so why not try different things? Do you have the next 10-90 or daytime tests in mind?

Do you have the next model?

Marcus: The next model? No. In syndication, you’re working on different kinds of testing deals with different station groups now. So we might do more testing with other groups that you wouldn’t think of today. In all of these cases, they’re evolving.

Even with our 10-90, it’s still evolving creatively.… Because we want to find a way to produce one that’s like, oh my god, it’s The Big Bang Theory. We want to get one that’s that funny. We’re not trying to do cheap and get nothing. We want to be hysterically funny. And so we’re working on that. It’s evolving. We’re eight attempts in. The traditional model’s 60 years in. We’re eight attempts in. I mean, although ironically, we’re closer to the way it used to be. The Honeymooners did 39 in one year.

What’s in your water right now? Why are your shows growing?

Marcus: In the case of Family Feud, it has a lot to do with more and more stations are upgrading it into the 5-8 time period. More and more stations are taking two runs instead of one run and so you put it all together.

Bernstein: And it’s word of mouth. There was one, ‘What goes with pork?’ This went viral. It was on YouTube. ‘What goes with pork?’ And one answer was belly, and one answer was something else, and the third answer came in and the person said, ‘Upine.’ And Steve Harvey laughed for about five minutes without responding. It went viral. That was a Family Feud moment.

Marcus: He’s like, ‘Upine? Upine? I’ll give you all my money if Upine is up there!’ Steve Harvey just milked it. It was really funny.

Bernstein: Is it scripted? Yes, someone scripted that question. He didn’t script the answer. He just said it.

Marcus: And he’s really good at it. That’s happening and the upgrades and people are hearing about it. Wendy is a little bit of the same, in that we’re getting some more stations to run it in better time periods. Not as much as Feud.

Bernstein: We’re not getting extra double runs and all that stuff. It was so underperforming outside—Wendy has been, since day one, fantastic in 18 markets. Now it’s really good in 45 markets. We actually still have a ways to go.

Marcus: I think early on, Wendy was way better than the show we were producing. She was way better than the show. Her talent was past it. And now the show is catching up, although she is still better than the show. The show is catching up so that now we watch it, it’s a better experience in general. Because the show, it’s produced better. Between the fact that she’s really good and the show is catching up, it is a better experience....The show has done a little better at figuring out how to use her, make her shine more.

Bernstein: She really is relatable, even three weeks ago she broke down crying. And this went viral, she was showing a pic of Madonna and her son. And she was talking about, isn’t that nice? Here’s this celebrity and she’s still close to her son. And then she just lost it. She started crying on-air. Because she was thinking about her relationship with her son. And her son is a teenager now and not as close as she’d like to be. And you know what? There’s million and millions of women that feel the exact same way. She’s not up here saying, you people do this. She’s saying, ‘I’m you. We’re doing the same s---. I’m just on TV today.’ And that you can’t teach. That’s just her. And we hopefully caught up a bit and are able to showcase that better than we were four years ago.

Marcus: Two days later she was on The View talking about it. So Wendy has been great. Wendy has been really great for us and we’re hoping Celebrity Name Game does reasonably well.

What are you looking for next? What kind of things are out there?

Marcus: Again, we try to zag a little bit. If we knew what it was, we couldn’t tell you! We just try to look at things differently than everyone else. We don’t want to be the fourth bidder for the same name. Try to find a way, a different angle.

I do want to ask about some of the bigger picture things going on right now.

Bernstein: I can’t believe John Malone got outbid.

Marcus: Comcast?

Yes, Comcast buying Time Warner Cable.

Bernstein: In the words of Alec Baldwin on 30 Rock, Kabletown is going to rule the world.

Marcus: Brian Roberts was on Morning Joe discussing why it’s good—‘there’s not one city where we’re the same, so we’re not affecting any competition.’ And my head kept saying, but what if I’m the Fox station, or worse, a small station, and I need to get retransmission from you and you now cover eight of my markets instead of just two of my markets? Can’t you just kill me and step on me like a little bug? And I wasn’t sure the answer to that. I would have asked him that question if I was there.

They’ll be about half of the entire cable industry; 30% of the pay-television pie. So they’ll have 32 million homes out of, call it 100 million. Those 100, there’s whatever—DirecTV, Dish, AT&T, Verizon. And what they’re going to say to the FCC is, ‘We’re only 30%.’ It’s like stations can be in 35%—we’re just 30%. We’re fighting against the Internet and DirecTV and Dish.

But 50% of cable, you’re saying.

Marcus: I’m saying they’re going to be 50% of cable, but they’re going to be 30% of homes that get multichannel into their house. That’s their position.

Bernstein: And is that a fair perception? Because you can choose to get DirecTV if the big conglomerate guy is screwing you, you can get Direct. So you have recourse.…I think it does change the dynamics for broadcast....I don’t know how it doesn’t give them more leverage on broadcast TV.

And then it obviously trickles down to your business.

Bernstein: We want the stations to be healthy. They’ll say, ‘We happen to own NBC. Broadcast stations, we want to be healthy too.’

To that point, one of the things that’s happening is NBC stations now are saying they’re doing their version of Watch ABC, the all-day streaming apps. So how much impact do you see those streaming efforts having? As far as syndication—

Bernstein: There’s two different things. In daytime, for first-run syndication, it hasn’t really been a big factor because by its nature, whether it’s Wendy Williams or Ellen or any show in daytime that people watch every day, if you don’t watch it one day, you watch it the next. They’re not DVRing it and downloading it and all that stuff. Other than people in perhaps access and certainly in primetime or late night, time shifting is something—it doesn’t really affect syndication.

Marcus: From 9 to 8 o’clock at night, for the most part, stations run things that run five days a week. So almost by definition, it’s not appointment TV. You might have your favorite show, maybe it’s Wendy or Ellen or whatever it might be. But if a housewife is home and she watches Ellen, she knows it’s on at 4 o’clock and she happens to watch Ellen. But she’s not home every day at 4 o’clock because she has things to do. While she might record it, you didn’t miss much.

You’re going to see it online if there was something really funny.

Marcus: That’s right! And it’s on every day, so it’s not like, oh my god they’re only making 13 episodes and oh my god, I cannot miss it. We’re making, like, 240 shows. Its shelf life is really short. So the good news about 9 a.m., where most of the syndication is, it’s not affected by the DVR. In primetime they may be getting 70%, 80%, 100% boost in viewership from the DVR. We get 3%, 4%. Small amounts. So that’s good news. However, there are so many shows that people record that they may choose to watch one of them between 9 a.m. and 8 o’clock. So then it’s affecting the ratings.

Bernstein: Where [streaming rights issues] does come into play, and it’s a point of contention more and more as we go forward, is in the sitcoms. Because everybody wants all the rights all the time. And the moment you give them, it’s worth less downstream.…In general, these apps, like HBOGo, they decided to fuel that and not sell it to Netflix. The cable networks are trying to do what NBC or ABC or FX is doing—they’re all doing the same thing, which is to create their own app. Once they do that, what’s the next thing they want? All the episodes. Well then they start becoming the syndicator, so to speak.

So with the 10-90 deals, you guys reserve the SVOD, you reserve the streaming rights?

Marcus: The issue really is that they, the network, in order to get paid by Comcast, in the cable industry business, you have to give them rights. And so Comcast wants to offer you, the viewer at home, access to every show any time whenever you want it. So—

Bernstein: So you’ll be a happier customer.

Marcus: FX wants to get the biggest increase they can get in their carriage fee conversations. And one of the ways they get a big increase is they say, ‘You know we used to give you three episodes of every show. Now we’re giving you 100 episodes of every show.’ Right? ‘And you can run them any time and make your customer happy. You can raise the rate on your customer and everyone’s happy.’

Well at some point, it’s bad for FX as well. And it’s really bad for syndication because the minute they’re rerunning that one…anytime anyone wants then why would you watch it when repeats are on at 7 o’clock? In that sense, it’s a big deal. We’re protective of that in a fairly big way and limit their ability to do certain things.

On your sitcoms?

Marcus: On anything we might sell to them. It’s a very tough relationship because Comcast wants everything.

Bernstein: They don’t care about the value of the show. They care about the value they’re supplying to their customers. So that’s their thing. FX really cares about not so much the value of the show versus the network. So therefore, they’re balancing the value of the network against what the MSO wants. We only care about the value of the show, but yet we have to have it on a network in order for it to create the value. We have to give them enough so that they can exploit the rights but not so much that we get hurt.

So this is the—or one of the—top things on your minds?

Bernstein: It’s a big issue.

Marcus: It’s an issue for any studio that’s making a show for any network.

So is the biggest greater industry issue you’re concerned about now streaming?

Marcus: To me, the biggest thing is making sure that advertisers know that they will have success buying local spots. As long as it’s good to sell a car on a local station, that’s really important. There’s lots of places that are supplemental. The Internet is supplemental. There’s no better way to sell a 30-second visual commercial than TV.

Bernstein: Running a million ads every day, saying ‘This Saturday!’

Marcus: The minute there’s a better place to do that, that’s bad news. There isn’t one right now. It’s still not. The Internet isn’t better. If you go to and you click the car, that’s great. But there are very few people doing that. You need a lot of people to see your car. Right now, TV is really good for that. It probably will be for a while. That would affect this quite a bit.