EXECUTIVE SESSION WITH MORT MARCUS & IRA BERNSTEIN

Debmar-Mercury: Stations Still ‘Need Shows Like Ours’

Mort Marcus and Ira Bernstein, co-presidents of syndication company Lionsgate's Debmar-Mercury, say that even as syndicated options recede and station groups ramp up their own programming, there’s still a business ahead for syndies.

There’s a chicken-and-egg conundrum afoot binding stations and syndicators into equal knots of frustration. Station groups bemoan a thin syndie pipeline, proactively spinning up their own offerings to fill the holes. Independent syndicators face groups clutching their purse strings more tightly than ever, tempering their own investments in the pipeline.

“The studio side is being a little bit more careful about what they are doing, and the station side in general is a little less aggressive of what they will pay,” says Ira Bernstein, co-president of Lionsgate’s Debmar-Mercury.

“It is finding that balance” that’s such a challenge, says fellow co-president Mort Marcus.

In an interview with TVNewsCheck Editor Michael Depp, Marcus and Bernstein discuss how to keep a syndicated business viable while pursuing that balance. They weigh the impact of streaming on the syndication landscape, the problem of a dearth of off nets and what, if anything, to expect from an in-person NATPE slated for January ’22 in Miami.

An edited transcript.

Nick Cannon is finally on the air after a bit of a rocky start.  How is its audience numbers so far?

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Marcus: It is actually doing well for the stations, but the number itself isn’t very big. That says that our lineup isn’t amazing. The stations that we’re on have been hurt by the pandemic a little bit, so the ratings aren’t as nationally high as we would like them to be. But if you [look] based on lead-in and year-ago numbers, he is doing well. We are encouraged, and creatively people are really liking it. All you can really do is hope that it catches on.

Bernstein: The entire daytime daypart is depressed, quite frankly. A year ago, all kinds of things were happening and that caused traditional daytime ratings [to be] down 30%, 40%. We were hoping that that would pop back up and it hasn’t. Maybe behavior has changed permanently. Maybe we are still working through it because we are not exactly out of COVID, but we are suffering from that on an overall basis. We think Nick is doing a great job. We just obviously would like the whole thing to be a little bit higher.

Wendy Williams has had issues in recent years, and she’s not going to be there at the beginning of her season. How are her audience numbers?

Bernstein: She is in repeat, so it is really hard to say. They are slightly lower because of the overall daytime marketplace — I would say a tenth lower than normal repeats. It is not terrible, but we would like to see that better, too, and fingers crossed for her that she can be back shortly.

Let’s talk about the syndication pipeline for 2022.There is talk of a Jennifer Hudson talk show for Warner Bros. Some of the Fox stations are testing Pictionary from CBS Media Ventures and there is also talk of potential talk shows starring Sean Hayes and Nicey Nash. What are the time periods in key markets and on big station groups that need filling, and are these shows appropriate for the openings that are likely to be available?

Marcus: There are time periods for sure, but the biggest issue is, is there a lineup that can support those shows? We are talking about how Nick is actually not doing badly relative to the stations, but on a national basis that number needs to be higher.

We all know Ellen is going away. She is retiring. All those time periods, some of them are going to be filled by local news, but a lot of those stations have an opening to fill. Even if they readjust, there is still a time period.

There are other shows that may or may not come back. It seems to me that there are time periods to get. We have to do a double check on how we are doing the math at this point and try to make sure there is a robust enough marketplace today to justify launching one of those shows. Not so easy, I would say.

Bernstein: We are at a bit of an inflection point from both sides. [On] the studio side, traditionally it was just about doing more. Now they are really looking at it [as] more isn’t necessarily better.

Then on the station side, they are sitting there dealing with the reality of whatever their numbers are and saying we need to survive, too, and if the numbers are lower, we can’t pay as much. So, some of them are either buying things more efficiently or they are producing their own [content] pretty efficiently because this is about their survival.

Marcus: I want to make a point that even though the ratings are softer in general, the CPMs on a national basis and the cost per points on a local basis are up quite substantially. When you look at it from a revenue standpoint on an ad basis, it may be off a little, but not very much.

The cost of the commercial both locally and nationally has gotten more expensive per the amount of viewers you are reaching. If you talk to a lot of the local stations right now, they would say it is actually fairly robust. On a national basis, even though our ratings are lower, the CPMs are significantly up. I don’t want to sit here and make this all gloom and doom. It is not, really.

Bernstein: And this is the best upfront in terms of a combination of both price increase and sellout levels in the 30 years I have been paying attention to upfronts.

Station groups continue to have concerns that there aren’t enough syndicated shows available to them. Is this mainly due to a lack of sitcoms for early fringe?

Bernstein: Well, no. It is a combination of things. The sitcoms have gone away for a while now. Big Bang was probably the last. After that, it was downhill, and the key access time periods have had to do other things.

When you look across the board, we have benefitted. Family Feud has been a great beneficiary in those time periods, but overall, it is not just about off-net. It is also about first-run. It is the fact that the studio side is being a little bit more careful about what they are doing and the station side in general is a little less aggressive in terms of what they will pay.

Marcus: It is a little chicken and egg. A lot of the station groups are doing some of their own shows that they hope will become national by themselves. When they do those, there is room for a good clearance from a studio like ours. They need shows like ours. We need the time periods.

They are saying they need more shows, but at the same time you can’t blame them for playing a little bit of defense and covering some of the holes themselves because they are trying to be proactive. It is finding that balance.

Other than Fox, the network-owned station groups increasingly rely on their own syndication units for shows. How much of a concern is this for independent syndicators like Warner Bros., Sony and yourselves?

Bernstein: That is not a new story. From time to time, CBS buys Family Feud in a bunch of markets and the other affiliate groups buy things across the board from other people. You are right in terms of overall development. For the most part, CBS is developing for CBS and NBC is taking their own stuff and they are less and less likely to take from somebody else. For us, we have done the majority of our business with Fox.

The major program suppliers are increasingly hanging onto their program libraries for their own streaming services. Does that mean that the flow of network shows into syndication is going to shrink to a trickle?

Marcus: You are talking about library now. Other than the sitcom, the library thing never really mattered in syndication. The sitcom has been the big thing, and the studios would still sell the sitcom into the marketplace if there was [one]. But now they are making 10 episodes; they are not making 26-a-year things. There are no real hits. If you talk to the stations, it is really more about first-run. They know that they need to identify themselves well. They want shows that are original to those stations.

Judge Judy hosted one of the highest rated shows in syndication until she moved to streaming for higher pay. Is that phenomenon only for big stars or do you think others are likely to follow?

Bernstein: She didn’t move for higher pay. She just decided to discontinue her show that CBS was producing with her and then decided she really didn’t want to stop, so she sold a derivative show to a streamer.

The jury is out as to whether that type of show will be successful on that platform. Different platforms behave differently. Look at Netflix: David Letterman’s My Next Guest Needs No Introduction, I thought it was fantastic, [but] it didn’t really work as a big talk show for Netflix in terms of getting them numbers.

Chelsea Handler didn’t really work on Netflix. Maybe that is not the type of programming that consumers of SVOD want. Maybe that will change, but right now that looks to be the case.

How disruptive a force has streaming been for syndication? Syndicators have been competing with Netflix for years, but now Disney+, Peacock and Warner Media and Paramount are in the game. Are they drawing even more of the daytime TV audience away?

Marcus: For sure. There’s more to watch. The viewer has a choice now. They can turn on their cable channel or go to the Roku box. When COVID hit, people’s behavior changed and some of that stuck. We are struggling with that now, dealing with the cord cutting. You almost have 30 million people now getting their local TV from an antenna. For the local stations, the issue is distribution.

How existential a threat does streaming pose to syndication?

Marcus: We are still going to have the same situation: rating points are going to be hard to come by [and] ad dollars are going to be more expensive, so we are going to get offset a little bit. Is that enough for a business? It is still.

Bernstein: What all of these companies need, including us, is a hit. If you can develop that hit, you will figure out how to maximize the value through distribution depending on what your goals are. If your goal is Peacock, maybe you don’t want to put it on the network. You want to make people watch Peacock.

Consolidation among TV station groups is picking up again as Gray TV absorbs the Meredith stations and Tegna is considering bids. How do you compete in a market where the number of potential buyers is shrinking while the size of the potential sale is increasing?

Marcus: We would rather that not happen obviously, but look at Nexstar or Sinclair. They have so many different kinds of stations they can’t buy one show to fit all. It is impossible. What happens is maybe they have 80 markets, they say I will buy it in 25. Even though they are that big, they still have to parcel it out. It becomes a complicated mix in your distribution. It’s like a chess game.

Will Debmar-Mercury be hosting a suite and a cabana at NATPE ’22 in Miami Beach?

Bernstein: I am hopeful that at the very least we will be in our cabanas by the pool. It is end of January, and we are still three months from that. A lot changes every few months. It seems to me we are headed in the right direction. I don’t want to jinx it. I am cautiously optimistic.

What would you be bringing there?

Bernstein: We haven’t announced another new show, which we might. We will be [bringing] Wendy Williams and Family Feud, renewing Nick Cannon, Schitt’s Creek. We are talking about our current lineup of shows and renewing.

[At NATPE,] you are not launching. You are celebrating the fact that you have this new show or a show that you have had for a long time, and you just want to bring people together around it. That is really what those conventions are about. It is more about we haven’t seen each other in a long time, and we would love to get together again and shake hands.


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