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Networks hedge their bets with chump insurance

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When ABC’s highly anticipated new drama ‘FlashForward’ (pictured) premieres in September, HBO probably will be scrutinizing its performance just as much as the alphabet network.

That’s because the pay cable channel negotiated a nice stake in the show last spring that pays it from $5,000 to $7,500 for each episode that airs and has roughly a 7% stake in any back-end revenues the show generates.

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‘FlashForward,’ which is executive produced by David Goyer and Brannon Braga and is based on the Robert Sawyer novel, was first pitched at HBO, and when the network decided after buying the script that it wasn’t that hot on the product and the show’s creators wanted to shop it elsewhere, it negotiated for a piece of the show.

The industry uses a Yiddish word that’s probably not appropriate for a family website to describe this practice, so we’ll just call it ‘chump’ insurance. No network executive wants to be the one who let a hit walk out the door, so even if a show isn’t a good fit with the first place it is pitched, it has become commonplace to negotiate a piece of the show just in case it turns out to be gold.

Typically, a network letting go of a product will cut a deal that could give it anywhere from 2.5% to 10% of the back end and as much as $7,500 per episode, the latter of which becomes a line item in the budget. While that may sound excessive, keep in mind that the alternative is letting a project sit on the shelf and languish.

Other shows with similar arrangements include the CW’s ‘Life Unexpected,’ which is made by CBS Productions but was originally pitched at Disney’s ABC, which is now on the show’s payroll. CBS, meanwhile, has been getting a cut of the USA drama ‘In Plain Sight,’ which is produced by NBC Universal. News Corp.’s 20th Century Fox Television had a stake in ‘Everybody Hates Chris,’ which was made by Paramount (now CBS Television Studios) for UPN and later the CW.

Of course, there are limits to these pacts. HBO wanted a production credit on ‘FlashForward,’ but apparently that’s not part of the deal with chump insurance.

-- Joe Flint

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