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Networks Plan Counter-Strike

The specter of a looming strike next year is playing a role in an uptick in the development of inexpensive programming formats, from telenovelas to game shows to reality programs. That's the opinion of several high- level industry executives. “During a strike, they could put on the soaps at 8, reality at 9 and something else like news at 10,” says a top production executive.

Understandably, labor issues are on the minds of many, with the TV and movie pact between the Writers Guild of America (WGA), networks and studios set to expire in November 2007, followed by the Directors Guild of America and Screen Actors Guild (SAG) agreements in summer 2008.

Suddenly, the less expensive programming alternatives are looking very attractive. If the telenovela format, which networks and syndicators are showing increased interest in, works this summer, executives say the networks could use the new programming model along with reality shows—ironically, a primary target group of WGA organizers—as cheap prime time alternatives if writers stop turning out scripts.

That would be a departure from the last major industry work stoppage, in 1988, when the reality genre hardly existed. Back then, the networks were forced to pay huge license fees—now approaching an average of $2 million per episode for a one-hour drama—to order extra episodes of scripted shows. This time, the cost-conscious conglomerates running the networks would likely do that for only a handful of the strongest performers, like CSI and Grey's Anatomy.

Such a novel strategy could be a powerful bargaining ploy against an increasingly vitriolic WGA, West and SAG, both of which have stepped up their rhetoric since the election of more-militant leaders last September. Among other things, they've been calling for union members to get a piece of product-placement coin; pushing for disclosure disclaimers on shows to address “ethical” concerns about “subliminal” advertising; and, most important, demanding revised residual structures that give them a bigger financial stake in new-technology platforms.

Following his election, WGA, West President Patric M. Verrone declared, “This is one of the few times in Hollywood history that the leadership of a creative union has entered office with such a decisive mandate.”

He pledged to “organize and empower our existing membership” to “cover as many working writers in this industry as possible, regardless of the title given them by their employers. And we plan to work side by side with our fellow guilds so that the creative wing of this industry can have an increasingly powerful voice in this ever evolving business.”

Verrone kept his promise, marching arm in arm with actors on multiple occasions. SAG President Alan Rosenberg, active in the 1960s anti-war movement and Black Panther Party, came into office for a two-year term with nearly 40% of the vote to defeat Morgan Fairchild and Robert Conrad. Rosenberg, who's married to Marg Helgenberger of CSI, vowed to “fight like hell to get actors their fair share” by securing a higher share of residuals for work that appears on DVDs, where SAG and other unions have so far failed to make much headway with Hollywood.

But amid all the talk about mandates, protest marches, news conferences and union raids on industry seminars, the networks and studios have followed the code of silence, letting the unions' claims go unanswered. Although they have remained quiet publicly, putting the kibosh on all interview requests related to a potential strike, negotiations on the new WGA contract are expected to begin in spring 2007, if not sooner.

In the meantime, they will keep a close eye on SAG's negotiations for a new commercial contract, which runs out this year, and the outcome of discussions over a new live-action and animation basic-cable agreement, which expires at the end of this month after some extensions. Given the hard-line stance the unions have taken so far, observers throughout the industry say the networks will undoubtedly take a close look at programming contingency plans should a lockout occur.

Back to reality

Reality is expected to be key to that strategy over the next few years. Having begun the 2005-06 season with the perception that the genre had seen better days, reality has gone on to enjoy a strong year—which makes it a viable candidate to play a significant role in the event of a prolonged strike. Fox's American Idol is achieving record-breaking ratings, pounding NBC's Winter Olympics and everything else into submission, and Fox has also gained traction with So You Think You Can Dance?

Meanwhile, ABC has scored big with Dancing With the Stars, which has finally made the network a force on Thursdays and Fridays, while The Bachelor—once presumed to be dying—has rebounded well this year. Through Feb. 12, it gained 5% to 3.9 in adults 18-49 and 21% to 4.0 in the 18-34 age bracket. ABC could also lean on Extreme Makeover: Home Edition, proven utility player America's Funniest Home Videos, and Wife Swap (winning in the 18-49 demo at 8 p.m. ET Mondays).

At NBC, The Biggest Loser has added some much needed Nielsen heft, and the network is hoping for more ratings gold after the Olympics with heavily promoted game show Deal or No Deal. And while NBC has removed Fear Factor, crushed by Idol at 8 p.m. Tuesdays, from the schedule until summer, no one is counting it out entirely.

CBS is still riding the wave with Survivor and Amazing Race, both of which have slipped a bit this season but remain powerful forces. The network would also have the option of turning Big Brother, a formidable summer staple since its premiere in 2000, into a regular-season strike-filler.

Arthur Smith, whose A. Smith & Co. produces Fox's Skating With Celebrities and Hell's Kitchen, among several other programs, says the networks will be looking for “the least interruption as possible” if there is a strike. He suspects they'll focus on quick fixes, like shows already sitting on the shelves and reality. He says, “It's a temporary fix just to hold onto a rating.”