Hollywood is wondering if Don Draper and the rest of
the “Mad Men” gang have drunk and smoked their way through cable channel
AMC’s programming budget.
Over the last two weeks, AMC has pushed to make cuts
on two of its other big shows — “The Walking Dead” and “Breaking Bad” —
moves that came as a surprise to the creative forces behind those
popular series.
The push to rein in costs comes only months after
“Mad Men” creator and executive producer Matt Weiner received a huge new
contract to continue the show about swinging 1960s ad men for at least
two more seasons. His price tag of close to $10 million a season has
those who work on rival shows grumbling that they are being asked to
foot the bill for Draper’s martinis.
Sony Television, the studio behind “Breaking Bad,”
was so irked at the terms AMC offered for a fifth season of the show,
which included making only six or eight episodes instead of the usual
13, that last week it approached other cable networks, including FX,
about buying the program. Cooler heads have since prevailed and AMC and
Sony are trying to hammer out a new deal.
In the case of the zombie smash “The Walking Dead,”
AMC will be slashing about $250,000 per episode for its second season.
Frank Darabont, the well-regarded executive producer of “The Walking
Dead,” was also replaced last week, just days after he appeared at the
Comic-Con convention to greet the show’s fan base and promote coming
episodes.
AMC declined to comment on speculation that Darabont
was forced out in part over a disagreement about the show’s new budget.
Darabont did not return a call seeking comment.
The cable network, a unit of AMC Networks Inc., is
also slowing down on producing new shows. Earlier this year, it held a
much ballyhooed bake-off at Santa Monica’s Shutters hotel at which
producers came and pitched new projects. After narrowing the list of
potential shows to three, the network ultimately decided not to move
forward with any of the pitches.
AMC President Charlie Collier strongly denied that
the cost of keeping “Mad Men” is in any way hampering the network’s
programming strategy.
“We’re investing more than we ever have before,”
Collier said in an interview. “The fact that future seasons of ‘Mad Men’
were going to be expensive is not a surprise to us.” He was also quick
to defend the network against complaints about its recent dealings with
producers. “We’ve taken some of the most expensive, riskiest shows
around and nurtured them and managed to grow our network.”
Collier declined to talk specifics about “Breaking
Bad” and “The Walking Dead.” With regards to the latter, he said, “The
viewer will see we’re making shows that will look like a movie every
week.”
Until recently, AMC was a unit of New York cable
operator Cablevision Systems Corp. In July, it along with sister cable
channels Sundance, IFC and WE were spun off into AMC Networks Inc., a
stand-alone public company. That will mean greater scrutiny of its
spending by Wall Street.
“As a public company, the financials of AMC are
gradually going to become much more apparent to investors,” said
Barclays Capital analyst Anthony DiClemente. “There will be many more
questions about programming expenses and margins.”
Prior to the debut of “Mad Men” in 2007, AMC was
known primarily as a network of old movies. Realizing that it needed to
offer original programming if it wanted to compete with bigger channels
such as Comcast’s USA, Time Warner’s TNT and News Corp.’s FX, the
network started investing more in fresh content. According to research
firm SNL Kagan, AMC’s annual programming budget jumped over 40% from
$123.3 million in 2006, the year before “Mad Men” launched, to a
projected $174.5 million in 2011.
The investments have paid off in terms of critical
acclaim. Both “Mad Men” and “Breaking Bad” have shelves full of Emmys.
Neither, however, are big commercial hits. “Mad Men” averaged 4.3
million viewers in its fourth season, and so far this season “Breaking
Bad” is averaging 2.3 million. By comparison, “The Walking Dead”
averaged over 6 million viewers and TNT’s “The Closer” routinely gets
over 7 million.
Although AMC has grown its ad revenue with original
programming, it still trails its bigger rivals in terms of the
subscription fees it collects from cable and satellite operators. AMC
averages 25 cents per-subscriber per-month, according to Kagan SNL. TNT
gets about $1 per subscriber, USA averages close to 70 cents and FX
pulls in 40 cents.
One of the challenges for AMC is that it does not own
most of the shows it airs. That’s why Sony was able to threaten the
network with moving “Breaking Bad” if a deal was not to its liking. AMC
owns “The Walking Dead,” which is why it could enforce such a dramatic
budget cut, though it came with the loss of the show’s creative force.
Collier for one defends AMC’s track record: “Are
there bumps along the road, sure, but the net results have turned out
pretty well.”
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