FX near TV deal for “Avatar”

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News Corp.’s 20th Century Fox is near a deal to sell the commercial TV rights to Jim Cameron’s runaway hit ‘Avatar’ to sister cable network FX, people close to the situation say.

Although negotiations are still being finalized, the price tag on the movie could be north of $25 million over several years. That one News Corp. unit, FX, is buying a movie from a sister unit, 20th Century Fox, is no surprise. FX has gobbled up several movies from 20th over the years much the same way that Time Warner’s TNT ends up buying a lot of movies from its sister company Warner Bros.

The price, though, is very high, even for a movie that has generated over $350 million in domestic box office. Although ‘Avatar’ is a smash, it does not come without challenges for a TV network. For starters, the movie runs well over two hours, which means when commercials are added, it will be a four-hour event. Then there is the 3-D factor and whether the movie will hold the same appeal to viewers in regular TV. Finally, by the time the movie hits commercial TV, it will have been out on DVD, video-on-demand and HBO. It will probably be two years, if not longer, until FX gets its hands on ‘Avatar.’

Movie sale deals are complicated. Basically, the bigger the hit, the bigger the money. However, there are usually caps in place to protect the buyer. A movie that makes $500 million can end up costing a network the same as a movie that makes $100 million. The purchase price is generally 12% of domestic box office with a cap.
In the case of ‘Avatar,’ if the cap was $200 million, the price tag would be $24 million. However, given the cost of the movie and its early success, it appears that 20th Century Fox may have been able to squeeze out a few more million from FX.

An FX spokesman could not be reached for comment.

-- Joe Flint