'AMC Network In No-Win Situation'

Lawrence Meyers of Big Hollywood has an interesting look at how Mad Men’s success has been a financial mixed blessing to cable channel AMC. It has negatively impacted other shows on the network, whose transition from a channel primarily running old movies (in other words, relatively cheap to program) towards a network with numerous independent productions (much more expensive) has been fraught with difficulty:

There’s good news and bad news about the content that AMC has created.  The good news is that the content has been outstanding.  Mad Men, Breaking Bad, The Killing, Rubicon are all terrific, unique shows.  The executives who have developed these programs along with their creators deserve kudos for their strong storytelling sensibilities.  The bad news is that the network is a victim of its own success because while it has been able to extract good affiliate fees (what cable/satellite provider doesn’t want to provide Mad Men?), Hollywood talent and their agents will always try to maximize their cut of the pie by holding producers hostage.

Now, there’s no doubt that Mad Men creator and showrunner Matthew Weiner is one hell of a talent, has a vision for the show, and has executed it with aplomb.  And, if the show were on HBO or a major network, Mr. Weiner’s agents would be able to reach into some mighty deep pockets.  Indeed, given that Mr. Weiner was a senior producer on The Sopranos, he likely wanted the mega-zillions that creator David Chase was repeatedly awarded.   But AMC is a basic cable network whose pockets are not that deep. Nevertheless, Mr. Weiner’s agents negotiated an outstanding $30 million deal for him, as they should.

The problem with this approach is that, as Sons of Anarchy creator Kurt Sutter tweeted, “…it was bad business…[Mad Men] held AMC hostage, broke their bank, budgets were slashed, shit rolled downhill to Gilligan and [Darabont]“.   The problem with the Mad Men deal is that Mr. Weiner’s deal would have been a blip on the income statement if AMC were still wrapped up inside Cablevision.  Instead, a chunk of that deal will appear as a large expense on AMC’s own income statement, which means it flows directly to the bottom line earnings per share.  So instead of a bug on a melon, it appears as a large slice cut off from a pie.

The result?   Panic.   Understandable panic, but panic nonetheless.   And the press has been hard on AMC Head of Original Programming, Joel Stillerman.  Frankly, I think Mr. Stillerman is in a no-win situation, and was put there by the Dolans and the stupid IPO deal. Panic is also evident in the story reported at by Eric Vespe.

Mr. Stillerman had to offset these huge new Mad Men expenses because the pressure is on him to get that net income number up (especially if he owns shares!).  He did so by adding additional commercials to the show to generate more revenue (also something Mr. Weiner reportedly fought).  He cut the budget of the one show AMC actually owns (it licenses the others), The Walking Dead.  That show, which was already expensive by even network standards at $3.4 million per episode, had to get by on less.  Now, in the hands of a very experienced TV producer, the show could be done for less.  However, Mr. Darabont is primarily a feature film writer/director, so he is used to larger budgets, and his vision for the show is an expensive one.  If Mr. Sutter is to be believed, Mr. Darabont made mistakes and was fired.  He was likely taken out of his comfort zone.   As Mr. Sutter also suggests, will other talent be scared off from AMC because of its recent behavior?

Read the whole thing.