In an era of diminishing backend amidst the proliferation of streaming, Fox Entertainment, a rare company built solely around a linear broadcast network, is looking to use the advantages of the traditional broadcast model to attract high-level talent without an affiliated studio.
“I really want to share what we think will prove to be a greater and greater competitive advantage for Fox,” Fox Entertainment CEO Charlie Collier said Wednesday during the network’s executive session. “At a time when the industry’s-undergoing significant change — and you’ve written about all these cost-plus and front-loaded mega-deals (which are great for the few who can get them), we at Fox Entertainment still believe in creating and sharing-with-our-talent the holy grail of television — the backend.”
Netflix’s cost-plus model bypasses backend as the platform takes on all worldwide rights exclusively. It involves the streaming platform effectively “buying out” series auspices’ backend at the outset, in exchange for paying a full license fee plus a premium (typically in the 125%-130% range).
Many of the recent string of mega-deals Collier is referring to do include the studios effectively buying out/advancing against a creator’s backend on their existing series for the studio.
And, as Deadline recently reported, Amazon Studios has been employing a “per-point” model, which Disney TV Studios, FX Producutions and Warner Bros TV also have been eyeing. Each point of an upcoming series’ backend is assigned a numerical value that is uniform across the portfolio of shows. The payments to creators/producers start right away, and the value goes up the longer a series runs.
With both cost-plus and per-point models, they are expected to benefit middling/mildly successful series that go on for a couple of seasons to respectable/modest ratings but would cap the financial windfall for profit participants on blockbuster hits like The Big Bang Theory or Modern Family way below what they would get under the traditional model.
That is what Fox executives are honing in on. In announcing Fox Entertainment’s first direct overall deal with Criminal Minds and Teen Wolf creator Jeff Davis today, Fox Entertainment president Michael Thorn noted, “As the company’s first direct overall deal, it has even greater significance because it underscores our commitment to being in business with the industry’s best creators – and offering them flexibility and backend, both rare commodities in today’s marketplace.”
In his remarks, Collier elaborated what that flexibility would entail.
“Our structure gives us the freedom and the flexibility to not only offer-creators access to a broadcast network — one with relatively few layers– but rather than lock talent down, at Fox Entertainment we’ll also take out the right project to other platforms when and where it makes the most sense for our creative partners,” he said.