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entcol/turner/22″/mike1st/jc2nd If Steven Spielberg wanted to make a movie about what his cat had for breakfast, every studio in town would be begging him to accept a massive up-front payment and a share of the first-dollar gross. That’s the movie business. The television business is another matter entirely. DreamWorks SKG’s adventures in TV land have so far been a hair-raising example of how hard it is for a new, untried, unaffiliated company to break into the television production business in the era of deregulation even if that company happens to have the names Spielberg, Katzenberg and Geffen stenciled on the front door. DreamWorks is now almost three years old. Thus far, it has yet to release its first movie, it scored some coups in the music business by signing George Michael and the rock group “eels,” and it has released a handful of CD-ROMs, some critically acclaimed. In television, well, things have been rough. DreamWorks’ sit-com “Champs” went down for the count, cop show “High Incident” was busted after two seasons and “Ink” dried up in a hurry. The disastrous “Arsenio” sit-com starring Arsenio Hall was euthanized after only six episodes. The only DreamWorks survivor is “Spin City,” returning this fall for its sophomore season on ABC. DreamWorks officials declined to discuss other shows in development; nothing else has yet been picked up by a network. Meanwhile, syndication has been a total bust. DreamWorks tested a game show called “Majority Rules” in Phoenix and New Orleans, but ratings were so poor that the studio never even tried to sell the show nationwide. DreamWorks’ really big syndication project was supposed to be a news magazine show starring former CBS News co-anchor Connie Chung and her tabloid TV host husband Maury Povich. DreamWorks reportedly managed to sell the show in about 25 mid-sized television markets, but failed to crack such critical markets as New York, Los Angeles and Chicago. Last month, Povich signed a contract to return to his syndicated talk show, permanently shelving the DreamWorks project. Two weeks later, Ken Solomon, co-head of DreamWorks Television, left to become head of Unversal Studios Inc.’s TV production division. So why is DreamWorks, a company with perhaps the most impeccable pedigree in the entertainment business based on the reputations of its three founders, having such trouble with television? Syndication executives and industry analysts point out that DreamWorks may be a victim of its own timing. Had the studio been launched five years earlier, well before passage of the Telecommunications Act of 1996 and repeal of the financial interest and syndication (“fin-syn”) rules, the story might have been different. The Telecommunications Act led to massive consolidation in the television industry, creating a relatively few giant station groups. The result is that companies trying to launch new shows in “first-run” syndication (meaning shows that haven’t already appeared on a network) have to crack those station groups if they expect to succeed and many of these groups already have alliances to certain production companies, networks or studios. “If you don’t (have an alliance with a station group), you’ve got to sell a new show based on the sheer magnificence of your idea,” said George Back, president of All American Television Distribution. “If the idea (for ‘Povich & Chung’) were perceived as so wonderful, my guess is that they would have been able to sell it.” First-run syndication is an important business for DreamWorks to crack because it is much more profitable to own and sell your shows to individual stations and station groups than it is to sell programming to networks, analysts agree although ownership of hit shows running on a network usually reverts to the producer after five years, and the program can then be syndicated for a bundle. Complicating matters for DreamWorks and other independent TV producers is the repeal of the fin-syn rules, which prohibited networks from owning their shows. It is becoming increasingly hard to sell a show to a network without selling partial ownership as well, meaning the network takes a big bite out of any future syndication revenues. DreamWorks is known to be adamant about full ownership of its productions, which means networks aren’t too anxious to pick up its shows. That uncooperative attitude probably doesn’t help the studio’s first-run syndication efforts, either; the networks, after all, own some of the most powerful station groups in the country. Some observers mention that DreamWorks’ founders Spielberg, Jeffrey Katzenberg and David Geffen made their names in movies and music, not television, which may be part of DreamWorks’ problem. Others point out, though, that DreamWorks has hired capable television executives, and the movie and TV businesses are fairly interconnected. “I don’t see that there’s a huge difference between movie and television production, so the experience (the DreamWorks founders) have definitely applies here,” said analyst Derek Baine with Paul Kagan Associates. Baine says it’s far too early to write DreamWorks’ epitaph, after only two unsuccessful seasons. “TV production is often a crap-shoot nowadays,” he said. “A lot of companies have series that crash and burn out of the chute.” Others acknowledge that DreamWorks isn’t impressing anybody in the TV business so far, but urge patience. “DreamWorks can’t be a full-blown studio overnight,” said research director Art Rockwell with Yaeger Capital Markets. “Maybe TV syndication is just not the way for them to get started.”

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