USA, Universal in 9-Figure Film Deal

USA Network inked a nine-figure deal for the basic cable and broadcast premiere rights to two dozen of Universal Pictures' films, including Will Ferrell-led Land of the Lost and Borat sequel Bruno.

The deal, which covers mostly pre-buys of theatricals to be released throughout 2009, could be worth north of $200 million, depending on how the titles perform at the box office. If the slate were to underperform in theaters, the package would cost USA about half that.

Cable deals for theatricals are generally paid on a 10%-13% sliding scale of box office returns, depending on performance. This deal is constructed that way, sources say.

USA was among several basic cable network bidders and won the deal with the highest offer to its fellow NBC Universal-owned company Universal Pictures, according to executives. The network's sibling cable outlets such as Bravo, Oxygen and Sci Fi are expected to have restricted access to the group; however, details of those terms are still being worked out.

While virtually every sector of the TV business is facing price cuts, the deal for this slate of films was not discounted, according to multiple sources. The appeal and consistent performance of theatricals can largely be credited for that.

Despite massive job losses nationwide in January 2009, the U.S. box office tally was the best ever for a January: $1.030 billion, according to Media by Numbers. The returns marked a 19% year-to-year increase over 2008.

What's more, basic cable networks across the board rely heavily on theatricals during the daytime and on weekends, and use them as a platform to lead viewers into original programming, the only genre that tends to outperform theatricals in cable ratings.

“We knew we would have to go in aggressively and pay what it takes to get [the films], and we knew what they wanted to make from it,” says Jane Blaney, executive VP of programming, acquisitions and scheduling for USA.

FX bought the rights to much of Universal's 2008 slate last year in what the studio claimed was a “groundbreaking deal.” That agreement covered 15 films, and was estimated to be worth about $100 million when it was signed.

In addition to Land of the Lost and Bruno, the USA agreement includes State of Play, with Ben Affleck and Russell Crowe; Duplicity, starring Julia Roberts and Clive Owen; Fast & Furious, with Vin Diesel; Public Enemies, with Johnny Depp; Funny People, with Adam Sandler and Seth Rogen; The Wolfman, starring Benicio Del Toro; and already released titles such as Milk and Frost/Nixon. Other movies in the package star Philip Seymour Hoffman, Matt Damon and Jennifer Aniston.

“This is one of the biggest slate deals that you would see, across the board in term of volume,” says Frances Manfredi, executive VP and general sales manager for cable and non-theatrical sales at NBC Universal Television Distribution. “USA put a killer deal on the table, they were very aggressive, and very wisely aggressive. We think this will serve them very well.”

USA will get to air some of the movies starting in 2010, with most heading to the network in 2011, following a premium cable window on HBO.

Timing is key, as network executives are hedging against primetime off-network dramas currently on the schedule, such as NCIS and House, softening by then. The hope is that the network can plug the acquired movies into the time slots that are currently occupied by stacks of the series, if need be.

Consecutive nights of the same film on Friday, Saturday and Sunday (or some other combination) is also a probable scheduling strategy for the acquired films.

“We have this huge success with the acquired series; stacking those will probably do stronger numbers than a repeat of a movie,” Blaney says. “But you could have about 150 episodes of those series, and they may end up airing 40 or 50 times. They start to wear thin.”

USA Network acquired basic cable rights to the following 2009 Universal Pictures titles

“Duplicity” with Julia Roberts and Clive Owen
“Fast & Furious” with Vin Diesel
“State of Play” with Russell Crowe and Ben Affleck
“Bruno” with Sacha Baron Cohen
“Land of the Lost” with Will Ferrell
“Public Enemies” with Johnny Depp
“Funny People” with Adam Sandler and Seth Rogen
“Couples Retreat” with Vince Vaughn and Jon Favreau
“The Wolfman” with Benicio Del Toro and Anthony Hopkins
“Green Zone” (working title) with Matt Damon and Greg Kinnear
An upcoming untitled Nancy Meyers film with Meryl Streep, Steve Martin and Alec Baldwin
“Atonement” with Keira Knightley and James McAvoy
“Away We Go” with John Krasinski and Maggie Gyllenhaal
“The Boat That Rocked” with Philip Seymour Hoffman and Emma Thompson
“Cirque du Freak” with Salma Hayek and Jane Krakowski
Sam Raimi’s “Drag Me to Hell”
“Flash of Genius” with Greg Kinnear
“Frost/Nixon” with Frank Langella and Michael Sheen
“The Limits of Control” with Bill Murray and John Hurt
“Milk” with Sean Penn and Josh Brolin
Ethan and Joel Cohen’s “A Serious Man”
 “Taking Woodstock” with Emile Hirsch and Liev Schreiber
“Traveling” with Jennifer Aniston and Aaron Eckhart
“9” with Elijah Wood and John C. Reilly