Yesterday morning, News Ltd’s Daily Telegraph claimed the Network was axing The Simpsons from its line-up, or at least considering the move to save a reported $6 million a year (the original story is now offline. Below is the Herald Sun version):

That story was an invention, not helped by a not-too strong denial by Ten later in the morning when AAP followed it up. But the story’s momentum continued during the day, generating a lot of posts on websites, blogs and Twitter. Just before 8pm last night posted this story reporting Ten’s more forceful denial.

The entire story was built on a misconception. Someone misread the press release issued by Ten in which it announced the hiring of former CNN and Nine Network journalist, Hugh Riminton, for its Canberra Bureau.

In that report Ten’s News Boss, Jim Carroll referred to the fact that Ten had detailed their news coverage in the last three years, mentioning they had produced an additional 90 minutes of news daily with the addition of the Early News and an extended 11am bulletin.

“The above, is of course, in reference to the last three years when Ten introduced the early news bulletin and the 11am news bulletin was originally half an hour in length until we extended it to an hour,” the spokesperson said in the story.

“Insiders had confirmed the financially troubled network could no longer pay the fee of $25,000 for each episode of the top-rating social satire. Ten was claimed to have said that dropping The Simpsons would save it $6 million a year,” the Tele reported.

Off the story went into fantasyland, with little understanding of the way TV costing is worked out.

Yes, each original episode of The Simpsons costs $25,000 or whatever the sum is. That equates to a series cost based on 22 episodes of about $550,000. You only pay the higher sum for the first run episode. A proportion of that cost is amortised against the revenue written for the first showing. Then a further amount is amortised against subsequent showings or repeats.

It’s not that Ten can’t afford The Simpsons. It can and they make a nice profit thanks, or at worst cover the network’s on air costs. If Ten couldn’t afford the Simpsons then it shouldn’t be in business. The Telegraph didn’t stop to think that Ten paid for The Simpsons while it spent years in receivership and administration and while it lost money.

Most contracts allow for one first run showing and then a specified number of repeats, some have unlimited repeats. Some series have little appeal past the first couple of showings, some none after the first because they are duds. The rare ones have long appeal (MASH, The Simpsons, Seinfeld, Everybody Loves Raymond, Two And A Half Men).

By the time each episode gets round to the third or fourth or fifth showing (or the 20th, in the case of MASH), there is no cost at all to Ten, Nine or Seven: the revenue written against that program can not only cover the network’s on air costs for the timeslot, but generate a very sold profit — proportionately higher than some high profile first run series.

What the original story didn’t note is that at the moment Ten is showing one first run episode of The Simpsons on Wednesday nights, repeats at 6pm Monday to Friday and doubled repeats from 7.30pm to 8.30pm on Friday nights. The cost would be whatever the fresh episode costs, plus the amortised cost of putting the seven other repeat episodes to air. Ten, like other networks, monitor which episodes are being repeated to make sure it can maximise revenues.

The other point the Tele failed to realise is that the 6pm repeats of The Simpsons rates very well, and would outrate an extra half hour of news. The repeats last week averaged 829,0000 and Friday’s averaged 833,000.

If Ten’s News ran for an extra half hour from 6pm to 6.30pm the revenue/ratings ratio wouldn’t be as solid as what Ten could get for The Simpsons simply because the News would be up against the higher rating Nine and Seven News from 6pm. Even if Ten put a lot of sport (a sort of reworked version of Sports Tonight) at 6pm to 6.30pm, it wouldn’t rate as well as The Simpsons does simply because viewers don’t watch sports news in the same numbers as they do general news. Ten’s ratings for Sports Tonight on Saturdays falls after the News At Five.

But that’s not to say Ten hasn’t looked at the idea of extending the news to 6.30pm, especially if Nine starts the 4.30pm to 5.30pm news program from June, as it has said it will. Ten has even gone as far as doing some piloting, but the revenue/reward payoff would mean a loss of revenue. There would be a cost to the news of the extra half hour. At present the 6pm repeat of The Simpsons might cost (for arguments sake) $50,000 a week at five nights times $10,000 per episode. Even if it costs more, it makes the revenue/profit ration look problematic for more news.

The extra half hour of news might cost $10,000 or more to produce per night, which means there’s no real advantage. The revenue gains though would fall over time because the extra half hour of news would rate less and therefore advertisers would tell Ten they were paying less. In the present climate that is happening every week at the networks.

The reaction yesterday proved a point to Ten management: flicking The Simpsons would offend Ten’s target audience, the 16 to 39 age group, and parts of the 18 to 49 group. In these days of falling revenues and scarce profits, it’s a one way trip to commercial suicide to do that too many times.

And finally, an executive at a rival TV network told Crikey that if The Simpsons were freed up by Ten, the series would be bid for so heavily that the cost per episode could rise to $125,000. Foxtel, Nine and Seven would all have a go.

The Simpsons is owned by Fox, which is part of News Corp, which owns The Daily Telegraph. Was there some unscripted mischief at work here as well, or just some quick, imaginative thinking that veered off on the wrong track? Or was it all a cunning ploy by Ten executives to kill off the internal push for an extra 30 minutes of news from 6pm?

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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