Sheen Tantrum Likely to Cost in the Millions
By BILL CARTER
Published: February 25, 2011
Charlie Sheen’s latest antics may leave CBS and Warner Brothers with a quarter-billion-dollar headache.
Room For Debate
When Hollywood Says ‘Enough’
What is the tipping point for networks in tolerating bad public behavior from their big stars?
The loss of next season’s episodes would mean forgoing about $250 million in revenue between Warner Brothers, which produces the show, and CBS. The actual shortfall would be much lower because the network would reduce its costs and would receive revenue from another show in its place.
But it would still hurt the bottom line. In halting work on one of television’s most successful programs, network executives were fully aware of the financial implications.
“We knew this was going to cost a ton of money,” one senior executive involved in the decisions said, adding, “tens of millions.”
Based on what the program was expected to take in from syndication sales of future episodes, Warner Brothers could fall short by about $100 million in revenue if the show never tapes another episode. And CBS, which charged about $200,000 for each 30-second commercial, may have to make up close to $160 million — the amount it could have made during the next season.
That kind of money usually leads to compromises in Hollywood, even in the most distasteful of circumstances. In this case, however, several of the parties to the decision — all of whom asked not to be identified because the companies were standing on an official statement released Thursday — said the most likely outcome of the confrontation is an untimely end of the series.
“We won’t know for sure until May,” one of the executives said, referring to the period when networks formally announce their prime-time schedule for the fall. But given the hostility expressed by Mr. Sheen, and Mr. Lorre’s avowed resistance to continue the show without him as the leading star, further episodes seem unlikely, the executive said.
If that proves to be the case, the show will fall about 32 episodes short — eight this season, 24 next — of what had already been committed. Stations and cable outlets that have purchased the reruns would then not have to pay the estimated cost of $3 million an episode.
Those outlets would almost surely have spent the money because “Two and a Half Men” is the top-rated show in syndication. It has also provided an instant ratings increase for FX, the cable channel that bought its repeats (for about $800,000 an episode).
“There’s just no question,” said Brad Adgate, the senior vice president for research at Horizon Media. “If this show is over, these guys are going to feel it, especially given how hard it is to get a hit show.”
On Thursday, Mr. Sheen denigrated Mr. Lorre, the most successful comedy producer currently working in television, as a charlatan whose show became a success only because of Mr. Sheen’s own talents.
He also repeatedly called Mr. Lorre by the name Chaim Levine, which executives from both CBS and Warner Brothers interpreted as a veiled anti-Semitic attack. Mr. Sheen was also criticized on Friday by the Anti-Defamation League for those comments. (The comments probably went back to a mention Mr. Lorre himself once included on the show, where he called himself Chaim Levine. That is his Hebrew name. He was born Charles Levine. Mr. Sheen also goes by another name. He was born Carlos Estevez.)
Jon Swallen, the senior vice president for research at Kantar Media, which measures the economic value of television shows, estimated that CBS took in about $155 million in advertising on the program last year, while Warner Brothers added $268 million in what are known as barter sales in the syndicated repeats of the show. Local television stations acquire the repeats for a small fee, and also hand over a portion of their advertising time to Warner Brothers to sell.
Not having any new episodes might not affect the advertising revenue for Warner in the short term, Mr. Swallen said, but “the ratings could decline if they don’t have new episodes to refresh the repeats.”
Similarly, CBS does not stand to lose all of the $160 million or so it could have made in ad revenue in the lost episodes this year and next. CBS will replace the show with something else and sell ratings points in that show. “That will presumably be at much lower prices,” Mr. Swallen said.
However, CBS pays a costly license fee to Warner Brothers to carry the show, as well as all the production costs on the show, a total of about $4 million an episode. It will not have to pay anywhere near that much on a new entry. So the network may not see much of a hit to its bottom line — at least not right away.
In fact, in a statement CBS said: “This will have no material impact to a company of our size. And at the network level, given the economics of a show like this in its eighth season, any ratings declines will be more than offset by the reduced programming costs for the time period.”
The other value of “Two and a Half Men” is harder to quantify. The show has provided, perhaps more than any other show on television, a boost for shows CBS has placed around it.
Mr. Lorre, who declined to comment, also stands to lose a substantial amount of money from the unproduced episodes of “Two and a Half Men” because of his share in syndication profits.
But so does someone else who owns a percentage of the sales of each episode: Charlie Sheen.
