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Syndication and NATPE

As the syndication world prepares to converge on Las Vegas for the annual January gathering of the National Association of Television Programming Executives (NATPE), stations are still waiting to hear pitches for new first-run syndicated shows.

What a change from the run-up to the current season, when rookie talk-show host Rachael Ray swept into the NATPE convention trailed by a pack of new talk and court shows cleared months in advance.

Last year notwithstanding, the syndication development process has been slowing for years. And with three of this fall’s four freshman talk shows struggling in the ratings, syndicators and stations are paralyzed with uncertainty about the risks of launching first-run fare.

The hard truth is, the first-run business—which accounts for roughly 40% of the $4 billion syndication industry—is in crisis after a decade of steady decline.

“The syndication development process is almost completely broken and non-functioning,” says Bill Butler, group VP of programming and promotion for Sinclair Broadcast Group.

With the prized time slots occupied by lucrative stalwarts like The Oprah Winfrey Show and Wheel of Fortune, syndicators are left with less valuable daytime and late-night hours, low or no license fees, and little inclination to fill the hours with costly talk and magazine shows. Stations, meanwhile, claim that the networks’ syndication arms are ignoring their programming needs in favor of their corporate-sibling station groups.

The fact that stations won’t hear their first pitches for at least another week or two is an indication of how bad things have grown in recent years.

“I think the development seasons get slower each year,” says John Nogawski, president/COO of the CBS Television Distribution Group, the largest syndicator, which comprises King World and CBS Paramount’s domestic TV operations.

The foot-dragging stems in part from the scarcity of programming holes at stations in second-tier and smaller markets. But Sinclair’s Butler, whose station group has 58 stations in 36 markets, blames the vertically integrated syndicators at large media companies for focusing too much on the programming needs of their station groups.

“With the process that Hollywood studios go through for development, there is no connection to station needs or requirements. They are speaking in German and we are speaking in Italian.

“They’re not the least bit interested in listening to what our stations’ wants, needs and desires are,” he complains. “They respond more to the agent community than to the buyers.”

And what stations want is fewer double-runs of B- and C-level sitcoms and more original programming, particularly younger-skewing shows for Fox affiliates that have been without afternoon kids programming for five years. They also want new first-run sitcoms, like the 2008 entrant Tyler Perry’s House of Payne, to replace the dwindling supply of A-list off-network comedies.

For their part, syndicators express frustration with stations for failing to invest dollars and faith in their programming. Studios have long viewed stations as largely insulated from the turmoil of the industry, thanks to their sizable share of local-advertising revenue. And they complain that publicly traded broadcasters have been reluctant to sacrifice profit margins to invest in the production and marketing of top-flight programming.

They cite stations’ practice of relegating freshmen series to lower-viewed daytime and late-night time periods, where broadcasters make less than 20% of their overall revenues and have little incentive to put promotional dollars. And like producers on the network side, syndicators bristle at the impatience that leads stations to quickly downgrade underperforming shows.

“Six shows were launched this year, and stations gave them little time to make or break,” says Nogawski.

But with stations and syndicators at loggerheads, there are signs that the impasse may finally give way to rethinking old habits and forging new partnerships.

Some syndicators are looking to collaborate more with stations, to the point of establishing partnerships with groups in hopes of drawing higher license fees to funnel into production and marketing.

But the best hope for progress may be that the media conglomerates are reconsidering the wisdom of using their syndication arms to supply their station groups. With the high failure rate among rookie programs in syndication, companies face not only a $5 million- $10 million hit on each new show that fails but also diminished broadcast revenues from their stations.

NBC Universal’s syndication unit has found little success in supplying first-run shows to NBC stations (although it has had no trouble with Law & Order: Criminal Intent reruns). Meanwhile, NBCU’s station group is developing and producing a program based on the company’s female-targeted Website, iVillage, on its own.

Some in the industry hope media giants will begin distributing their shows beyond their own stations, potentially opening up holes next season on the schedules of top-market stations and creating more demand for new programming.

Meanwhile, as studios and stations grapple with potential solutions, smaller syndicators like MGM, Debmar-Mercury (see story, p. 9), Program Partners (selling Canadian shows) and Litton (with Baywatch reruns) have stepped in to fill the programming void.

Litton President/CEO Dave Morgan hopes shows like Baywatch, cleared in 19 of the top 20 markets in a variety of time periods, will provide a decent alternative to traditional first-run Monday-Friday strip offerings.

“We’re at a point and an era where everybody is rubbed raw from sameness,” he says. “We just hope we find ways to be smarter about it.”