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Ovitz banks on network success

At last spring's network upfront presentations in New York City, one Hollywood studio made quite a splash.

Sure, Twentieth Century FOX Television sold the most shows to the major broadcast networks for the second year in a row. But it was newcomer Artists Television Group that landed new shows on every network and outranked such veterans as Touchstone and Columbia TriStar when the final tallies were in.

This fall, ATG has four shows on four different networks: Madigan Men at ABC, Grosse Pointe at The WB, The $treet at FOX and Cursed at NBC. And projects with Ellen DeGeneres, Michael Crichton and producers Barry Levinson and Tom Fontana are in the works. Add in midseason orders, and a total of seven series from ATG landed on network schedules for the 2000-2001 season, all from a studio that had opened its doors only 10 months earlier.

But ATG isn't just any startup. It's the work of superagent Michael Ovitz. The former Walt Disney Co. president and co-founder of talent firm Creative Artists Agency decided he wanted his own TV studio and in typical Ovitz fashion, started with a bang. Ovitz handpicked his top executives from other Hollywood studios, signed top stars and producers and even bankrolled most of the production with his own money.

"We made a decision early on that if we were going to do something, let's do it in a big way," says ATG President and CEO Eric Tannenbaum, who left his post as head of Columbia TriStar Television to run ATG. "Rather than just trying to do just one show at a time and do it quietly, we decided to try and make a big impact right out of the gate, and that's what has happened."

Ovitz, who left Disney in 1998 with a reported $150 million buyout package, quickly spent millions developing comedies and dramas and initially landed 12 pilots at six networks. ATG, which constitutes one-third of Ovitz's growing Hollywood empire-which includes Artists Management Group and film company Artists Production Group-spared no expense.

More than $50 million went into deals with Darren Star (Grosse Pointe), Steven Weber, DeGeneres and others. And with four series this fall, Ovitz is spending close to $1 million of his own money on each episode. Industry executives estimate that he could spend close to $100 million by year's end, with the mid-season shows factored in.

ATG does have a distribution pact with Columbia TriStar Television, which is kicking in close to $400,000 per episode on ATG comedies and upwards of $425,000 on dramas. (Columbia TriStar will receive 15% to 20% of the syndication revenue on all ATG shows-that's if and when any of the new studio's shows last three to four years on a network.)

But even with the Sony money, rival studio and network executives say Ovitz is still spending "ungodly" amounts. Average network sitcoms cost roughly $1.5 million per episode and dramas another $300,000, according to industry executives. And FOX drama The $treet, alone, is said to be $5 million to $8 million overbudget.

"Most shows fail to make it past one season, let alone get to 100 episodes," says one top studio head. "I really believe that if one of their shows doesn't break out this season, they could be in a lot of trouble. He [Ovitz] is going to have to take on some financial partners to make this last, if they don't have a Seinfeld real soon."

Tannenbaum says ATG is currently in discussions with potential financial partners. "But we are prepared to go on without any as well," he says. "We'd like to find someone who can take some of the pressure off, but it can't just be anyone. It has to be the right partner."

NBC and AT & T have been rumored to be interested.

But don't look for ATG shows to be cutting corners just to save money this season. Kim Haswell, ATG's executive vice president of creative affairs, says it's pretty obvious the studio is going all out to make a good first impression. "Certainly our numbers on The $treet are well documented," she says laughing. "No, we are spending a lot of money on the shows and you can see that on the screen. Certainly The $treet is very expensive because it's in New York, but rightfully so. We're putting a lot of resources into shows that we believe in."

ATG's development division is currently in its busiest stretch in the company's short history, producing shows for this season and putting together ideas and potential shows for fall 2001. Can ATG top its 12 pilots from a year ago at the next upfront period?

"I think we'll probably do fewer this year. It'll be more like seven or eight, not 12," Tannenbaum says. "It's not about any magic number. It's about how much we feel we can do and do well."