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News Corp.'s EnviableDoh!-lemma Over 'The Simpsons'

The Simpsons is presenting a problem any media conglomerate would love to have.

The show, which has been a hit on the Fox network since it debuted in 1989, has been syndicated to TV stations since 1994. Stations agreed to license The Simpsons in cash-only deals until it went out of first-run production. In exchange, TV stations got to air the show exclusively. That means Fox parent News Corp. has not been able to raise the show’s license fees or sell it to cable or SVOD providers since the original deal was struck.

But with today’s red-hot off-network market, questions are again being raised as to whether the time has come to retire the show from the network and send it out into broad syndication. Analysts agree that it’s a huge property that News Corp. has been unable to fully monetize—and when it does, cash registers at Fox will ring long and loud.

“I think it could do $1 billion if it’s exploited properly,” says Erik Brannon, media analyst at IHS Inc.

David Bank, managing director of equity research at RBC Capital Markets, agrees, calling The Simpsons a “hidden asset that could rake in anywhere from $1.5 to $2 million [per episode] in traditional syndication, and a couple hundred thousand or more from SVOD services.”

That presents News Corp. with a dilemma: Should it retire the show after it concludes its 25th season, and finally cash the rest of the way out? Or should it keep the show on the network?

Homer Away This Season?

The series’ current syndication model made sense when the show debuted—with nobody anticipating The Simpsons had 25 seasons in it—but it’s now an albatross around News Corp.’s neck.

“This situation has been frustrating them for years and years,” says Chuck Larsen, president of TV distribution consulting firm October Moon Television.

Ending the show after its historic 25th season was much-discussed after Fox announced in October 2011 that The Simpsons was renewed for two more years, taking it through the end of the 2013-14 TV season. When reached for comment for this story, Twentieth Television, Twentieth Century Fox Television and Fox all declined.

At this point, however, the question is whether it makes sense to let The Simpsons carry on. Fox is struggling more in primetime as the network’s tentpole, American Idol, keeps hitting series lows. The Simpsons, meanwhile, and Fox’s Sunday-night animation block are still going strong.

On Sunday nights at 8 p.m., the anchor slot the show has held since 1994, The Simpsons is the top-rated program among teens, men, women and adults 18-34 and men 18-49. It’s the second-highest-rated show in the half-hour among young women 18-34. It’s also the third-highest-rated show in primetime among men 18- 34 and male teens. “The Fox broadcasting network and its needs are probably News Corp.’s major concern,” says Larsen. “If it’s a show they feel they still need on the network, they’ll keep it there.”

That said, current market conditions indicate that the time may be right to take The Simpsons into the cable and SVOD markets. “It’s a perishable item,” says Larsen. “You could certainly argue that if you don’t do these deals now, you won’t be able to get the same amount of money later.”

The market for off-network TV shows is as lucrative as it’s ever been, with cable networks such as USA, TBS, FX, Comedy Central and Cartoon Network competing fiercely for hot properties and paying top dollar for them. And News Corp.-owned FX just launched a spin-off network, FXX, that is focused both on adults 18-34 and alternative comedy—with shows such as It’s Always Sunny in Philadelphia, The League and Legit—that would be a perfect place for The Simpsons to land.

Meanwhile, subscription video-on-demand (SVOD) services such as Netflix, Amazon Prime and Hulu Plus also are bidding on shows now, and that is driving prices up. One analyst noted that cable networks are getting worried enough about the SVOD providers that they are starting to pay to keep shows out of those services’ hands.

The Simpsons has a staggering number of episodes available, having just passed its 500th. By the end of season 25, The Simpsons will have at least 559 episodes under its belt. It’s likely that once the show does head to cable, it will be split up among buyers, either by season or by cherry-picking certain episodes from certain seasons.

Adds Larsen, “The careful layering of rights and the sharing of episodes will be critical to The Simpsons’ future success, but if handled properly, it can set a record that will be hard to match.”

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